Mortgage & Property Archives - Holborn Assets Cyprus

Buying property in Cyprus: Where and why you should invest

Michael Hiden — Wed, 20 Jul 2022 09:49:56 +0000

Buying property in Cyprus is one of the investment options that expats should think about when moving to the island. Cyprus is one of the most beautiful islands in the Meditteranean Sea that hides many opportunities for people that choose it as a place of residence.

Despite its small size, Cyprus combines the hot Med weather with an excellent set of services in the financial and tourism sector that are among the top in the European Union. Many large companies move to Cyprus, transferring personnel that should rent or buy a home there. Therefore, the demand has increased significantly, especially after the war between Russia and Ukraine started in February 2022.

Things to know about the Cyprus property market

Although Cyprus is one of the smallest countries in Europe, its property market has been blooming for many years now, driven by high demand and low interest rates. Despite the reported increase in prices, the Council for Registration of Real Estate Agents has stated that the Cypriot housing market is not experiencing a bubble at the present time.

According to the Central Bank of Cyprus Q4 2021 property index, residential property prices rose by 1% year-on-year for houses and 6.3% year-on-year for apartments. In total, the market experienced price increases of 2.6% year-on-year, lower than Cyprus’ GDP growth over the same period of time.

The Council for Registration of Real Estate Agents notes that “according to the Central Bank Property Index, prices are still much lower than those of 2007, when they reached their peak, but also compared to 2010 or 2012, if we want to go back a decade. The real estate market has shown strong resilience during the pandemic and in this new period of uncertainty.”

Where should you buy property in Cyprus?

Cyprus has been a divided island since 1974. The southern part of the island belongs to the Republic of Cyprus, whilst the northern part belongs to the so-called Turkish Republic of Northern Cyprus (TRNC), which is not internationally recognised. Therefore, buying property in the northern part may prove to be problematic as negotiations for many issues, including properties between the sides, have been fruitless for almost 50 years.

The Republic of Cyprus is divided into the regions of Nicosia, Limassol, Larnaca and Paphos. Each region has its own perks with 3 of them giving you direct access to some of the most beautiful beaches the Med has to show. There are many affordable homes for most budgets, but we should note that each region has different prices depending on demand and supply.

Property in Nicosia

Nicosia is the capital of the Republic of Cyprus. Unfortunately, it is the last divided capital in Europe since 1974. In the city’s centre, Ledra Street is a pedestrian street lined with restaurants, bars, and cafes that end at a popular Green Line crossing point. Nicosia is home to most government services and many international companies such as Mindgeek, Wargaming, KPMG, Deloitte, EY and others.
Nicosia is an excellent choice who love city life. Apartments, in particular, have seen a surge in interest from both Cypriots and non-native buyers. Many Ukrainian and Russian enterprises have recently expressed an interest in coming to the island, contributing to the influx of highly skilled workers and property buyers.

One bedroom apartment prices in Nicosia start from 125,000 euros in case you want to buy and 550 euros if you want to rent one in the city centre. However, the Nicosia region has many small villages, no more than 15-20 minutes drive, where you can find lower prices and larger detached homes.

Property in Limassol

Limassol is a cosmopolitan city with a superb selection of international schools. With numerous shops, restaurants, bars, and entertainment venues to choose from, you will find everything you need to live a comfortable life. Furthermore, if you want to rent out your property to tenants, you’re lucky; Rentals are currently in short supply in Limassol due to the limited availability and rising demand.

However, living in Limassol is more expensive than in other parts of Cyprus. Buying a one-bedroom apartment starts from 170,000 euros whilst rent for a similar apartment starts from 700 euros, depending on the age and amenities.

Property in Larnaca

Larnaca hosts the island’s largest international airport and is close to many popular locations for expats and tourists. The famous sandy beaches of Ayia Napa and Protaras are just a 30-minute drive from Larnaca, ideal for spontaneous excursions.

The newest addition to Agia Napa’s amenities is the Ayia Napa marina, which according to the relevant website, “it is an international lifestyle destination of choice for visitors seeking luxurious residences, world-class yachting facilities, carefully curated retail and dining options as well as bespoke recreational and entertainment experiences.”

The Larnaca region is home to a well-established expat community. Many foreign nationals like to spend some months during the year here, enjoying the delicious food and amazing beaches. Potential buyers should know that Larnaca still hides many property opportunities whilst being cheaper than Nicosia and Limassol. One-bedroom apartments start from 90,000 euros whilst renting one would cost around 450 euros.

Property in Paphos

Paphos, a city on Cyprus’ southwest coast, is home to the majority of British expatriates. There are numerous cafes and stores to explore in Paphos’ charming Old Town, as well as numerous old ruins. Aphrodite, the goddess of love, is said to have been born near Paphos in Greek mythology, which may explain why so many foreigners fall in love with the region.

Paphos hosts the second international airport in the Republic of Cyprus, with regular flights to almost every UK airport as well as other European destinations. The region of Paphos is home to many exciting attractions such as the Baths of Aphrodite, numerous wineries, and the largest forest in Cyprus and the Acamas peninsula. Thousands of Brits have chosen Paphos to have their permanent residences there.

