How to Buy Property in the UK
Overseas property is now considered a very attractive investment class when the right location and property is chosen, and UK is regarded as one of the most sensible and rewarding places to invest.
The UK offers numerous densely populated cities where demand outstrips supply creating an environment where investors are able to achieve impressive yields and capital gains underpinned by a degree of certainty that they will be able to let their property.
The variety of different properties, developments and geographic characteristics means that there are property investment solutions to meet the requirements and objectives of most investors.
Property prices can vary wildly depending on the location. For example, property costs in London are higher because of it’s popularity and the huge demand for people to own houses and live there. For many investors, other popular cities such as Manchester, Liverpool, Birmingham, Bristol and Edinburgh, or even the commuter belt around main cities offer accessible opportunities with strong returns . These cities provide economic development, lifestyle, infrastructure and transportation to appeal to a diverse range of demographics.
How to buy
When buying from abroad, it’s advisable to do your research and due diligence, while utilising the services of an expert to ensure a potential property meets your investment needs and that you realise value for money. When you are certain of your option, you can put in an offer to the vendor or selling agent, and you should be aware that the offer can be any amount you feel the property is worth and need not be the asking price.
There is no guarantee that your offer will be accepted as you may be bidding against others for the property. It is currently a competitive environment for UK property and vendors are likely to favour buyers who are in a stronger position and offer more certainty and speed.
Buyers who have no ‘chain’ (who don’t have to sell their own property to fund the new purchase) or cash buyers (who don’t have to secure financing) are likely to be very attractive to vendors.
Many property investors will fall in to one of these two categories and therefore be favourable to vendors.
Once your offer is accepted, you will need to instruct and pay for a solicitor and arrange an official survey of the property to ensure it’s condition and market value.
At this stage, there is no penalty for pulling out of the purchase if you don’t wish to proceed. Until contracts have been exchanged, you can pull out at any point. Although the vendor also has the same option, and can pull out if they don’t wish to sell, or if another buyer offers more money. If the purchase doesn’t proceed, you will lose all the fees that you have already paid.
Your solicitor will be responsible for making searches on, and about the property as well as all contractual issues. Once the contract is finalised, the buyer and seller can exchange contracts.
At this stage, the deal is confirmed and neither party can back out. The final stage after exchange of contracts is completion, at which point you will now own the property and can move in, make improvements or let the property.
Even though there are no legal restrictions in purchasing property in the UK, it is advisable to clarify your situation a tax advisor before you hire a solicitor.
There are various taxes that should be paid, even as a foreigner, such as stamp duty, capital gains tax on sale, and income tax on any rental income.
The specialist tax advisor will be able to assist you in this. They may also be able to provide advice on the most efficient way to hold and own property
If you are not paying for the property in cash, there are mortgage alternatives to be considered for overseas buyers or expats.
Both sterling and foreign currency mortgages are available to non-residents, and rates can vary, while the exchange rate could make your payments more favourable.
Each individual lender will have it’s own range of criteria for non-resident or buy to let mortgages, and your financing may be dependent on Age, Affordability, Rental income, personal finances.
The options, rates and lending criteria can vary across different lenders, so it’s best to consult a professional to assess the most suitable option for your circumstances.
For more information about financing, sourcing property, guidance on locations to purchase click here to hear from an expert.