Will the rising cost of living benefit expats and foreigners looking to buy a home in the UK?


The rising cost of living in the UK could increase the availability of homes for British expats and foreign nationals to buy, a mortgage brokerage has said.

“With energy prices rising, the cost of living rising and interest rates rising, some homeowners will have no choice but to sell. This means there will be an increase in the supply of properties, falling prices and growing availability for those using UK expat and foreign national mortgages, as they are excluded from the effects of the rising cost of life,” Stuart Marshall, director of Liquid Expat Mortgages, mentioned.

The cost of living in the UK has risen, with food prices soaring due to inflation hitting 5.4%. Energy bills are also set to rise by 54% to an average of £1,971, with Ofgem raising the cap on the prices energy companies can charge.

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According to Liquid Expat, the pressure will continue to mount for those living in the UK with interest rates set to peak at over 7% in April.

Marshall said that as house prices rise at record rates, first-time buyers may find it difficult to transition from the rental market to homeownership.

“House prices have consistently risen faster than wages during the pandemic, but the rising cost of living and continued high house prices will only add to the difficulties for first-time buyers. living in the UK. In fact, Nationwide reports that a 10% down payment on a home for a first-time buyer would now represent a record 56% of their gross annual salary,” he said.

In the latest house price index report from lender Halifax, February 2022 saw an annual house price growth rate of +10.8%, the largest increase in house prices since June 2007.

Read more: Halifax House Price Index – house prices are rising at the fastest rate since 2007.

“It’s something we discussed last year, but it’s only getting worse for domestic first-time buyers. Plus, there are still those who sold homes during the peak of the housing market. locked down who struggle to find a property to move into, often caught up in inflated property prices and fierce competition from those with more buying power,” Marshall mentioned.

He reiterated, however, that UK expat and overseas investors using UK expat and overseas mortgages will be shielded from many of the inhibiting factors that affect domestic buyers.

“UK expats and foreign nationals investing in the UK property market are slightly insulated from the concerns of domestic buyers as they are not being paid in sterling. We have seen this in the past when a weaker pound has reduced domestic purchasing power compared to non-UK buyers, who are

often paid in dollars. The current rate of inflation, and the 7% rate expected in April, will then not affect UK expats and overseas domestic investors in the same way it will affect those in the UK, increasing their power to comparison shopping,” Marshall said.

Read more: Foundation Home Loans launches the BTL expatriate range.

“Another important factor to consider is rising interest rates. Many of the lenders who are currently in the UK expat and foreign national mortgage market are not passing the base rate hike on to the consumer. This is probably because the UK expat and foreign mortgage market has proven to be an incredibly lucrative place for lenders.

“Therefore, lenders need to stay competitive to stand out and attract businesses in a growing supply pool. For this reason, mortgage rates for UK expats and foreign nationals are not expected to rise in the same way as domestic rates. Many UK expats and overseas mortgage holders will also be able to take advantage of these offers by paying off their mortgage when their loan reverts to a higher standard variable rate.


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