How should overseas buyers borrow money to buy a house in the UK?

In fact, buying a house in Britain is far less expensive and troublesome than everyone thinks. Because at present, the housing prices in Britain are completely inferior to those in our Imperial Capital, Magic Capital, Greater Hangzhou and Greater Shenzhen! Moreover, China people can also borrow money to buy a house in the UK, and the down payment can be up to 75% of the loan in installments. Accident is not an accident, surprise is not a surprise, you think you saved 100 million? ?

I had the privilege of consulting Mr. Kevin, a senior loan and financial investment consultant who specializes in the British market, and gave the most professional suggestions and answers on how to effectively use British bank loans and rationally use leverage to buy real estate in the UK.

Exchange rate &; Overlapping investment effect of double bottom of interest rate

Since Li Ka-shing sold most of the mainland properties on 20 15 and moved to the UK, more and more China mainland and Hong Kong investors flocked to buy British properties. What's more, more than half of the Old City of London was bought by China people. What kind of charm attracts the big bosses to move forward wave after wave?

"There is no doubt that it is the double superposition effect of the lowest pound and the lowest interest rate in the UK for 30 years, which has attracted a large amount of China capital to flood into the London market." Mr. Kevin first analyzes the investment trend from this changing trend of the pound: "The first sharp drop of the pound originated from the British government's referendum on Britain's withdrawal from the European Union. After the results were announced, the pound fell from the original 9.5 position to around 8.4. As the saying goes, opportunities have fallen out. After the market's doubts and caution slowly digested, the pound basically supported at 8.6. These days, the British Prime Minister made it clear that after hard Britain withdrew from the EU in 2020, the pound stood above 8.8 after a short dive, which was consistent with the position of the pound station when Teresa May announced the early election in March, otherwise it would be bad. It began to develop in a good direction. "

"In addition, the Bank of England's base interest rate is the lowest in 30 years, only 0.25%, which means that the government borrows money from you for investment and consumption, and only charges you little interest." Kevin added, "Compared with other markets at present, the average loan interest rate of China customers in the United States and Australia is above 4.5%, while the lowest loan interest rate in Britain is less than 2%. The profit-seeking nature of capital has led to a large influx of funds into the British market, which is also a good opportunity for us to invest in the UK. "

In addition to the interest rate advantage, Mr. Kevin also introduced which banks in the market provide loan services for China buyers. Include HSBC, Standard Chartered Bank and Bank of China. The proportion of loans is also relatively high. As long as the relevant requirements of banks are met, the loan ratio can range from 75% to 40%. In terms of areas where loans can be made, not only London, but also cities such as Reading, Manchester and Birmingham can apply for loans.

So how can we make efficient use of this low interest rate? Mr. Kevin mentioned a unique loan method in Britain, "interest?" Simply put, "only" can pay interest, not principal. At the latest, you can repay the principal at the end of the whole loan period, sell the house first, and then repay the bank principal! Unlike in China, you have to settle the bank loan before dealing with the house.

Let's take a project in the West Side as an example:

? The total price is about 500,000 pounds, the loan is 50%, and the interest rate is 1.59%.

? Using the repayment method of "only paying interest", you only need to pay back 3975 pounds a year and the annual rent is 23660 pounds.

? After deducting all miscellaneous fees and management fees, the net income is 15505.

? Investors can use this money to make other secondary investments, including buying insurance, overseas bonds, funds or wealth management products, so as to obtain stable secondary overseas investment income.

The down payment can be phased and the loan ratio is high.

Moreover, the pace of down payment and loan for real estate purchase in Britain is quite different from that in China. First of all, the down payment for buying a new house in Britain can be paid in installments. To put it simply, most new houses in Britain are faster houses. Before the formal delivery, the investor's down payment can be paid in two or three installments, which relieves the pressure of cash flow and foreign exchange. In addition, the loan ratio can reach up to 75% of the total house price.

Let's take this building in the west side as an example. The delivery time is in the fourth quarter of 20 18. The down payment can be made in three times, the first time 10%, and half a year later 10%. Pay off the remaining 30% when handing over the house, and finally complete 50% of the loan. And before handing over the house, you don't need to pay any loan interest. In China, loans are often paid off before the house is handed over. This time difference ensures that investors can use the rental income to pay the loan interest synchronously and have a stable cash flow.

Peace of mind, consultation and preparation in advance

It is particularly important to adjust your mentality when applying for a loan from a British bank. Banks under the old financial system are very different from those in emerging markets such as China. Emerging markets mainly rely on business income, so the loan conditions will be more relaxed, while the old financial system will pay more attention to risk control. Therefore, actively preparing application materials and proving to the loan bank that he is an applicant with low risk, stable income and good credit record is the first prerequisite for obtaining loans safely.

Mr. Kevin specifically mentioned that if many domestic applicants judge and treat British banks with the consciousness of being the "number one" in the mainland market, they will often end up with inadequate materials preparation and insufficient time reservation, resulting in untimely loan decentralization or a small proportion of loans. But these problems can be solved as long as we actively cooperate with loan consultants. Generally, 6~8 months before the house is handed over, the customer is advised to contact the loan investment consultant to check the family income certificate and other materials. After mastering the basic situation, the loan consultant will help guide the filling of the application materials. As long as the customer provides all kinds of information on time according to the consultant's schedule, there is basically no need to worry about the loan problem.

If you want to know more about the consultation, you can learn about Lansha Real Estate in the UK. ~ Lansha Real Estate, UK