At present, with 29 March looming ever closer there is a great deal of uncertainty about Brexit deals and how life will be different post Brexit for the 3.8 million EU citizens currently living in the UK. For EU nationals who were thinking of investing in UK property, the current situation has raised many questions.
Will European Nationals Buy UK Property After Brexit?
The most important question is whether the EU nationals living in the UK will be able to stay in the UK if there is a No-deal Brexit. According to a leaked government paper the answer is yes, ministers are keen that all EU citizens currently living in the UK will have the right to continue to do so and this is regardless what problems UK citizens living in EU countries face.
Furthermore, these EU nationals will be able to access the National Health and Benefits system. Ministers are keen that all of these EU nationals are allowed to stay to try and avert staff shortages that would be created if they were asked to leave.
For those EU nationals wanting to invest in the British property market, Peter Robinson CEO of the Association on International Property Professionals (AIPP) believes that there will be 'a bumpy road ahead' for about five years especially as the exchange rates could be impacted in the short term.
The consensus of opinion is that EU nationals will be able to buy property in the UK after Brexit, but owning a house will not give them the automatic right to live in the UK. Foreign property buyers will be entitled to not only own a property, but they will be able to profit from rental income.
In recent years, securing a mortgage or loan has become increasingly difficult for non-British property buyers living abroad. A number of banks, led by RBS and NatWest stopped giving mortgages. The current advice to EU nationals is that if you are considering buying a property in the UK for investment, make sure that you can pay for it in cash as this will be much easier.
UK Property Market After Brexit
Potential buyers are recommended to study the UK market well in advance and to ensure that they do have the financial means to buy a property outright. EU nationals looking at buying a property in Scotland will be able to do so as there are no restrictions on foreigners buying residential properties in Scotland.
Many EU buyers look on UK property as a good investment especially as there can be a good rental yield. Certainly in the two areas that property experts are recommending buyers to consider – the northwest (Lancashire) and north east, a small house can be successfully bought for under £60,000.
This type of modestly-sized house is in high demand because in both areas, there is a booming market in rental properties rather than house purchase. Some convincing figures include the fact that rental yields are on average, 8% compared with 3% in London and 4% in the southeast.
The property market in both areas is currently buoyant and houses are doubling their value in eight-ten years. An interesting point is that houses are far more popular with renters than apartments.
Brexit Causing UK Property Uncertainty
Certainly at present, there is a great deal of uncertainty about Brexit and a no deal exit from the European Union but with 9% of UK properties owned by people not born in the UK, it does make sense that EU nationals are still able to buy and rent a property in the UK relatively easily as this ensures a win-win situation, especially as the rental market in most areas is under pressure.
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