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Real Estate Guides

Buying Property in the UK: A Guide for Foreigners

Updated: 20 October 2022

The United Kingdom is a popular destination among expats. High quality of life, excellent education, a stable economy, an abundance of job opportunities, and cultural diversity are only a few of the many factors that bring forth this great popularity. 

For those who plan to stay in the UK for a long time without moving around, buying a house may be a convenient option because mortgages exhibit low-interest rates in the UK over the past few years. However, buying property in the UK can be challenging because high demand results in high prices and immense competition in the real estate scene. 

If you are planning to buy a house in the UK, note that it is really useful to make your research ahead. In this article, we elaborate on the subject to provide you with the essential information in a brief but comprehensive manner. 

This guide includes:

…and a lot more!

Buying a Home in the UK as a Foreigner

In the UK, there are no limitations on foreigners purchasing a property. In the UK, non-citizens and foreigners can also obtain a mortgage. Those who have been in the UK for less than two years and are unemployed, on the other hand, may have to meet more stringent requirements and pay a bigger deposit. When purchasing a home in the UK, we strongly recommend you work with a solicitor based in the UK to handle the legal documentation. 

Types of Homes in the UK

Residential houses come in a wide variety of styles throughout the United Kingdom. But not all of them might be appropriate for your particular needs. Let’s have a look at the most popular types as well as the unique qualities of each. 

Detached Houses

Detached homes don’t share any walls with other buildings, as the name suggests. They frequently have gardens in both the front and back yards. These units are frequently the best options for those who have children because they tend to offer more privacy than other types.

Semi-Detached Houses

As the name implies, the only significant distinction between a detached home and a semi-detached house is that the latter shares at least one wall with an already-existing, separately-owned building. In addition to saving a lot of room, these variations are also significantly less expensive than fully detached homes.

Terraced Houses

In the UK, these are some of the most recognizable and famous dwelling forms. Terraced homes are joined by a single wall on either side, creating a street-wide “row” of buildings. The biggest benefit, in this case, is how much space is saved during construction. They are therefore very common in urban areas where land is in high demand. Because these homes occasionally lack front or rear gardens, their prices are also a little lower.

Flats

Flats are the most well-known type of accommodation in the United Kingdom. Flats are known for their ability to save space and are typically offered as a series within a single building. These structures can be purchased or hired on a contract basis. Flats are ideal for singles or small families because they are typically more affordable than detached or semi-detached houses.

Cottages 

These traditional housing forms are common in the UK’s more rural areas, and some of them date back hundreds of years. Cottages are renowned for their robust design, substantial walls, and traditional ambiance. They can have one or two stories, and most have access to sizable gardens. Due to their ease of seasonal rental, cottages are frequently used as vacation residences.

Mansions 

Mansions and historic houses are by far the most luxurious options in the UK, especially for those who can afford such investments. Some of these buildings date back hundreds of years and are renowned for their size and extensive histories. Some are also designated as historical sites of interest, making it difficult or impossible to add additional structures or get planning approval.

Steps of Buying a House in the UK

Buying a home in a foreign country can be intimidating. Here are the steps to buying a property in the UK:

  • Calculating moving costs and reviewing mortgage options and loans
  • Finding the right property for you
  • Viewing and making an offer
  • Finding a solicitor and bringing the sale process to an agreement
  • House surveying and detailing the characteristics of the property
  • Finalization of the mortgage process
  • Arranging the relevant insurance
  • Signing and exchanging the contracts 
  • Finalizing the moving process

Tips for the Preparation Process 

The most crucial thing to do while buying property in the UK is to plan. If you are buying a house abroad, it is useful to be extra careful and strategize the investment thoroughly before starting to seek property. To avoid paying more than you should or getting stuck in a deal, make sure you evaluated many possibilities. It is always a relief to have a plan B in case there is a complication.

Calculating your budget correctly plays an immense role in buying property in the UK, for miscalculations can give you a thin time afterward.

If you are about to buy a property in the UK, to avoid such mistakes and making a malinvestment, in the end, it is best to get help from professionals such as a real estate agent, a lender, and an attorney.

In addition to the abovementioned points to be taken into account, a house inspection to assess the safety and the condition of the property is of prime importance before making a purchase. Hence, it makes sense to include a house inspector in your team of experts. A good team combined with thorough research will increase your chances to make a solid investment and a safe, beautiful home for yourself. 

Seeking the Best Suitable Property in the UK

Thorough online research before the house hunting and purchasing process will help shorten the process of buying property in the UK, for sure. After doing your research and deciding on your needs, establishing your budget, and selecting the proper area for you, it is time to look for the right property. 

To decide on the most suitable area for you, you can make a list of the facilities you need to have nearby such as schools, hospitals, etc., or consider factors like tranquility or vividness, location, diversity and network, and proximity to transportation. 

Another thing to consider at this point is that you have two options as you buy a house in the UK: leasehold or freehold. At first, you only own the property and not the land it sits on whereas in the latter you own both, hence your responsibilities vary as well, depending on the ownership type.