If you would like to buy a one-bedroom apartment in Paphos prices start from 90,000 euros. If you would like to rent one prices start from 450-500 euros. We should note that the Paphos region is the cheapest when it comes to property prices, but stats have shown that there has been a spike in the last year.

Holbon Assets Cyprus helps expats invest in property

Holborn Assets is a financial services provider founded in Dubai more than 20 years ago. Since then, we have expanded to more than 15 countries and 23 offices around the world. Holborn Assets has established a base in Limassol and Paphos, aiming to serve expats who have chosen Cyprus as their residence.

Investing in property is one of the safest moves you can make if you want to diversify your portfolio. Furthermore, buying property safeguards your family’s financial future as it can be a steady source of income. Buying property equals tax obligations, the need for foreign currency exchange to complete the purchase and other actions you might not know.

Our experienced and fully qualified team of financial advisers in Cyprus is ready to help you by providing sound financial advice regarding taxes, currency transfers and many other services that would help your portfolio grow. Get in touch with us by using the contact form now!

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How to Remortgage as an Expat

user — Tue, 21 May 2019 08:37:49 +0000

Fixed rate, tracker, standard variable – todays mortgage market has more products than ever and finding the right one requires extensive research. Remortgaging is no different, it requires careful consideration.

In a nutshell, remortgaging is where a new mortgage is taken out to either replace your current mortgage or to borrow money that is secured against your property.

As an expat looking to remortgage a UK property there are some things to be aware of.

What are the benefits of remortgaging?

Remortgaging can potentially save you thousands a year. Shopping around for a better deal is something people do with their phone contracts but might not consider when it comes to their mortgage.

Like other lending products, banks usually offer an introductory fixed rate on their mortgages. These are sometimes referred to as headline offers and they can last anywhere from two to five years.

Once the offer has ended your mortgage will usually revert to the lenders standard variable rate. This will more often than not be a higher rate than what you were paying and can increase monthly repayments.

The benefits go beyond savings. Let’s say you have just been offered a job abroad, you might be wondering what happens to your UK property and your current mortgage.

Switching to a buy-to-let mortgage is one option for expats who want to rent out their property while they are overseas for a long period. Remortgaging to a different mortgage type isn’t something to rush into and it’s best to speak to an independent financial advisor before making a decision.

Remortgaging can also give you flexibility. A mortgage that suited your financial situation when you took it out may not be the best fit now. If your salary has increased and you want to up your monthly payments, or even pay off the remainder of the mortgage, you might be restricted.

Some lenders will have an early repayment charge and the ability to increase your monthly payments may be limited. Remortgaging can help you secure a more appropriate deal for your current situation.

What are the drawbacks?

Earning a salary in a currency that isn’t pounds sterling can cause problems with some UK lenders which is why expats may consider an off-shore lender.

One of the main advantages of using an off-shore lender is your salary currency won’t be an issue.

If you do go with a UK lender, be aware that checks are more stringent than they used to be due to changes in the industry. The FCA introduced new rules in 2014 in an attempt to stop people taking out mortgages they couldn’t afford. The mortgage market review (MMR) outcome means that lenders must now ask for proof of income and plans for repayment. This includes a review of not just repayment at the introductory rates but also higher rates.

With these changes there is a chance that you or your partner no longer meets the lenders criteria for remortgaging. Being rejected by too many lenders will ruin your credit score and make borrowing in the future more of a challenge.

The amount left on the mortgage should also be a consideration. Some providers in the UK will not take on a mortgage of £25,000 or less, and if they do the fees may outweigh any savings you would make.

You have decided to remortgage, what’s next?

Switching to a new lender can take up to two months so start early and explore your options.

Some UK lenders will allow you to secure todays rates but start the repayments up to six months later. This allows you to protect yourself against rate increases that may be introduced by the bank in the near future.

Checking your credit rating should be a priority. Money Saving Expert suggests polishing your credit score before approaching lenders to reduce your chance of being turned down. If you are turned down, work on improving your credit score rather than going to another lender only to be rejected again. Remember, too many rejections will have a negative impact on your credit rating.

With a healthy credit score it’s time to sort out your finances. Speaking with an IFA can help you get your finances in order – this is something a lender likes to see when they make a decision.

A final word on rates.

We touched on the potential savings to be had by remortgaging and avoiding hikes in interest rates. Increases to rates set by the bank are different to those influenced by the Bank of England.

If you go with a UK bank then bear in mind that the interest rate set by the Bank of England heavily influences the standard variable rates offered by lenders. For example, if the rates set by the Bank of England have increased during your fixed term, you may want to consider other fixed term options to avoid the variable rates.

Our expert mortgage advisors can help guide you through the potentially tricky process of remortgaging. If you would like some more information specific to your circumstances you can reach us by using the contact form below.

The post How to Remortgage as an Expat appeared first on Holborn Assets Cyprus.

