Scrivo spesso su Quora.com, dove sono lo scrittore più visto in materia finanziaria, con oltre 267,5 milioni di visualizzazioni negli ultimi anni.
Nelle risposte che seguono mi sono concentrato sui seguenti argomenti e problemi:
- How can I get an international mortgage in the UK?
- What are the pros and cons of buying an apartment in Dubai, as an expat?
- What do you think will be the end game for the current cost of living crisis?
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How can I get an international mortgage in the UK?
It is not as complicated as you might think.
The UK makes getting mortgages for non-residents reasonably easy, although it does depend on:
- The lender
- Your location and how high-risk you are in general. Working for the UN in, say Laos, isn’t the same as being self-employed.
- Very occasionally, your nationality if you are from a sanctioned country.
I have helped clients from all kinds of countries get them, and it isn’t usually difficult, provided regular anti-money laundering (AML) and know your client (KNY) documents can be provided.
Many lenders increase the interest rates compared to domestic UK mortgages due to the higher perceived (or actual) risk.
All you need to do is approach a mortgage lender or investment brokerage which does expat mortgages. They will explain the process, which is associated with the AML and KYC documents.
The broader question is whether you should get a UK mortgage as a non-resident, including for UK expats vivere all'estero.
The positives are:
- The UK has a long history of respecting property rights.
- The political system hasn’t collapsed for a long time in the country either.
- The Pound is low. Priced in USD, the average UK house price is lower than in 2007
- You can get up to 70%-75% mortgages from some lenders, meaning you can sometimes put down as little as $50,000-$75,000 as a deposit.
- Rental yields in some parts of the north and midlands can be good
- You can use leverage/debt to your advantage
- It is an uncorrelated asset to the stock markets, meaning it can go up when stocks are down and vice versa.
The negatives are:
- Even though the UK has historically been stable, and still is on many measures, the political situation is becoming more extreme. There is a bigger chance of more extreme policies coming about in the years ahead. A windfall tax on landlords? Seemed unlikely before. Now, who knows?
- It isn’t likely that UK property will beat the best performing stock market indexes, such as the S&P500, long-term.
- If you are a non-resident, you will need somebody to look after the property. If you don’t do that, that is a significant time drag.
If you are using the property as diversification only, it can work out, or if you are a professional real estate investor.
I wouldn’t put most of your assets into the UK property market as a non-resident unless you are a professional real estate investor, which applies to less than 1% of people.
What are the pros and cons of buying an apartment in Dubai, as an expat?
Things have improved since some people commented on this answer many years ago.
There are now clearer rules for expats and non-residents to buy a property. You don’t need a UAE visa to continue holding the property.
The only three major positives about buying in the UAE are:
- You can “kill two birds with one stone”, if you want to live in the UAE on a golden visa. Changing your residency is a good way to reduce taxes in some situations, and a golden visa via a real estate purchase is one way to do that
- As renting is expensive compared to buying, you will do OK if you use it as only a home. Even if your property goes down by 20% over 5-10 years, you might still save money compared to renting.
- As it is a volatile market, sometimes prices become very low and depressed, like in 2020
The major negative is that prices don’t always rise long-term. Many in the UAE expect real estate prices to go down, and the heat + humidity causes many costs.
I know several people who bought in 2006, 2008 and 2010 who have yet to break even on the investment.
I have lost count of the number of clients and associates who have lost in that particular market.
The graph below says it all:
Therefore, you can’t expect that UAE property will keep pace with UK or US real estate, nor other assets like stocks, long-term.
What do you think will be the end game for the current cost of living crisis?
I am not sure the endgame will be any different to previous inflationary episodes.
Things like this have happened many times historically and the result is usually the same:
- Higher interest rates bring about a recession (sometimes mild and other times severe) but reduces inflation.
- The time it takes inflation to fall depends on factors such as if there is a wage-price spiral. In other words, people demand higher wages due to rising costs, and the whole thing keeps going for longer
- There is social unrest and political upheaval in some countries, like we have seen historically and in Sri Lanka today
- Politics becomes more extreme, with demands for more assertive measures. Those assertive measures, “help” and welfare, in turn, could fuel further inflation.
This isn’t unprecedented, it is just that many of us are too young to remember previous bouts of high inflation. Anybody below 35 or 40 probably can’t, if not older, in the Western world at least.
Nobody knows the outcome this time, as to how long it will last. We are already seeing oil prices fall due to weaker demand.
The big danger is that a lot of inflation in the early-mid part of 2023 is already priced in, because firms are not passing on the costs to consumers.
I saw this on LinkedIn a few days ago from CEO James Watts. You can see the full post here – https://www.linkedin.com/feed/update/urn:li:activity:6960531883411546112/
“The official numbers tell us inflation is almost 10% in the UK, and this is highest it has been in 40 years. Unfortunately, this is nothing like the full picture.
It costs us 25% more to make a case of Punk IPA today than it did in 2021 and our input cost prices continue to rise rapidly. We have seen huge increases in the prices of electricity, gas, transport logistics, wages, malted barley, hops and our packaging materials like aluminium and cardboard. Furthermore, if we were to increase our prices to retailers by 25%, our beer would end up costing 38% more on shelf in store.
Our beer has always been incredibly expensive to make versus the mainstream beers. We brew our beer with almost 40 times more hops than the average lager and we also don’t use any cost saving substitutes. All of our beers are carbon negative which also adds to our cost base. We are fully committed to making the best beers we possibly can and we are also fully committed to doing all we can from a sustainability perspective. But doing both of these things is now more expensive than ever.
Manufacturers and retailers can live with taking less margin over the very short term, but this comes out in the wash in the medium term. Though revenues were up strongly last year, the continued investments we are making into the business and our people means we still reported a small operating loss – we don’t have huge margins we can eat into to help us through this economic storm.
Businesses are faced with 2 devastatingly difficult options at the moment: either pass on huge price increases at a time when consumers have less money to spend or make an inferior or smaller product and charge the price they were previously charging for the real deal. Both options are grim for consumers and for our economy.
We would never compromise on the quality of our beer and we want to do all we can to manage our prices and offer great value to our customers but unfortunately our beers are going to become a little more expensive. The only other option would be to compromise on the quality of our beers or our commitment to sustainability which we simply will not do.
The government is telling us inflation is 9.4%. In fact, it’s far higher than that and it is only a matter of time before the official numbers catch up to capture the brutal reality that so many business are facing.
We are a strong business. We will manage our way through this new challenge. But make no mistake, this crisis has the potential to destroy more businesses than the pandemic, crippling the UK economy over the medium to long term.
With the UK facing the slowest growth rate of any of the world’s developed economies it is clear the government needs to do more to help UK businesses. Instead of this squabbling between the leadership candidates and their supporters, how about they all start addressing the real issues? They are wasting time, when action is needed now”.
Regardless of that immediate risk, together with the wage:spiral spiral issue that could happen, it is unlikely the current situation will last for that much longer.
A recession or at least weak growth will almost for sure reduce inflation, unless another war drags on commodity prices.
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Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.
