Property specialist and founder of Hurst & Wills, Lisa Bathurst, explains how you can turn R700k into an investment property in the UK that pays itself off.
“Hurst & Wills is very excited to announce our recently strengthened partnership with UK mortgage lenders,” says Bathurst. “This has meant that we are currently getting mortgages for 90% of clients at the low interest rates offered in the UK. Effectively this means a client now only puts down 30% of the investment property’s cost and can borrow the rest in the UK with rates as low as 3%. Based on the stock we have available and the current exchange rate, clients can purchase an apartment for R700k and let the rest be paid by your tenants in rent,” she says.
5 steps to getting a UK mortgage
- Confirm the amount you have to invest
- Speak to your independent property advisor, at Hurst & Wills to decide on which property you would like to pursue
- We then arrange a call with our mortgage specialist who will ask some questions around your general financials and earnings.
- Our specialist will confirm, the same day, if you fit the criteria for a UK mortgage, and will then propose options of rates/terms/products that you can apply for.
- You will fill in some paperwork, pay an initial arrangement fee, and be given a ‘mortgage in principle’ allowing your property consultant to complete your property purchase.
“The lenders generally estimate what you can afford, and use the property’s value to confirm it. They do their own valuation on the property, further securing your investment with this independent expert valuation,” she says. “We are delighted by how successful this new partnership has been for our clients.”
The UK has one of the biggest mortgage markets in the world, with 11.1 million mortgages worth around £1.3 trillion. There are no legal restrictions on any adults getting a mortgage in the UK. Foreigners can take out mortgages in the UK whether they are residents or non-residents, although terms can vary depending on circumstance.
“If you earn R500k a year, and would like to invest in an overseas property, you can leverage at UK interest rates of 3%, and borrow up to 70% of the value of the property,” says Bathurst. “Generally, we are able to secure a 70% Loan to Value with rates varying between 3 and 4% over 25 years, depending on circumstances. This is a third of the cost of lending money in South Africa. Clients who are purchasing projects we are currently promoting also don’t have to worry about doing the due diligence as we do that for you.
That means that spending around R700k can get you a buy-to-let apartment in the right area of the UK,” she says. “With global stock markets feeling the effect of the Covid-19, there has never been a better time to invest in bricks and mortar.”
Hurst & Wills is able to manage the entire process for you, with all consultations done over video conferencing and interactive consultations, rather than meeting in person. “75% of our clients purchase investments properties unseen, meaning there is no need to travel to view properties,” she says.
Client example: Mrs Jones, living in SA is purchasing a buy-to-let apartment in Manchester, she has R1million to spend. She earns more than 500k a year, has a SA passport and no UK bank account. Having spoken to one of our consultants, she was able to secure a mortgage in principle, the process took less that 24 hours. For her R1million as a deposit, she can purchase property to the value of R4million. This means two apartments in Manchester. She is borrowing at 3.5% and her tenants will pay her bond repayments. The rent will not only cover her bond repayments but there is a bit left over, compounding in GBP. The properties she will purchase are also expected to grow by 28% over the next three years and she can refinance to take out equity at any point.
“With stocks and shares plummeting due to the coronavirus, and accessibility to low interest rates, now is the perfect time to invest in bricks and mortar in a stable international currency, like the pound.”