How Good Are Buy-to-Let Profits in 2019?

user — Fri, 17 May 2019 06:35:55 +0000

Buy-to-Let (BTL) investors in England and Wales make an average of £80,000 selling on their properties – before tax. And in London, the average pre-tax profit on a sold BTL property is a whopping quarter of a million (£248,120). That’s according to figures from top estate agents Hamptons International released this week. So who said Buy-to-Let was bust? The UK BTL sector attracted 36% less new mortgages in 2017 than it did in 2015 – when new landlord mortgages stood at 117.5k. Potential landlords have been put off the BTL sector in the UK because, over recent years, it has been hit by government tax raids. Stamp Duty for landlords was beefed up by 3% in 2016. Lending laws have stiffened up. And most crippling of all has been the change to mortgage tax relief: Consumer watchdogs Which? explain that, if you are a UK landlord, “by April 2020, you won’t be able to deduct any of your mortgage expenses from rental income to reduce your tax bill. Instead, you’ll receive a tax-credit, based on 20% of your mortgage interest payments.” But the new statistics from Hamptons International point to an enduring strength of the BTL – and that is, as Holborn suggested back in January this year, that “one of the key advantages of BTL is exposure to the underlying value of the property asset.” Thisismoney.co.uk confirms that, “while a crackdown on tax relief and higher investment costs may have taken their toll on landlords’ appetite to invest today, rapid house price growth over the past 10 years has left long-term landlords with properties worth far more today than when they bought them.”

Average BTL profit before tax on property sold – by region:

Region Average gain 2018 London £248,120 South East £108,220 East £88,410 South West £62,540 West Midlands £39,970 East Midlands £39.090 Wales £32,410 North West £30,160 Yorks & Humber £26,870 North East £11,810 Source: Hamptons International, 2019 Regional variation rules the UK property market – as ever! The biggest average pre-tax profit recorded was in the London borough of Kensington and Chelsea: £1,072,800. That’s almost a hundred times more profit than that recorded for BTL sales in the North East of England.

Too late to cash in on BTL?

There’s almost 60,000 new BTL mortgages projected to go through in the UK over 2019. So the market can’t be that dismal. But it is certainly true that BTL activity is under pressure. A quarter of private landlords in the UK are looking to sell at least one property this year, according to figures from the prestigious Royal Institution of Chartered Surveyors. Aneisha Beveridge, Head of Research at Hamptons International, observes that, “more investors are shifting their focus from capital gains to yields.” Rental growth was up to 2% in April 2019, with a 3.9% increase year-on-year for London rents.

Busting BTL!

The UK BTL market has always offered powerful options to expat investors. You can easily arrange a BTL mortgage for the UK using our very own Holborn Mortgages Team based in our head office in Dubai. We have years of experience in trans-national mortgage arrangement. And our hallmark is ensuring that all the paperwork is checked and perfect before it even gets to a potential lender; this prevents nasty surprises for our clients!

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What is Off-plan Property Investment?

user — Thu, 28 Mar 2019 10:20:35 +0000

xOff-plan investment is an exciting and flexible option for private investors that is gaining in respectability worldwide. Both the UAE and the UK offer established sectors where private investors can gain excellent, long-term returns (in exchange for some risk, of course). And, in South Asia (particularly Vietnam), there are emerging markets that offer great opportunities to get in at the bottom right now in 2019.

What is off-plan investment?

Investing off-plan means buying a property before it is actually built – and, when it is built – rather than living in it, the investor will either sell, or hold the property and rent it out. Many off-plan formats exist. But always the priority is to clarify with an independent, qualified professional exactly what risks are involved, even if you are dealing with a respectable developer. In the off-plan investment sector, an IFA by your side works wonders!

What’s a key advantage of off-plan investment?

As the buyer, you choose how much you want to get involved in your investment. Suppose you were planning to buy off-plan with the purpose of eventually renting the property – companies exist which will take care of all management areas of the project, including furnishing the property and organising its letting to tenants. Buying off-plan from an established agency means you can take advantage of their bulk buying, with “property deals being heavily discounted and high yielding.” (sequre.co.uk) You can even get access to discounted solicitor services thanks to agencies pre-negotiating bulk discounts. Be sure to keep your IFA in the loop, whoever you choose to employ: your IFA has your financial interests at heart, unlike other appointed professionals necessarily!

Will I need a deposit to kick off my off-plan investment?

It depends, but certainly one of the big advantages offered by off-plan investment is the down-payment system. You can often pay by payment plan. This means you can pay in regular instalments – rather than have to cough up in one go the 25% deposit, for example, that applies in the UAE to all residential property purchases.

Can I get a mortgage for my off-plan investment?

Yes, you can. In the UAE, for example, Rakbank, Noor Bank and UAB are providers. Lenders view off-plan mortgages as more risky than bricks and mortar mortgages. And this can be reflected in the rate of interest you are charged. But it all depends on which developer is involved and what stage the project is at (the closer to completion, the less expensive the mortgage).

What sort of prices am I looking at for off-plan property?

