Re: mortgages on return to Uk
 

We are wanting to return to the UK in the next few months (when we have sold our own house here in Holland). I discussed the mortgage situation with the bank manager at Lloydstsb (where I have had an a/c for over 30 years) where my parents live. She didn't think we would have any difficulty getting a mortgage but that is also because our LTV will be quite low as we have a lot of equity in our Dutch house.

However I had hoped I might be able to get a mortgage in Euros (since I continue to receive income in Euros as I have taken early retirement from my Dutch employer and in any case Euro rates are lower than in Sterling). This turns out to be rather difficult as UK banks don't generally offer this. We did try Barclays which was the only UK bank to offer Euro mortgages in the UK but they were only interested if we wanted to borrow a minimum of 500keuros (because of the high cost of setting up such a mortgage).

We also talked with our bank here in the Netherlands (ABN-AMRO) about getting a Euro mortgage on a UK property. It seems this may be possible although the arrangement fee will be quite high because of the extra paperwork involved.

Re: mortgages on return to Uk
 

Wouldn't it be cheaper to convert Euroes to pounds? I know it costs, but it might work out better in the long run if you can get a lower rate.

Did you try HSB?

Bev

Re: mortgages on return to Uk
 

Tried HSB but they couldn't help. I also talked to people at the mortgage brokers John Charcol but they couldn't deal with this. Barclays could arrange a Euro mortgage (or a mortgage in some other currencies such as USD) through their Knightbridge branch (which handles Wealth management).

My thinking was that a Euro mortgage would have two advantages for us

1). A lower interest rate (although that has largely diasappeared as the Euro interest rates have increased so that we would have to pay around 6% for a 10 or 20 year fix.

2). It would provide a form of currency hedge. By moving back to the UK but being paid in Euros we are vunerable if in the future sterling strengthens against the euro. I know this doesn't seem very likely at the moment!

Where we live in the Netherlands there are also vast waves of retirees moving to southern Europe. As a result Dutch banks are now offering mortgages for properties in other countries within the euro zone. However it seems that they will also be able to arrange a mortgage in the UK if we want it.

Re: mortgages on return to Uk
 

Why would is get me into trouble its only my opinion, everyone knows renting is basically chucking money down the drain and as I said if you can get a property at a good price surely its a better option:confused:

Re: mortgages on return to Uk
 

This is also unfortunately true if one buys a house at a time that property prices are falling. Some respected forecasters expect falls of 30% or more in the UK over the coming few years. That equates to a LOT of money. Over the last few years property has been a one way bet in most countries so that it was much better to buy. I think that time has now passed and for the coming 5 to 10 years it may well be much cheaper to rent as there will be little if any capital appreciation (and more likely a serious loss of value).

For me the argument to buy is more a question of wanting to have somewhere that is ours; where we can change things as we want. Also, in the UK at least I am put off the idea of renting long term by the fact that it is very difficult to have security of tenure. Tenants rights are very poor in comparison with most European countries.

When we move back to the UK we will probably rent for 6months to a year in order to get our bearings. However after that we will want our own home even if from a financial point of view it is rather costly!

Rumpole

Re: mortgages on return to Uk
 

I strongly agree renting sucks. I am a homeowner, landlord and tenant (as we currently work away from home) and while it serves a purpose, being a tenant definately get's the :thumbdown: both from an emotional point of view and financial.

Re: mortgages on return to Uk
 

You also have to bear in mind what you'd do with any extra money. If it exists.

Let's say you buy a house for 200,000 (currency doesn't matter) and pay 1000 a month mortgage. I'm not trying to make the numbers make sense. :lol:

Or you could rent something similar for 1000.

After 5 years, you've spent 60,000 either way, but if you bought, you've got a bit of a house, even if the house is now worth 150,000. (There's a lot of extra costs in owning a house, though.)

If you rented, you've got nothing, but you had a deposit, yes? 20,000? If you'd invested that at 5%, you'd have about 1000 a year coming in and the compound interest thing going.

So you could end up with more money to spend after 5 years as a renter. And houses are now a lot cheaper.....

This is multiplied if you have a chunk of money to put into a house, having sold another.

Course, getting 5% might be tricky, but even though owning our home is something most of us want, on a strict financial basis it might not make sense in a falling market. Sometimes it's not all about the money, though, is it?

