UK expats acquiring buy-to-let property back home are often wasting £40,000 on unnecessary transaction costs, exchange and loan rates across the first five years of the loan, it has been claimed.
Research undertaken by specialist loan company, Thistle Finance, and global currency firm Mercury FX claims that dealing via specialist currency firms can typically save their clients up to 4% on transaction fees compared to the average high street bank.
A UK expat transferring the equivalent of £500,000 of foreign currency into Sterling to purchase a buy-to-let, could see an immediate saving of around £20,000. Added to this on a £500,000 loan, the interest rate differential between the best and worst rates can conservatively amount to £4,000 annually — or £20,000 over a five-year period.
Mark Dyason, managing director of Thistle Finance, told International Investment that the company had moved from dealing with just a small number of enquiries, to now actively operating in the expat community to deal with the growing interest in their services.
“Far too many UK expats purchasing buy-to-let property at home are being hoodwinked by the high street banks when getting their money back into the country,” said Dyason. “They’re then compounding their misery by failing to search for the best finance rates in what is an increasingly competitive market.
“It’s a painful and wholly avoidable double whammy. With more and more demand from expats for UK buy-to-let, particularly in Scotland due to the arrival of challenger lenders with significantly improved criteria and rates, it’s vital they do their homework before they transact. The result can be savings of tens of thousands of pounds.”
Thistle Finance and Mercury FX have recently teamed ensure that the “double whammy” of punitive transfer costs and property finance rates is avoided.
Alastair Constance, founder of Mercury FX, said: “For UK expats, buy-to-let is the easiest way to hedge against rising house prices back home. You might be off the radar geographically but you’re on the UK property ladder, which can provide real peace of mind. What’s equally important is that you purchase buy-to-let property in the most cost-effective way possible.
“Right now, far too many expats are paying an unnecessary premium for the privilege, in terms of both the money transfer costs and the buy-to-let loan finance they secure.”