Meet the Dubai-based expat who is capitalizing on the weak pound to build his UK property portfolio

Dubai-based Saif Mir is among a class of investors looking to buy property in the UK when the pound is weak.

The pound has fallen against the dollar for most of the past year and recently fell to an 18-month low on fears of slow growth and the growing risk of a recession in the UK.

The schoolteacher is experienced in the market and already owns more than a dozen rental houses in the UK.

He sees now as a good time to add to his portfolio, as each dirham he returns is worth more due to the weak pound.

And he’s not alone, with many other UAE-based Britons looking for ways to take advantage of the favorable exchange rate.

The opportunity was so tempting for Mr Mir, 33, who is saving to buy land and build on it, that he recently took out a loan in the UAE to send back a larger lump sum.

“I borrowed the money to roll it back just because the rate is so good,” said Mr Mir, from West Yorkshire, where all his properties are.

“I can pay it back out of my salary at a fairly low interest rate, whereas when rates go up it diminishes the value of our money.

“If you look at it from that perspective, it can be a significant margin.”

These margins will need to be achieved despite significant economic headwinds. Inflation is on the rise and the Bank of England recently announced a fourth consecutive interest rate hike in an effort to control prices.

Many families are already struggling. And it is predicted that there will be more difficulties to come.

Mr. Mir is putting preparations in place to ensure his growing portfolio is able to weather a financial storm. But for now, the opportunities present themselves.

Build a portfolio

Mr. Mir began buying property in 2016, following in the footsteps of some of his family members back home.

“The problem was that with a property you need money, you need deposits,” said Mr Mir, who recently became a father.

“You need start-up capital, especially when it comes to buying properties and renovating them.

“I started in 2016 but didn’t get very far. I had only bought a few before I started running out of money.

He saw a move to Dubai as a way to change that, settling there two years later in 2018 for sunshine, a generous housing allowance and, most importantly, the tax-free salary.

He started learning as much as he could about real estate investing, reading books and taking online classes in the evenings and on weekends.

“Now I have a portfolio that is worth well into seven figures,” said Mr Mir, who posts advice and videos of his properties on his Instagram account.

He is also preparing a course for the other residents to share everything he has learned.

Mr. Mir typically focuses on two-bed townhouses in need of renovation.

Before buying, he does financial stress testing to make sure they can absorb interest rates of up to 6% and still provide a return.

Most of the properties he owns have already increased significantly in value. And it collects more rent, thanks to rising rents. All properties are rented.

“When we make a property available for rent, we get around 17 inquiries per property in the first two days,” he said.

The outlook for the UK economy may not be good, but he is not put off.

It just means there are more opportunities out there.

“Because most people don’t have as much disposable income as we do as investors. We’re looking for opportunities where we can add value, something that’s run down, something that needs £20,000 or £30,000 of spending to bring it back to life, increase the value and get the deposit back.

“Because our way of doing it is to buy the property, we add value to it and then refinance it at the new value. And that allows you to borrow at the increased value and free up as much of the funds as possible in which you originally invested.

He is currently switching all of his properties to five-year fixed rates to protect against further interest rate hikes.

If the UK fell into recession, it would seek to reduce the rent of its tenants if they needed this help. That way he would still absorb something. But he also has rental guarantee insurance policies in place if all else fails.

“Anything can happen, you just have to be prepared for every eventuality,” he said.

Mr Mir has largely benefited from rising UK house prices and rents and the weaker pound. And it may even come out of a recession comfortably, at least for a while.

Taking advantage of the weak pound sterling

If an expat in the UAE was already looking to invest in property in the UK, now is the right time.

“It’s always the big picture. You should never do anything because of a currency movement,” said Keren Bobker, columnist at The National who is an independent financial adviser and senior partner at Holborn Assets in Dubai.

“It could come back the other way and by the time you buy something it will have changed anyway.”

Steve Cronin, founder of DeadSimpleSaving.comsaid buying a property to take advantage of a favorable exchange rate is “classic market timing.”

“Especially if you’re going to buy something that takes a long time to invest in, like a property.

“You should only buy UK property if you believe in the fundamentals of the UK property market. Or you need UK property,” he added.

UK expats looking to take advantage of the favorable rate can, however, take advantage of it by transferring their money, if that is where they intend to retire.

“A lot of them held their dollar money overseas, because that’s the advice I gave them, and they waited a while to send the money in sterling,” Ms. Bobker.

“And that’s what they do to take advantage of the exchange rate.

“If your goal is to eventually return to the UK, it makes sense to have your money in sterling.”

Updated: May 24, 2022, 08:17

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