- Patrick Maflin
The UK’s decision to leave the EU has caused the markets to go into free fall and Sterling has hit 30 year lows. However, with uncertainty comes opportunity. Yacht crew will already be reaping the benefits of a weaker Pound as their earnings in Euros or Dollars will be significantly greater. This is turn means that a potential deposit for a house is that much closer. Shifting the focus from the negative to the positive, these times present yacht crew with a unique opportunity to enter the UK property market.
This week the Bank of England announced their plans to allow banks and building societies to lend £150 billion to both businesses and individuals. What this means for potential property investors is that it will soon become easier and cheaper to obtain a mortgage. This action is immediate and opens up the opportunity for 90% of banks operating in the UK to supply credit to UK borrowers.
This is a marked change from the aftermath of the 2007 credit crunch, where it became increasingly difficult for investors to find a mortgage and reach the first rung on the property ladder, and will hopefully open the doors to an increased availability in mortgages for first time borrowers with smaller deposits. This is great news for yacht crew who have been saving their earnings and are now looking to invest in bricks and mortar.
To add to this, there is a strong possibility that the UK base rate is due to drop again. Not the best news for anyone with their savings stored in traditional UK based savings accounts or ISAs, but excellent if you are looking to borrow or renegotiate your current mortgage. Observers are hopeful that these base rate cuts will be passed on to borrowers, making the next 12 months an ideal time to start house hunting or to consider an investment in the UK.
There are also predictions that the British housing market is about to take a small dip. While this might not be the best news for anyone who has already invested during the ‘housing bubble’, it is another great reason to consider buying a property in the UK. With some commentators already mooting the idea that London may become a less attractive property investment for foreign investors, there is a strong likelihood that housing prices in and around the Capital may drop. For yacht crew the next 12 months may be the perfect time to start browsing the property pages.
Despite arguments that the rental market may take a dive if immigration is curtailed, there is still a likelihood of a strong yield from any rental investments that investors make. Additionally, it is worth considering that despite there being a potentially positive buyers market, many young people still do not have large enough deposits to consider investing. This open market puts yacht crew with their tax & finances in order in a prime position to snap up good deals.
While the number of people being approved for mortgages is likely to remain steady, there is a concern that some banks may still be nervous about lending to small deposit investors, despite the measures that the Bank of England are putting in place. To this end it is advisable that if you are considering buying within the next year, whether that be a buy to let property or your primary abode, that you begin to consider the amount of capital that you have available. Check your current investments and the yield that you may be receiving on them and plot any future savings or investments that are in the pipeline.
Additionally, check to see what mortgage you may be eligible for by speaking to an independent mortgage advisor. Independent advisors have the luxury of being able to find better deals than you may do from internet searches and approaching high street banks. Additionally, they should be able to assist and advise you on any future borrowing or if your residency status comes into question.
Any tax advice in this publication is not intended or written by Marine Accounts to be used by a client or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party matters herein.