Advantages of buying UK property
Real estate in the United Kingdom signifies reliability and stability because the country is known for its economic prosperity. UK properties are expensive, and they constantly grow in value. If you want to make a secure and profitable investment, purchasing a UK property could be a good idea.
Apart from the opportunity to rent out and re-sell your UK property at a higher price, purchasing British real estate can be attractive for several other reasons. For example, foreign nationals are allowed to buy any property they like, from a family flat to a large period mansion in a prestigious London borough. British taxation system also offers a major advantage since there is no annual property tax per se; it means your post-acquisition costs are lower.
This explains why people of all ages consider investing in UK properties, from young people who want to study in prestigious British universities and build their careers in a country with a stable economy to wealthy retired people who seek comfort and safety.
Imperial & Legal practises a holistic approach offering full support from searching to purchasing a UK property. Our experts will act in your best interests; they will find the most suitable property based on your needs, and help you sign the deal and optimise the costs. If required, our immigration advisors will help you obtain UK visas and resolve all related relocation issues.
Peculiarities of purchasing UK property
Before you buy a UK residential or commercial property, you need to look into the legal side of the purchase and ownership. Title to a property does not automatically lead to an Indefinite Leave to Remain (ILR), citizenship, or benefits; however, it provides governmental protection the same way as for a British national.
The seller is not liable for any defect or damage found after the purchase. That’s why, it’s so important to ask for professional advice and help. Experts will evaluate the property and make sure everything is in order before you buy it. It will save you from unexpected costs in the future.
If you decided to purchase a property in London or any other major city in the UK, it is not just the purchase price you need to think about, but also potential taxes and expenses. In some cases, additional costs can make up to 20% of the purchase price.
All you need to know about buying a property in the UK
Valuable insight into real estate deals in the United Kingdom
Taxes on UK property and other costs
You should not forget that the purchase price is not the only payment you must pay. There are many other payments you need to bear in mind when buying a UK property. For more information, continue reading this article.
Stamp duty land tax
Any type of UK property (land, a flat, or a house) is taxable with a Stamp Duty Land tax (SDLT). The tax rate depends on the following factors:
- Buyer’s nationality: non-UK residents have to pay more from 1 April 2021.
- Property location: there are different tax rates and criteria for England and Northern Ireland, Scotland, and Wales.
- Property value: the lower the value, the lower the tax rate.
- Buyer’s ownership in the UK: whether it is their first UK property.
Average values
Average residential property values in inner London
| District | Studio flat (£) | 1 bedroom apartment (£) | 2 bedroom apartment or house (£) | 3 bedroom apartment or house (£) | 4 bedroom apartment or house (£) |
| Camden | 435 000 | 534 000 | 965 000 | 1 741 000 | 2 252 000 |
