Investment Property in UK - Where to start?

Real Estate
1

Hi Mustachians

I am a fan of this page for quite some time and it helped me to buy our own house + some further investment properties in Germany (I am German and invest into my home area that is close to the border).

Now, as my wife (UK citizen) and myself have to help a family member back on their feet after some life events (you know, stuff happens as we are all rotating on this organic spaceship), we are looking into the idea of buying a property in UK and rent it out to this family member.

As buying a place in CH and GER is quite straight forward (please feel free to ask me if you have questions via PN), I am wondering if anyone has experience to buy a property in UK as a citizen (my wife) but not being a resident.

I have seen so far that most mortgage brokers do not support this setup and refer to special “expat mortgage providers” (which I have no clue about yet).

Long story short, if you have any resources, good ideas or any experience getting this done, we would be more than happy if you could share this with me.

Kind regards
snaily

2

Hi, I don’t think I can offer much help, but as a UK expat, I’m currently renting out my old flat in Edinburgh to a family member and thinking about buying another. So in a similar situation maybe.

I’ve been using this Property hub website as a free resource for info on trends etc: https://propertyhub.net/

I called a UK mortgage broker a few months ago and he seemed to think it should be possible to get a mortgage with certain UK providers specializing in expats for rates in the region of 3% and a deposit of around 20-25%.

One thing to be aware of if you buy in England (not Scotland) is that they have a concept of “leasehold”, which means roughly that you own the building, but not the land it’s built on. The owner of the land can then extract a “ground rent” from you which can increase in the future. I don’t think this is a major problem normally, but worth looking into. I think it’s worse if you buy a condo style place in a modern development.

Hopefully someone here will know something more helpful!

3

It’s a broad topic, do you have any specific questions? Which part of UK are you looking at and flat or house?

Another point to be aware of is taxes, if you buy in joint names your have about £12k /yr tax free allowance each. On the other hand I believe interest is no longer deductible

You will need a specialised mortgage broker. Renting to a family member may cause problems for getting a buy to let mortgage, you may have to get the mortgage based on you own income.