A guide for foreign investors

Why UK investment property is so attractive

Investment property in the UK has long been a good hunting ground for overseas investors. Property prices, tenant demand and expat investment have all trended upward, yet many foreign investors worry about how to finance a purchase from abroad.

Demand for homes continues to outpace supply. UK housebuilders deliver around 170,000 new homes a year, well short of the 212,000 a year the government has estimated will be needed. With a cultural shift toward longer-term renting, the private rented sector is forecast to keep growing, and major infrastructure spending continues to drive regeneration.

Buy-to-let mortgage rules for foreign investors

The requirements for foreign investors are not very different from those for UK residents. The most important considerations are rental income, deposit and your own income.

Rental income: lenders typically require rental income of around 140% of the mortgage interest. Deposit: the larger your deposit, the more favourably lenders view you, with 30% to 40% a sensible target. Income: some lenders will factor in your personal income when deciding what to lend.

Essential requirements when financing UK property

When you finance a UK investment with a buy-to-let mortgage, all your documentation must be in English. It is best to take advice early so the process runs smoothly, and to understand the benefits of leveraging in property investment to maximise potential returns.