As with all investments, the amount of risk determines the purchase price. More risk for the buyer = lower price. Off-plan property is cheaper than built property because it is an inherently riskier purchase. As thenational.ae points out, “there is a chance your property may not be built, may be built late or not to the specifications you expect.” On the basis that they have demonstrated success in the past, developers with a good reputation often charge higher prices than less well-known developers.

Can I sell my investment in off-plan property?

Not until it has actually been built. Unless you manage to broker a deal with somebody you know. There is not an established market in off-plan investments for buyers to sell to other buyers; it is an “illiquid asset” ie. not sellable.

Is buying off-plan better than buying bricks and mortar?

The great advantage of buying actual properties as an investment is in the area of “opportunity cost”. For bricks and mortar purchases, there is no problem with opportunity cost. The opportunity cost of an investment is how much your money would have been earning if it had been invested elsewhere. A rule of thumb is say the opportunity cost is 5% per annum – because you might well get this by simply putting your money in a high interest savings account, or ISA. The problem with off-plan investment is that, until your property is actually built, your money is not gaining any interest at all. It is not as if developers pay you interest on your downpayments. With bricks and mortar, of course, you can immediately start making money on your investment – by either renting it or selling it. With off-plan investment, your money can’t be touched for years. The good news about opportunity cost is that you can factor it into your investment equation – just as you would with any other cost. Just make sure your return on the investment is large enough to absorb the opportunity cost. Keep your eyes peeled, and get your IFA on the case too!

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UK House Prices: the Brexit Effect?

user — Tue, 26 Feb 2019 15:49:25 +0000

Is it a good time to buy a house in the UK? Is Brexit opening up opportunities, or closing down the whole market? Should you hang on and see where we are after the March 2019 Brexit deadline passes? With conflicting figures flying around in the press every week, here’s a simple way of looking at the effect of house prices in the UK: Prices in the UK housing sector have continued to rise – despite the Brexit effect. But the rate at which prices have risen has dropped. The market is slowing down. But it certainly isn’t falling apart.

Average UK house price since the Referendum

In June 2016, at the time of the Brexit Referendum, the average house price in the UK was £213,000. (ONS House Price Index, February 2019). In December 2018, the average UK house price was £18,000 higher – at £231,000.

Rate of UK house price growth since the Referendum

The rate of year-on-year house price increase in the UK stood at just over 8% at the time of the June 2016 Referendum. In just a year, this tumbled to just over 4% in June 2017, then 3% in June 2018. 2.49% YOY growth was recorded in December 2018. So prices are still rising – but at a significantly diminished rate.

Surely Brexit can’t explain everything?

No, it can’t. Brexit hasn’t been the only factor in UK house prices. In April 2016, for example – just before the Referendum – there was a 40k+ spike in housing transactions to over 140,000 in a month. Why? Because buyers were getting into the market before the 3% stamp duty surcharge on BTL and second-home investors. Since then, housing transactions have stabilised to between 70k and 100k a month. Brexit aside, “many argue that the slowdown in England is simply a long-overdue market correction.” (which.co.uk)

UK Housing Market 2019

So Brexit has slowed the growth in UK house prices. But prices continue to rise. So, before prices get even more expensive, is now the time to take the plunge as a buyer? Mortgage rates are low, with great deals being offered on fixed rate deals. And will these rates last forever? Probably not, but mortgage lenders are unlikely to start ramping up rates until they see a return to a healthier year-on-year price increase in the UK sector – OR a no-deal Brexit sends interest rates sky-high. That’s the risk. Get into the UK housing market as soon as possible before Brexit – or wait and take advantage of whatever happens next. For a fluid 2019 UK housing market, sellers have to be confident too. There’s no point selling up if you think that the value of your property is going to rocket as a result of a no-deal Brexit. But uncertainty, as ever with Brexit, prevails. Kate Faulkner of propertychecklists.co.uk says that, “it’s not only demand that’s dropping – supply is, too, with many people battening down the hatches until we have a clearer picture of what’s going to happen.” That’s going to support higher prices, but also limit the amount of transactions for the time being. Still other factors come into play. The National Landlords Association (NLA) suggests that, “changes to immigration policy could reduce demand from those coming to the UK, or drive up interest from those taking advantage of new arrangements with states outside the EU.” The first-time buyer market in the UK has actually risen by almost 2% between 2017 and 2018. In 2018, there were 370,000 first-time buyer mortgages arranged. And this, says the BBC, “is the highest number of first-time buyer mortgages since 2006, when there were 402,800 first-time buyers.” Lending to new buyers by value stood at £62bn in 2018 – up almost 5% on 2017.

So what should UK house buyers do?

In September 2018, Bank of England Governor Mark Carney warned that a no-deal Brexit could slash house prices by a third. We’re on the very brink of no-deal right now. Speak to your IFA or direct to our Holborn UK Mortgages Team. We routinely arrange UK mortgages for expats – whether they are buying as a second-home, as a family arrangement, or as a buy-to-let project. We know the ropes. What to do next depends entirely on your personal financial circumstances. You need to look at any property purchase in the context of your wider financial picture. Give us a ring – or chat online – and take your first step towards a Brexit-beating property decision for you and your family.

