Expats In Russia To Struggle To Acquire Foreign Real Estate

By ExpatBriefing.com Editorial 25 April, 2014

UK-based international mortgage broker HR Independent Financial Services is warning that one of the largest lenders in the market has announced that it is no longer accepting any Russia-based mortgage applications.

According to the firm, which runs the website offshoreonline.org, expats living in Russia will now find it more difficult to acquire an international mortgage to buy property in the UK. Buy-to-let home loans and mortgages for main residential homes are both affected by the decision.

The UK and the European Union have recently agreed further asset freezes and travel bans on leading Russian figures in relation to the crisis in Ukraine.

Head of HR Tim Harvey said that there were still some ways for expats in Russia to buy UK property, but that brokers will need to consider business from Russia on a case by case basis. He explained: "it will certainly be harder, with interest rates likely to be around the 5 percent mark."

Harvey described the lender's decision as "not particularly targeted." Expats and ordinary Russians will be affected, rather than high-end Russian buyers, who often have no need for mortgages.

Citing estate agent Knight Frank, the brokerage notes that Russians bought 8.5 percent of all London properties worth more than GBP2m (USD3.36m) between March 2012 and March 2013, but that requirements on corporate buyers to pay Stamp Duty and capital gains tax have contributed to a slowing market.

Expatriate buyers are advised by HR to budget on a deposit of 20 percent for their main house purchase, or 25 percent for buy-to-let deals. The firm adds that banks are often reluctant to lend on properties valued at less than GBP125,000 (USD209,900).

Tags: Russia | Mortgages | United Kingdom | Expats | Investment | Property Investment | Invest | Investment |


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