How To Buy Property In The UK

How To Buy Property In The UK

​Overseas property is a commodity now and if there is one country where buying such property is an adventure, it's the UK.

From modern condominiums to old manors and period homes, the UK has a wealth of property types waiting to be seen, bought and lived in.

With such an eclectic range of homes to choose from, you can potentially find your dream house somewhere in the UK.

However, property prices vary on the locations. For example, property costs in London are higher because it is a popular and well-connected city.

Other popular cities are Manchester, Bristol and Edinburgh.  Infrastructure and transportation are well integrated in these locations which are some of the reasons why property prices are higher there.

Therefore, you will need to determine beforehand if your budget meets the location.

How to buy
As a foreigner, it is advisable to look at a house twice before you decide to negotiate for a deal. Once you decide if the property is what you are looking for, you can then put in an offer.

The offer can be any amount you feel the property is worth and need not be the asking price.

Be aware that there is no guarantee your offer will be accepted as you may be bidding for the property alongside others.

The buyer should also be wary of any last minute outbids. This is considered gazumping and there are no laws protecting the buyer from it, except for in Scotland.

However, the sellers consider two other things than just price before making their decision.

1. Chain: This means you have a UK property you intend to sell to fund your new purchase. Being in a chain lowers your chances drastically.

2. Cash buyer: You can pay immediately as you are not reliant on a mortgage.

If you are a cash buyer and are not ‘chaining' properties, you stand a higher chance of a successful bid over others.

Should your offer be accepted, you will now need to hire an estate agent, solicitor and sanction an official survey of the property.

These costs will be borne by you.

If the survey results are not to your liking or if you have simply changed your mind, you can rescind your interest in the property with no penalty.

As long as the contracts have not been exchanged, you can pull out of the purchase at any point.

However, the owner is also at liberty to pull his property out of the sale or switch buyers if someone outbids. If this happens, you will lose all money you have already spent in hiring a solicitor and having the survey done.

During the survey period, your solicitor will make searches on and about the property on your behalf. The solicitor will also iron out all contractual problems with the seller's lawyer.

After the contract is finalized, you can exchange contracts.

Once contracts are exchanged, the deal is official and neither party can back out.

The purchase will be completed roughly within seven days, after which, you can move in.

Legality
Even though there are no legal restrictions in purchasing property in the UK, it is advisable to verify with a tax advisor before you hire a solicitor.

This is because you, as a foreigner, may be expected to pay stamp duty and capital gains tax. Income tax is a necessity should you receive any rental income.

The specialist tax advisor will be able to assist you in this. They will also advise you on the best type of survey to commission and the costs involved.

Finance

If you are not paying full in cash, there are mortgage alternatives you can consider.

Sterling mortgages are available to non-residents although the rates you receive may be less favourable compared to a UK buyer who is borrowing.

You will need to fulfil a range of criteria to be eligible for non-resident mortgages however.

These criteria are;
• Age: The loan will run for 25 years or until you reach your retirement age
• Affordability: your existing finances and if you are able to afford the property
• Rental income: How much you are expecting to charge for rental should you choose to lease
• Finances: If you are self-employed, you must provide minimum 3 years of your income

Most loans available to foreigners also require a 35% deposit. However, you should be able to opt for a traditional residential mortgage or a buy-to-let loan.

If neither of these mortgages is available, you should still be able to choose between a fixed rate loan and a base rate tracker.

Consult your solicitor or estate agent on the best loans available and consider all your options carefully.

sources:  globalpropertyguide.com, home.co.uk