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Buy To Let in the UK 2019

user — Tue, 08 Jan 2019 00:38:06 +0000

New Buy-To-Let (BTL) mortgages in the UK have fallen in number by a third in two years. But don’t write the sector off! After all, over 60,000 BTL new mortgages are expected to go through in 2019. And there’s plenty to offer the investor looking to park some of their pension in property that could pay for itself eventually – despite a triple whammy of government-backed attacks on the UK BTL sector last year in stamp duty, tax relief and lending rules. This barrage of financial legislation has serious ramifications for the future: average yields from UK BTL are predicted to fall from almost 5% in 2018 to just over 4% in 2023. The market is getting tougher. But that does not mean a canny investor cannot thrive. Remember that, even if a landlord is only breaking even on rent, any property is likely to rise in value over the long-term. As an investment class, UK property outperformed the stock market between 2000 and 2014. And experts say that, with the right advice, investors can avoid the new legislation being a financial prang. MD Karen Bennett for Commercial Mortgages reports that, “the market remains buoyant for those with a long-term strategy who draw upon specialist advice to fully understand the impact of these policy shifts.” In other words: know how to navigate the legislation sensibly, and BTL still offers advantages.

Resilient UK Buy-To-Let Sector: 2018 Survivor!

One of the key advantages of BTL is exposure to the underlying value of the property asset. That remains, whatever tough regulation is currently in fashion. But would-be landlords in the UK have been put off recently. Buy-To-Let in the UK attracted a third less new investors in 2017 (75k new BTL mortgages) than it did in 2015 (117.5k new BTL mortgages). That’s a two-year drop of 36%. Brexit hasn’t exactly helped investor confidence (!). But apart from that, no less than four factors have made it difficult for UK landlords to see how BTL can work financially:

Stamp Duty hike: 3% surcharge on stamp duty introduced in 2016.
Tax Relief cut: a controversial and progressive government scheme that is slashing relief on mortgage interest.
Lending Rules tightening: more difficult to get a BTL mortgage.
Housing market cooling: less transactions generally.

Despite these pressures, the number of new BTL mortgages is expected to start rising again in just 3 years – 2021.

And the top threat to BTL landlords in 2019?

… are the cuts to mortgage interest tax relief to be phased in from 2017 to 2020. These cuts, which make BTL more expensive, were designed to support first-time buyers in the wider housing market; the method being to discourage big landlords from buying up too much of the stock. Big landlords were the target. But it turns out that it is the smaller investors who have ended up getting squeezed out. Adam Male of UK letting agent Urban.co.uk says that, “it is those with the extensive knowledge and resources within the buy-to-let market that are able to take advantage of the shifting landscape – and the average landlord with one, maybe two, properties are feeling the pinch and having to exit the sector.”

How does the BTL tax relief cut work?

For tax purposes, landlords used to be able to include their mortgage interest as an expense. This meant that they would pay tax on the net profit of their BTL operation. With the new rules phasing in a staggered reduction to this tax relief, landlords will by 2020 no longer be able to claim a single penny of mortgage interest as an expense. Critics say this means the investor will be getting taxed unfairly. That’s because disallowing a cost of the business from tax relief means it is effectively gross income rather than the net profit of the BTL business that is being taxed. Put simply – if you’re in the potato business, you don’t get taxed on your costs in buying and managing those potatoes; rather, you get taxed on what remains of your money when you’ve sold your potatoes and paid for everything else. So why should it be any different in the buy-to-let property sector? It’s certainly one view on legislation that is likely to remain something of a hot potato itself. An influential report from the Shawbrook Bank and CEBR “suggest that for some landlords, especially high tax payers with a leveraged portfolio of properties, their buy-to-let properties will become loss-making if their mortgage interest cost is 75 per cent of rental income or more.” (thisismoney.co.uk)

BTL opportunities in 2019

The top average rental yield for the UK Q4 2018 was 11.99% in Nottingham (postcode NG1).
Yields continue to be low in the UK capital London. Avoid North of the River and look East; postcodes E6, E15, E13, E14 and E4 all rank in the top 10 for London.
“For a buy-to-let safe bet, start looking for properties in university cities.” (Shawbrook and CEBR)
Interest rates for BTL mortgage lending have been very low as lenders try to tempt a shrinking market. But interest rates are set to rise – that’s the expert consensus. The average five-year fixed buy-to-let rate sank to a low of 3.40 per cent in October 2018, but has since drifted up to 3.54 per cent.
Nobody knows what the impact will be of the 2019 Tenant Fees Bill, which will remove letting agent charges to tenants as well as place a cap on damages fees to tenants.

Bottom 10 Buy-To-Let postcodes in Britain

1. CW12 (Crewe) – average rental yield 1.88%

2. HP9 (Hemel Hempstead) – 1.91% 3. N6 (London) – 1.93% 4. WD7 (Watford) – 1.99% 5. TW20 (Twickenham) – 2.00% 6. DY9 (Dudley) – 2.12% 7. EN6 (Enfield) – 2.13% 8. YO11 (York) – 2.14% 9. GU29 (Guildford) – 2.16% 10. BR7 (Bromley) – 2.18% (Source: Q4 2018 figures from totallymoney.com)

Is BTL still worth it?