| City of London | 585 000 | 820 000 | 1 463 000 | 3 387 000 | 3 309 000 |
| Hackney | 421 000 | 434 000 | 562 500 | 882 500 | 1 225 000 |
| Hammersmith and Fulham | 324 000 | 537 000 | 782 000 | 1 452 000 | 1 675 000 |
| Haringey | 274 000 | 362 000 | 567 000 | 773 000 | 1 017 000 |
| Islington | 303 000 | 567 000 | 825 000 | 1 128 000 | 1 477 000 |
| Kensington and Chelsea | 417 000 | 790 000 | 1 334 000 | 2 518 000 | 3 608 000 |
| Lambeth | 389 000 | 397 000 | 722 000 | 826 000 | 1022 500 |
| Lewesham | 255 000 | 320 000 | 510 000 | 632 000 | 966 000 |
| Newham | 348 000 | 293 000 | 461 000 | 543 000 | 778 000 |
| Southwark | 384 000 | 498 000 | 770 000 | 923 000 | 1 198 000 |
| Tower Hamlets | 387 000 | 594 000 | 735 500 | 1 023 000 | 1 295 000 |
| Wandsworth | 328 000 | 570 000 | 682 000 | 1 195 000 | 1 437 000 |
| Westminster | 387 000 | 632 000 | 1 049 000 | 2 220 000 | 3 089 000 |
Average residential property values in outer London
| District | Studio flat (£) | 1 bedroom apartment (£) | 2 bedroom apartment or house (£) | 3 bedroom apartment or house (£) | 4 bedroom apartment or house (£) |
| Barking and Dagenham | 253 000 | 325 000 | 413 000 | 422 000 | 498 000 |
| Barnet | 210 000 | 340 000 | 479 000 | 647 000 | 1 135 000 |
| Bexley | 249 000 | 251 000 | 370 000 | 491 000 | 693 000 |
| Brent | 307 500 | 334 000 | 468 000 | 718 000 | 1 190 000 |
| Bromley | 188 000 | 247 500 | 420 000 | 589 000 | 903 000 |
| Croydon | 191 000 | 307 000 | 344 000 | 571 000 | 712 000 |
| Ealing | 344 000 | 410 000 | 554 500 | 698 000 | 1 124 000 |
| Enfield | 192 000 | 263 000 | 440 000 | 562 500 | 855 000 |
| Greenwich | 344 000 | 369 000 | 504 000 | 674 000 | 823 000 |
| Harrow | 245 000 | 311 000 | 472 500 | 598 000 | 1 008 000 |
| Havering | 208 000 | 229 000 | 327 500 | 442 000 | 704 000 |
| Hillingdon | 209 000 | 266 000 | 410 000 | 560 000 | 829 000 |
| Hounslow | 247 000 | 404 000 | 455 000 | 575 000 | 893 000 |
| Kingston upon Thames | 268 000 | 321 000 | 519 000 | 677 000 | 840 000 |
| Merton | 293 000 | 359 000 | 429 000 | 634 000 | 893 000 |
| Redbridge | 234 000 | 273 000 | 400 000 | 554 000 | 707 500 |
| Richmond upon Thames | 270 000 | 494 000 | 691 000 | 861 000 | 1 280 000 |
| Sutton | 240 000 | 270 000 | 361 000 | 552 000 | 729 000 |
| Waltham-Forest | 224 000 | 313 000 | 466 000 | 570 000 | 757 000 |
Intervals
Average residential property values in inner London
| District | Studio flat (£) | 1 bedroom apartment (£) | 2 bedroom apartment or house (£) | 3 bedroom apartment or house (£) | 4 bedroom apartment or house (£) |
| Camden | 265 000 – 800 000 | 270 000 – 875 000 | 550 000 – 1 750 000 | 600 000 – 4 250 000 | 1 350 000 – 5 250 000 |
| City of London | 360 000 – 850 000 | 475 000 – 1 150 000 | 650 000 – 3 335 000 | 900 000 – 9 500 000 | 975 000 – 9 900 000 |
| Hackney | 250 000 -698 000 | 285 000 – 750 000 | 400 000 – 850 000 | 600 000 – 1 850 000 | 595 000 – 2 450 000 |
| Hammersmith and Fulham | 195 000 – 505 000 | 435 000 – 820 000 | 440 000 -1 300 000 | 650 000 – 4 500 000 | 900 000 – 3 750 000 |
| Haringey | 167 000 – 350 000 | 230 000 – 525 000 | 265 000 – 825 000 | 475 000 – 1 400 000 | 530 000 – 1 600 000 |
| Islington | 190 000 – 450 000 | 300 000 – 883 000 | 400 000 – 1 400 000 | 650 000 – 2 000 000 | 750 000 – 3 500 000 |
| Kensington and Chelsea | 275 000 – 575 000 | 425 000 – 1 325 000 | 750 000 – 2 290 000 | 1 100 000 – 4 950 000 | 1 750 000 – 5 500 000 |