Bev

Re: mortgages on return to Uk
 

Anyone who thinks renting is dead money in the current environment is sadly deluded.

Scenario 1:

Lets say you bought a house for £200k, 12 months ago and put down £20K as a deposit. Today you could buy the same property for £180K.

Not only has your £20K deposit gone down the drain, you are also paying £1200 per month in mortgage costs, which on a repayment mortgage has probably only reduced the amount outstanding in year 1 by £100.

So at the end of year 1, if you sell your property, you will have spent:

(-£1200*12)+£100= £14300

Scenario 2:

Instead you rent and rent the same property as above but for far less than £800 per month (YES it is cheaper to rent the same property than to buy)

You put £20000 in the bank for 1 year, which after tax, yields £1000.


So at the end of 1 year you have: £20000+£1000-(£800*12)=£11400

YOU WOULD BE £25,700 WORSE OFF, BUYING INSTEAD OF RENTING!!

Now please tell us again why renting is dead money?:p

Re: mortgages on return to Uk
 

Yes, but this is all hindsight. Anyone can make money if you know in advance which way the markets are going to go.

Re: mortgages on return to Uk
 

Reread my post. It's not about making money..its about not losing money.

Its all in the maths. If you can do simple maths, you can save yourself a fortune.

Re: mortgages on return to Uk
 

Renting is dead money to me, the best part about buying a property is, you can hang what you like on the wall, you can landscape the garden how you want it, paint the walls etc, can not do this in rented and why would you want to improve a rented property:p unfortunately I will have to go down the renting route initially, but soon as in a position will buy, homes are not always about making money you win some you lose, I think its a shame people dont buy homes for just living in:thumbsup:

Re: mortgages on return to Uk
 

True but it has been recognised for several years that the British housing market is a bubble (as is the case in a number of other places such as the USA, Australia, Spain, Ireland). Many people have invested in property simply because they expected value to go up, not because of its intrinsic worth. Hence in the UK buy-to-let (BTL) has been a popular speculation the past few years, even though in many case the mortgage by no means covers the rental income. The only justification for such an "investment" is the hope that it can be sold on to a greater fool.

The expectation in the UK is that property may need to decline by at least 30-40% before it will become affortable when compared to other measures such as rental costs and salaries. Given that markets generally overshoot both on the way up and the way down it is quite likely that the eventual drop in value will be considerably more than this. Of course it will take several years for this to happen and during this time it makes no sense to treat property as a sound investment. However we all need somewhere to live and buying a house may be a better option than renting in terms of quality of life etc.

There will of course come a time when property in the UK will again be worth investing in but that may be many years away. In Japan where property prices collapsed in the early 90's prices are only now starting to show a small recovery but it will be many years more before they get back to the prices of the last boom.

Re: mortgages on return to Uk
 

My point exactly. Just realise that a mortgage is also "dead money". The very word mortgage alludes to this as it derives from MORT (=death) + GAGE (=pledge).

Re: mortgages on return to Uk
 

Agree with everything you say. It seems as though some people want a financial noose around their necks if it means they can paint their walls or do up their garden.

What these people don't realise is that they would STILL be in a better position if they paid to do up their rented accomodation, than to pay all of the mortgage expenses in a depreciating asset.

Re: mortgages on return to Uk
 

Hi Pearly

Just came across your post on mortgages and jobs in the UK. I am a nurse and my husband and I returned to Huddersfield in March of this year after 5 years in Australia. I saw that you were hoping to get telephone interviews for posts in the UK. I would recommend that you push for that if you can, because the whole process takes so long here, even when they are desperate for staff. I applied for a job that was advertised on the 8 May and closed on the 2 June. I was interviewed on the 25 June and verbally offered a job on the 30 June. However, with much pushing from me it took until yesterday to get a written job offer. HR said they were having trouble getting references from Australia! This process has taken over 10 weeks so far. I have completed the CRB form which I received yesterday and will hopefully take that to the HR Dept tomorrow, but who knows how long I will have to wait before they allow me to start work.

So if you can get ahead with a job offer whilst in Australia that would be great. We were in a good position, in that we could buy a house on our return, but imagine if we hadn't been in that position. Taking weeks to get an income to pay for rent, food, bills etc.

Kathryn