Buy To Let in the UK is definitely still worth looking at. It all depends on where your own finances stand and what your long-term objectives are. BTL is just one option for making a long-term investment. A key factor to consider is how much of a mortgage you will need to take out. Too big a mortgage, and you will fall foul of the ongoing cuts to mortgage interest tax relief. If your mortgage interest payments are 75% or more as a proportion of your projected total rental income, experts say the new UK mortgage relief cut will put your BTL business in the red. Using an IFA to talk through your options can help you make an informed decision. Based abroad? Using a reputable mortgage broker in your expat country of residence can make arranging a BTL mortgage in the UK a lot easier – and that’s because mortgage brokers handle this sort of business routinely.

The post Buy To Let in the UK 2019 appeared first on Holborn Assets Cyprus.

Where to buy abroad as an expat?

user — Tue, 09 Oct 2018 09:01:11 +0000

Expats: where should you buy a second home?

Perhaps, like many expats who work and live overseas – enjoying career success and a new expansive and international lifestyle – you are considering investing in a second property. Perhaps you’d like a place to retreat to during the holiday season, or an investment for your retirement and a place to spend your winter years in the sunshine. Or perhaps you want to dip your toe in the property game and invest in a buy to let. Or maybe you just want to have a go! To make your life easier, we’ve highlighted a couple of the most exciting places expats are flocking to for investment opportunities and gorgeous holiday getaways.

The Philippines: tropical climes, economic growth and a booming housing market

(A property in Valencia, Philippines) Pros:

Stunning beaches and tropical climate make it a desirable destination.
Reasonable cost of living.
Booming economy and thriving real estate market.
Great accessibility from UAE.

Cons:

There are rules governing the buying of property by foreigners in the Philippines. Its possible to buy a condo or flat but 60% of any block must remain locally owned.
Expats can own buildings but not land.

In a recent survey of more than 20,000 people representing more than 80 countries, the Philippines was voted the best country to invest in. The survey, conducted by the Wharton School at the University of Pennsylvania, found that respondents were highly positive in reporting economic stability, technological expertise, entrepreneurship and favourable tax environment. And the mood of optimism is high among the nearly 700,000 expat Filipinos in the UAE too! The latest poll conducted by New Perspective Media amongst Filipinos in the UAE reveals that 95% of those surveyed believed that property prices in the Philippines would continue to rise. Local knowledge counts for a lot. And the strength of the Philippines housing market is not the only reason for optimism according to the results of the survey. Filipinos in the UAE are also feeling confident about their careers too, with over 90% stating they felt their careers would continue to flourish, so much so, in fact, that 80% feel confident enough to consider investing in a second property. And they are looking toward their home country as a golden opportunity investment. Forecasts from the World Bank also support this sentiment, hedging that the Philippine economy will continue to be the fastest growing in the Asean (Association of South East Asian Nations) – based largely on the strength of its real estate sector, and the $180 billion investment by the Government. And with the Philippine currency currently weak against the US Dollar, now seems like the perfect time to invest. Where should I look to buy in the Philippines? Davao City: the largest city outside of Manila is also the fastest-growing. In 2016, Davao’s economy grew by a substantial 9.4%, compared with growth for the broader Philippine economy of 6.9%. As it’s also the hometown of the country’s president, Rodrigo Duterte, Davao has become a hub for burgeoning business and development projects and is home to the Philippines third largest international airport. Davao has a national reputation as one of the safest and cleanest cities in the country. Add to that its proximity to the Samal Islands, famous as a beach destination in the region, and it is easy to see why Davao City is such a popular choice among ex-pat investors. Cebu: Cebu has been given the nickname “Queen City of the South” and for good reason. As well as being famed for its stunning beaches and local charm (naturally popular with tourists), Cebu also has an extremely robust economy and booming IT and BPO sectors. The growth of its economy and the high-end demands of the housing market clientele have resulted in the wide-scale development of high-spec, luxury condominiums, meaning that Cebu now has the second highest concentration of condominiums in the Philippines.

The Caribbean: sun, sand and investment opportunities

(A property in Bridgetown, Barbados) Pros:

Variety and choice to suit all budgets and tastes.
Many islands are tax free – including international income.
Great buy to let opportunities and rental market (it’s the number one honeymoon destination!).

Cons:

Celebrity popularity has driven prices up in recent years.