| Lambeth | 220 000 – 560 000 | 285 000 – 775 000 | 350 000 – 1 250 000 | 425 000 – 1 520 000 | 450 000 – 1 695 000 |
| Lewesham | 180 000 – 350 000 | 210 000 – 450 000 | 350 000 – 675 000 | 440 000 – 835 000 | 650 000 – 1 650 000 |
| Newham | 200 000 – 490 000 | 220 000 – 425 000 | 285 000 – 650 000 | 375 000 – 700 000 | 525 000 – 1 200 000 |
| Southwark | 220 000 – 575 000 | 335 000 – 925 000 | 400 000 – 1 250 000 | 595 000 – 1 350 000 | 750 000 – 1 850 000 |
| Tower Hamlets | 300 000 – 560 000 | 375 000 – 945 000 | 375 000 – 1 250 000 | 450 000 – 2 000 000 | 450 000 – 2 500 000 |
| Wandsworth | 230 000 – 675 000 | 375 000 – 810 000 | 440 000 – 995 000 | 650 000 – 2 065 000 | 900 000 – 2 080 000 |
| Westminster | 275 000 – 610 000 | 425 000 – 950 000 | 600 000 – 1 600 000 | 1 000 000 – 5 750 000 | 1 895 000 – 6 500 000 |
Average residential property values in outer London
| District | Studio flat (£) | 1 bedroom apartment (£) | 2 bedroom apartment or house (£) | 3 bedroom apartment or house (£) | 4 bedroom apartment or house (£) |
| Barking and Dagenham | 165 000 – 375 000 | 175 000 – 280 000 | 245 000 – 425 000 | 265 000 – 600 000 | 363 000 – 600 000 |
| Barnet | 150 000 – 290 000 | 200 000 – 529 000 | 325 000 – 650 000 | 375 000 – 965 000 | 795 000 – 1 850 000 |
| Bexley | 100 000 – 400 000 | 160 000 – 425 000 | 250 000 – 650 000 | 340 000 – 590 000 | 446 000 – 1 150 000 |
| Brent | 215 000 – 480 000 | 265 000 – 529 000 | 350 000 – 675 000 | 375 000 – 1 300 000 | 675 000 – 1 775 000 |
| Bromley | 160 000 – 250 000 | 180 000 – 385 000 | 280 000 – 645 000 | 325 000 – 995 000 | 700 000 – 1 900 000 |
| Croydon | 160 000 – 250 000 | 230 000 – 415 000 | 250 000 – 475 000 | 465 000 – 750 000 | 375 000 – 1 500 000 |
| Ealing | 195 000 – 525 000 | 210 000 – 538 000 | 330 000 -815 000 | 490 000 – 1 350 000 | 645 000 – 1 750 000 |
| Enfield | 150 000 – 225 000 | 165 000 – 485 000 | 260 000 – 650 000 | 400 000 – 760 000 | 575 000 – 1 200 000 |
| Greenwich | 230 000 – 429 000 | 190 000 – 550 000 | 280 000 – 750 000 | 450 000 – 1 350 000 | 480 000 – 1 500 000 |
| Harrow | 200 000 – 300 000 | 190 000 – 375 000 | 250 000 – 775 000 | 375 000 – 850 000 | 650 000 – 1 450 000 |
| Havering | 160 000 – 325 000 | 140 000 – 300 000 | 200 000 – 435 000 | 325 000 – 550 000 | 525 000 – 1 050 000 |
| Hillingdon | 160 000 – 260 000 | 195 000 – 325 000 | 290 000 – 500 000 | 400 000 – 700 000 | 575 000 – 1 195 000 |
| Hounslow | 175 000 – 420 000 | 225 000 – 635 000 | 300 000 – 695 000 | 400 000 – 795 000 | 525 000 – 1 550 000 |
| Kingston upon Thames | 230 000 – 325 000 | 270 000 – 430 000 | 275 000 – 695 000 | 450 000 – 900 000 | 575 000 – 1 425 000 |
| Merton | 200 000 – 425 000 | 230 000 – 650 000 | 250 000 – 595 000 | 430 000 – 1 150 000 | 495 000 – 1 595 000 |
| Redbridge | 165 000 – 397 000 | 210 000 – 400 000 | 265 000 – 500 000 | 350 000 – 750 000 | 500 000 – 1 000 000 |
| Richmond upon Thames | 160 000 – 440 000 | 340 000 – 795 000 | 475 000 – 1 250 000 | 500 000 – 1 350 000 | 625 000 – 1 750 000 |
| Sutton | 185 000 – 375 000 | 210 000 – 315 000 | 175 000 – 475 000 | 350 000 – 700 000 | 595 000 – 875 000 |
| Waltham-Forest | 150 000 – 325 000 | 182 000 – 600 000 | 300 000 – 700 000 | 413 000 – 875 000 | 550 000 – 1 000 000 |
If you’re buying your first home, you don’t have to pay any stamp duty as long as it costs less than £425,000. If it costs less than £625,000, you must pay 5% on the portion from £425,001 to £625,000. If the price is more than £625,000, use the table above.
