It has been claimed that UK expats acquiring buy-to-let property back home are typically wasting £40,000 on unnecessary transaction costs, exchange and loan rates in the first five years.
That is the conclusion of joint research by specialist loan packager, Thistle Finance, and global currency specialist, Mercury FX.
They say that specialist currency firms can typically save their clients up to 4% on transaction fees compared to the average high street bank. For an expat transferring the equivalent of £500,000 of foreign currency into GBP to purchase a buy-to-let, that’s an immediate saving of around £20,000.
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.
Thistle Finance and Mercury FX have recently teamed up to deliver UK expats end-to-end savings when purchasing buy-to-let property at home while residing overseas, helping them to avoid the double whammy of punitive transfer costs and property finance rates.
Mark Dyason, managing director of Thistle Finance, said: “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. 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.”
Alastair Constance, founder of Mercury FX, added: “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.”