According to propertyguides.com, European buyers account for 60% of property sales at the luxury end of the Caribbean market, including Sir Richard Branson who owns a couple of Caribbean islands! Indeed, the Caribbean is well known for playing host to celebrity tropical getaways. But if you’re not in the market for a multi-million luxury investment to rival Richard Branson, what are the opportunities available to you? And what makes the Caribbean such an enticing investment opportunity? When most people conjure a picture of their perfect beach getaway, it looks just like the tropical paradise on offer across the Caribbean, and it’s easy to see why so many people fall in love with the islands. But apart from swathes of beautiful beaches, snorkelling in sandy reefs, and bountiful and luscious countryside, the Caribbean has much in the way to offer of bustling city life and culture – of course underpinned by that relaxed attitude and laid-back vibe that has come to define the Caribbean way of life. And with over 7000 individual islands to choose from, there’s something to suit everyone! Where should I look to buy in the Caribbean? Dominican Republic: the north coast of the island boasts some of the Caribbean’s most beautiful beaches while the east coast is fast becoming a golfer’s paradise. The Dominican Republic offers not only the advantages of low-cost living, but property investors can find some real bargains too! Popular among the retired and “snowbirds” (US expats escaping the North American winters) the Dominican Republic has a stable government, vastly-improved infrastructure and a warm welcome for investors from the USA, Canada and the UK. Workers tend to reside in the bustling capital city Santa Domingo, but there are also vibrant communities in Puerto Plata, Sosua, and Cabarete. Look for bargain properties in the lovely town of Las Terrenas on the Northeast coast for a rustic feel with a vibrant pulse and miles of white sandy beaches. Barbados: with year-long sunshine and average temperatures between 27-29 degrees, Barbados makes a perfect destination for a holiday getaway or long-term retirement living. The island is just 34 kilometres long and boasts a lovely mix of local culture (architecture, food, and the arts) and international diversity. The capital Bridgetown has a thriving expat community and is famed for its cricket ground, while the coastline is peppered with stunning reefs. There are still investment opportunities to be had on this beautiful island, so owning a slice of paradise may well be within your grasp.

The UK: traditional territory for expat investment

(A property in Richmond, London, UK) Pros:

Familiarity with the housing market and home culture.
You can keep a base at home with a view to retirement or an investment for your children.

Cons:

Tax liability in the UK – all income and gains generated from UK assets are subject to UK tax.
The weather!

You’re probably not looking at the UK as a sunny retirement option! However, buying a second property in the UK can be an enticing investment opportunity for UK expats for a number of reasons. You know the market, speak the language, and maybe want a place to move back to in your retirement to be with the grandchildren. Also, for prospective landlords, renting out your property may seem like a more manageable undertaking in a culture, market, and location you are familiar with. There are still great buy-to-let mortgages available and your Holborn advisor is best placed to find the best deal for you with Holborn’s cross-border connections. Tax Implications for UK expats Tax can remain, for many expats, a muddy area that is full of confusion and misguided beliefs and it is worth re-iterating that expert advice really pays off in the long run. But there are some important things to bear in mind from the outset when managing your assets as an expat: Capital Gains Tax Capital Gains Tax (CGT) refers to the tax you are liable for as the result of gains made once an asset is sold off, or disposed of, within the UK. The tax loophole that previously allowed expat investors (especially in the buy-to-let market) to generate income (including sale of property) in the UK tax free was closed in 2015. Capital gains tax is charged at a rate of 28% above the income tax basic rate band, and 18% below it. Worryingly, a study by Old Mutual revealed that over 25% of British expats interviewed did not realise that CGT would have to be paid if their UK property was sold, regardless of residency status – and remember that the taxman will not accept complacency as a defence! Inheritance Tax Inheritance Tax (IHT) refers to how your estate will be taxed upon your death. Currently, the threshold for UK Inheritance Tax is £325,000 for individuals (more for married couples), with anything over this amount subject to 40% tax. As a UK expat, wrapping your head around the rules pertaining to your domicile status is an essential part of your estate planning, as it is domicile status that determines your Inheritance Tax liability, and not residence. Understanding the difference between residency status and being British domiciled is key to understanding your UK Tax liability. A report by Old Mutual revealed that 82% of British expats did not realise their worldwide assets were subject to UK IHT because of their UK domiciled status. Determining your domicile status can be a fairly complicated endeavour – though the rule of thumb is that you are considered domiciled in a country that you consider to be your ‘homeland,’ the place where you have your home permanently or indefinitely. You can live abroad for many years and remain domiciled in the UK. Changing your domicile of choice by permanently relocating to another country can be a complicated and rigorous process as HMRC will look for any indication that you plan to return to the UK one day and regard Britain as your homeland. This can even extend to burial wishes on home soil. It takes three years to shed UK domicile status, and you must prove that you have the intention of remaining in your new country of residence with no reason to return to the UK. Gaining expert advice in this area as part of your estate planning is essential for UK expats navigating the tax laws of more than one country and understanding your Inheritance Tax and Capital Gains Tax liability. Speak to your Holborn advisor to today for some clarity on your cross-border affairs.

The post Where to buy abroad as an expat? appeared first on Holborn Assets Cyprus.

How to Get a UK Mortgage when Living Abroad

user — Thu, 16 Aug 2018 08:20:00 +0000

It is easy to get a mortgage in the UK if you’re an expat – provided you don’t go jumping in unprepared. There’s plenty of hoops to get through: waiting for an offer to be accepted, banks and solicitors’ requesting paperwork, while you keep everything crossed in the hope of a hiccup-free exchange. So slow down! You may too have an endless list of questions about the process and the possibilities. Allow us here at Holborn we reveal just how simple, and stress free, the process of arranging an expat mortgage can be. With expert advice, local knowledge and years of experience in hand, Holborn can safely steer you through this journey.