Other costs
SDLT is not the only tax that buyers of UK properties must pay. The UK real estate agents usually act in the sellers’ interests. If you want to make a good deal, you will need professional assistance from independent experts. Such assistance will add to your purchasing costs:
- Conveyancing fees starting from £2,000;
- Costs for requesting a government report that start from £700;
- Survey fee of around £1,000;
- Sometimes, additional costs to get help from third parties: lawyers who act on behalf of a housing management company or other individuals involved (the sum is agreed upon on a case-by-case basis).
If you plan to take out a mortgage to purchase a UK property, you will have to consider the following expenses:
- Mortgage arrangement fees payable to a mortgage company – up to 1% of the mortgage, the average is £1,000.
- Mortgage broker fees – around £1,000.
- Valuation fee payable to a mortgage lender – around £800.
Post-acquisition costs
Ground tax
If you do not own the land that your house or flat sits on, you enter a long-term rental relationship with your landlord. The ground tax rate is not very high and amounts to £50–100 per year. The only exception applies to expensive flats and houses in central London where the tax rate can reach tens of thousands of pounds.
Council tax
Any occupiers of a UK property, a landlord or a tenant, must pay a council tax that is used to maintain the outside territory and the infrastructure surrounding the real estate. It means that if you rent out a flat or a house, it will be your tenants’ responsibility to make the payments. It substitutes the property tax that is not charged in the UK.
Buying UK property off plan
Buying off-plan means investing in real estate before its construction is complete. In some cases, the construction may not have even been started. There are two completion dates to note when buying off-plan: a short stop date when the developer expects the property to be finished, and a long stop date when it must be finished.
What are the advantages of buying off-plan?
- Deposits for unfinished new builds may be cheaper than those on completed properties.
- You can often influence design features, fixtures, and fittings.
- Purchasing the property at a fixed price before completion means you can benefit from inflation on 100% of its capital value.
- There may be discounts available for bulk purchases, which can act as a safeguard against potential market deflation.
In some cases, you may choose to sell the property before it is built. To do this, the contract must be re-assignable. It is recommended to check this before proceeding with a purchase of this nature.
Off-market buying refers to private sales that are not advertised on the open market. We have access to the pool of such options and usually select the most attractive options for our clients.
Purchasing UK buy-to-let property
When you plan to purchase a buy-to-let property, your approach would differ from when you buy a flat or a house for yourself. This is a type of investment as old as the practice of land ownership.
A buy-to-let property can generate a short-term rental income, provided the owner (the landlord) has accounted for all taxes, maintenance costs and mortgage, if any. Should the value of the property go up, the investment can generate capital gains in the mid to long term.
Criteria for UK buy-to-let property
- Location
The location will determine how much you can let your property for and how much you will gain if you decide to sell. In the UK, there is an inverse relationship between these two parameters. Investors may choose to focus on an area where real estate prices are rising, but rents remain steady, or the other way around. - Property condition
You can increase the property value through refurbishment or alterations. However, most people prefer to buy a UK property that can be rented out right away. - Mortgage arrangements
Interest rates on buy-to-let mortgages are usually higher. The deposit for a buy-to-let mortgage can vary between 20 and 50%, but the minimum deposit is usually 25%. - Single or multi-unit purchase
In some cases, bulk discounts are available in multi-unit freehold blocks (MUFBs) when investors are looking to buy several properties at once. - Funds liquidity
It might take a while to access the money invested in a property. Besides, you need to objectively assess the liquidity of your purchase: for some flats and houses in the UK, there is a steady demand; others cannot be rented out so quickly and easily at a reasonable price.