The property in the UK is usually listed by real estate agents on their websites. Other channels you can reach real estate adverts are newspapers and online real estate websites. Conducting a thorough check on these online channels beforehand will give you a head start in the search for the property that matches your needs. 

Another option you can try to find and buy a house in the UK is strolling around, keeping an eye out for “For Sale” signboards. There are also house auctions that you can attend to place a bid on houses. 

All these channels eventually connect you with a real estate agent. Getting in touch with an agent will provide you with the chance to get to know the local processes better, as well as offer you a wider set of property options. Moreover, it is easier to negotiate with sellers with the mediation provided by an estate agent. Sellers are responsible for paying the agents’ fees, hence, there is not much to worry about that for the buyer. What is even better is that real estate agents can provide you with services such as the arrangement of mortgages or solicitors. Therefore, working with one relieves you from the burden of the process to buy a property in the UK.

Financial Aspect of Buying Property in the UK 

Mortgage brokers and banks provide financial aid in case you need a loan to make a real estate investment in the United Kingdom. Foreigners can benefit from these services, as well. 

Although the process is a little complicated, mortgage offers are incentive and diverse because it is excessively common to buy a house in the UK. Most mortgage payment durations last about 25 years but they can change as to what type of mortgage you have opted for. 

Buying Property in the UK: Costs 

The total cost of buying a home in the UK might increase by more than 10 percent due to several additional expenses that go above and beyond the price of your new home. Continue reading to learn about all the expenses you’ll have to plan for while purchasing and maintaining a home in the UK.

1. Stamp duty: All real estate purchases over £125,000 are subject to this tax, which ranges from 2 to 12%

2. Deposit: You will be required to pay a deposit toward expenditures if you obtain a UK mortgage to purchase a home in the UK, which typically varies between 5 and 40% of the price of the property

3. Mortgage expenses: There are several costs involved with taking out a mortgage to purchase a home, including arrangement fees, booking fees, and valuation fees.

4. Legal fees: Whether you obtain a mortgage or not, you will need to hire a solicitor or conveyancer to work on your behalf. 

5. Fees for land registry: To transfer the property’s legal deeds to you, the new owner, land registry fees must be paid.

These are the general costs that you’ll need to deal with when buying property in the UK. You’ll also be liable to pay property taxes. For further information, check out our UK Property Taxes for Non-Residents article.

Purchasing Process 

The actual purchasing process starts with you making the offer as the buyer. You can place your offer directly to the seller in person or via the estate agent. If the seller accepts your offer, they initiate the process of ownership transference. 

When buying a house in England, Northern Ireland, or Wales, the course of the purchase proceeds as mentioned above and the solicitor can be hired upon the settlement of the offer. Hence, the offer does not legally bind either party before the contracts are eventually exchanged. However, in Scotland, the presence of a solicitor is required to mediate between both parties regarding the offer.

Upon the completion of these steps, it is time to carry out a house survey. This can be done either by your loaner or you can outsource it as an additional service. A basic survey costs about £250 whereas a detailed survey that also provides a valuation costs over £400. However, if you are buying an old house that requires further inspection, a survey that includes the building or the structure will probably cost you £600 or more. If the survey you got conducted demonstrates problems, the price can be negotiated over again. If you settle on a new offer, it is time to pay a deposit and move on to finalizing the mortgage. 

Following these steps, the ownership transference comes to an end with the signing and exchanging of the contracts and the transference of the relevant money through solicitors’ accounts. 

Making a Home Out of a House 

You got the keys to the house in the previous step: now, there are only a few things to be done before the house is a home.

The first thing to do at this point is to get your insurance done. There are a few types of insurance that cover the house, both the house and other possessions, or insurances that cover all the contents of the building, including itself.

The second thing to be done is to get your utilities operating. You can choose your internet and electricity provider by making a comparison online. Once you choose the best suitable ones for you, you can move on to other secondary utilities such as the TV, landline, etc. 

After completing all these steps, it is time to move in and make the house you have purchased a home.

Conclusion

If you are buying property in London or anywhere in the UK solely for investment purposes or contemplating living there for a while and then relocating, note that the selling process is very easy once you have completed paying back your loans and mortgage. If you are still in the repayment process, however, you may need to cover additional expenses or losses deriving from the mortgage or the loan. If not, there is a rapid real estate market in the UK, you will reap the rewards of your investment in no time. 

Speak to a Real Estate Professional in the UK

Get Golden Visa is a bespoke investment advisory firm. Since 2014, we’ve provided more than 20,000 prospective real estate investors with advice. Contact us today and talk to our independent real estate advisors to help you with your property search in the UK.

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    FAQ

    Can foreigners buy real estate in the UK?

    Yes, whether you’re an American, an EU resident, or another non-UK resident, you can buy a house in the UK. Buying a home in the UK as a cash buyer, on the other hand, is less challenging because obtaining a UK mortgage may be tough.

    Can I get British citizenship if I buy a property there?

    No, the UK doesn’t grant citizenship in exchange for an investment.

    Can EU citizens acquire property in the UK?

    Yes, they can. EU citizens are free to make a property purchase in the UK, even after Brexit.

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