Can I get a UK mortgage if I don’t have a UK bank account?

Yes, but this is where experience, expertise and market exposure matters. The UK’s big banks usually look for proven income and a reliable record with credit rating agencies – as an expat you may not have these. Many lenders will accept foreign bank accounts and foreign currency, but you may need expert advice about foreign currency mortgages and the risks associated with investing in a foreign currency, which could you leave you vulnerable to currency fluctuations, for example. Getting expert advice, from specialists in expat mortgages, can help you navigate any initial hurdles and find the right mortgage – in the right currency – for you.

Can I get a UK mortgage if I live permanently overseas?

Yes, it doesn’t affect your mortgage eligibility if you live permanently overseas or even if you never plan to return to the UK. Whether you want to purchase a house back home to have a base to return to, or invest in a rental property, we can help find the mortgage that suits you.

Will I have access to a range of mortgages as an expat?

Many big banks have expat mortgage options available now, and buy-to-let continues to be a popular choice among expat investors. But the big banks may not offer the best deal for you, and if you don’t work for a multinational company you may find your options limited. This is where Holborn can help. Our mortgage expert Jo Phillips explains why: “With the relationships we have in the UAE and with international mortgage providers we are able to give you the best mortgages in the market.”

What is an “agreement in principle?”

The first step in buying a new home is to figure out which mortgage product is most suitable for you, and exactly what your budget is. Holborn’s market exposure and access to a range of products can help secure you that initial mortgage agreement with the lender, known as an “agreement in principle,” so that you can begin house hunting. Holborn performs a full compliance check at this point, ensuring a smooth process and avoiding time-consuming errors. Getting your “agreement in principle” can take as little as 3-5 days.

Will paperwork be difficult to organise and time-consuming?

Paperwork and applications can often leave you with a headache, but as an expat there may be specific challenges to you collating the information you need (even proof of address or utility bills for example). Gaining expert advice from the very beginning can save you time in the long run. Our expert, Jo Phillips explains why Holborn is well placed to help you through this process: “Our experience means that we know the specific criteria and requirements of the banks and we are able to get the mortgage through as soon as possible for you.” You don’t waste time figuring out the paperwork – we take care of that for you.

Top tips

Get your finances in place before you begin looking (agreement in principle)
Get expert advice from a specialist in expat mortgages from the beginning
Let Holborn do the hard work for you

At Holborn we offer an end-to-end service. This means that we not only help you with the mortgage, we assist you with all aspects of the property transaction. Over 20 years of experience, local knowledge (of the UAE, the UK & other international markets), and a focus on professionalism ensure that your purchase goes as smoothly as possible.

The post How to Get a UK Mortgage when Living Abroad appeared first on Holborn Assets Cyprus.

Mortgage & Property Archives - Holborn Assets Cyprus

Buying property in Cyprus: Where and why you should invest

Things to know about the Cyprus property market

Where should you buy property in Cyprus?

Property in Nicosia

Property in Limassol

Property in Larnaca

Property in Paphos

Holbon Assets Cyprus helps expats invest in property

How to Remortgage as an Expat

What are the benefits of remortgaging?

What are the drawbacks?

You have decided to remortgage, what’s next?

A final word on rates.

How Good Are Buy-to-Let Profits in 2019?

Average BTL profit before tax on property sold – by region:

Too late to cash in on BTL?

Busting BTL!

What is Off-plan Property Investment?

What is off-plan investment?

What’s a key advantage of off-plan investment?

Will I need a deposit to kick off my off-plan investment?

Can I get a mortgage for my off-plan investment?

What sort of prices am I looking at for off-plan property?

Can I sell my investment in off-plan property?

Is buying off-plan better than buying bricks and mortar?

UK House Prices: the Brexit Effect?

Average UK house price since the Referendum

Rate of UK house price growth since the Referendum

Surely Brexit can’t explain everything?

UK Housing Market 2019

So what should UK house buyers do?

Buy To Let in the UK 2019

Resilient UK Buy-To-Let Sector: 2018 Survivor!

And the top threat to BTL landlords in 2019?

How does the BTL tax relief cut work?

BTL opportunities in 2019

Top 10 Buy-To-Let postcodes in Britain

Bottom 10 Buy-To-Let postcodes in Britain

Is BTL still worth it?

Where to buy abroad as an expat?

Expats: where should you buy a second home?

The Philippines: tropical climes, economic growth and a booming housing market

The Caribbean: sun, sand and investment opportunities

The UK: traditional territory for expat investment

How to Get a UK Mortgage when Living Abroad

Can I get a UK mortgage if I don’t have a UK bank account?

Can I get a UK mortgage if I live permanently overseas?

Will I have access to a range of mortgages as an expat?

What is an “agreement in principle?”

Will paperwork be difficult to organise and time-consuming?

Top tips