Landlord’s responsibilities
You must understand your rights and responsibilities if you plan to become a landlord. For example, every time you get your rent, you must do the following:
- Declare your income;
- Pay income tax even if you are a non-UK resident.
Mortgage in the UK
The mortgage rate in the UK is record low starting from 2%. The standard mortgage term is 25 years, but it can be extended to 35 and 40 years.
General eligibility requirements
- Age – from 18 to 75 years old;
- Stable income and regular outgoings to be able to make mortgage repayments;
- Borrowed amount is on average up to 80%. In some cases, it can be up to 100%. However, it is better to approach a lender with a deposit in hand. The higher the deposit, the better interest rate you can get.
Mortgage documents for foreign applicants
- An ID;
- Proof of your current address;
- Proof that you have enough finances in your bank account (bank statement etc.);
- Proof of your sources of income for the last three months (for example, payslips, dividends, bonuses for the last year, etc.);
- Additional documents to confirm your creditworthiness.
Purchasing UK property with Imperial & Legal
Purchasing UK Property with Imperial & LegalPurchasing property in London or any other British city is not so difficult. At the same time, there are a lot of things to be aware of. If you are not sure whether you can comprehend all of them, if you want to optimise your taxation and be confident in the condition of the property you purchase, you can contact Imperial & Legal for help.
We are not real estate agents, so we will represent you, the buyer, and not the seller. Our approach is to offer completely unbiased and balanced support to ensure you find and purchase the right property at the right price. We will also advise you on the related taxes and fees and offer cost optimisation solutions.
Imperial & Legal’s specialists have been in real estate for more than 20 years working both in the open and private markets, with well-known real estate agents and private developers alike. The latter usually offer very attractive options.
How we work
- Initial meeting
It is an important first step that enables us to fully understand your requirements and what is important to you. We can also advise you on locations, styles, price per square meter, and current market conditions. - Property criteria
We narrow down search criteria taking into account your requirements and preferences. This is emailed to you so that we are all clear on the initial search criteria. - Property search
We do a thorough market search on your behalf, including properties which aren’t officially on the market. Our network of contacts alerts us of any housing stock, distress and failed sales, auction opportunities, and new builds in advance of agent listings. We then preview the properties which closely match your criteria. - Report to you
Having viewed each property, we shortlist those which best suit your brief and provide you with honest and objective feedback on them. - Viewings with you
Most of our clients choose to view the shortlisted options themselves. We organise viewings at times to suit you. We drive you to all viewings to show you around ourselves and discuss feedback with you afterwards. If you’re not going to be in London, we can organise a virtual tour (via Zoom, Skype, etc.) or show the options to your friend or family member. - Negotiation
When the right property is found, we advise you on its value and negotiation tactics or handle the negotiations on your behalf to secure the lowest possible price. We can also organise an independent inspection of the property to detect all the defects before the purchase and avoid the related additional repair costs. - Overseeing your purchase
Once the price is agreed upon, we manage the buying process on your behalf through to completion, liaising with all parties involved. Our experienced conveyancing solicitors will act in your interests through the whole process, check all documents, and ensure that the process runs as smoothly and quickly as possible. - Settling in
Even after the deal is made, Imperial & Legal remains on hand. We will provide you with a tailored comprehensive relocation package. Our experts will help you not only obtain the required visa but also open a bank account, set up a business, find schools for your children, and optimise taxation. - Property management
If you treat your UK property as an investment or do not plan to live in the purchased flat or house for some time, we can provide you with a full property management service.
What is property management in the UK
An overview of the property management service and its advantages
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