Real estate in the UK signifies reliability and stability for most people because it is a part of Europe but at the same time not a part of unstable continental Europe. Whatever their age, many wish to buy a property in England, from young people that come to study in universities and live in a stable country to well-to-do pensioners that want to spend their retirement in a safe environment.
There are no legal restrictions on foreigners in terms of which real estate they want to buy, it can be a huge flat for a single family or a period mansion. Among other benefits is zero real estate tax which brings later costs down.
Before you buy real estate in United Kingdom, you need to look into the legal side of the purchase and ownership. Title to a property does not automatically lead to citizenship and special benefits; however, it provides protection from the state in the same way as for a British national.
The seller is not liable for any defects or damage found after the purchase. That’s why it’s so important to ask for professional advice and help; they will evaluate the property and make sure everything is in order before you buy it. It will save you a lot of hassle in the future.
If you decided to buy real estate in London or any other city in the UK, it is not just the purchase price you need to think about – it is also potential taxes and expenses. In some cases, additional costs can make up to 20% of the purchase price.
Purchase price is only one payment. There are many other payments you need to bear in mind when buying a property in United Kingdom.
Any type of real estate is taxable, land, flats, houses. It is a fixed percentage of the purchase price, and the lower the price the lower the tax.
If you’re buying your first home, you don’t have to pay any stamp duty so long as it costs less than £300,000. If it costs less than £500,000 you have to pay 5% on the portion from £300,001 to £500,000. If the price is more than £500,000, you have to follow the standard rules above.
Buying off plan is the action of buying real estate before the development is complete. In some cases, the development may not have even been started. There are two completion dates to note when buying off plan – the short stop, when the developer expects the property to be finished, and the long stop, when it must be finished.
Advantages of buying off plan
In some cases, you may choose to sell on the purchase before it has reached completion. This process is known as flipping contracts. In order for this to be done the contract must be assignable, we recommend that you check this prior to proceeding with a purchase of this nature.
Off market buying refers to private sales that are not advertised on the open market, either through an agent or directly with the real estate owner.
Buy-to-let is a commonly used term for purchasing a residential dwellings with a purpose of letting it out to tenants rather than lived in by the owner. This is a type of investment as old as the practice of land ownership. Buy-to-let property can generate short term rental income, providing that the owner (the landlord) accounts that the revenue will cover taxes, cost of maintaining the property and mortgage, should there be one.
Providing the value of the dwelling appreciates, these investments can also return mid to long term profits through capital growth.
Area– areas command different rental yields and capital growth. Investors may choose to focus on an area where real estate prices are rising but rents remain steady, or other way round;
Property Condition– investors can potentially increase the value of their asset through renovation and conversion, but some investors will want a property that is ready to rent immediately;
Mortgage arrangements– interest rates on buy-to-let mortgages are usually higher. The minimum deposit for a buy-to-let mortgage is usually 25% of the real estate’s value (although it can vary between 20-40%);
Single or multi-unit purchase– in some cases bulk discounts are available in multi-unit freehold blocks (MUFBs) when investors looking to buy several properties at once;
Funds liquidity– it might take a while to access the money invested in property;
Landlord responsibilities– it is important to understand your rights and responsibilities when becoming a landlord.
Typical mortgage rate in the UK is 3.5-4.5%. It is very low compared to some other countries. Standard mortgage term is 25 years, but it can be extended to 35 and 40 years.
Not all UK banks offer mortgage to non-UK residents. And if they do, they offer slightly sell favourable conditions and higher interest rates. You will be also undergoing extra checks to ensure you are creditworthy.
Buying property in London or elsewhere in the UK is rather straight-forward but there are many things and pitfalls to be kept in mind. If you cannot do it on your own, or you want to minimise taxes and buy high-quality real estate, Imperial & Legal would be happy to help you.
We are not an estate agent nor are we affiliated with any. We only represent you, the buyer, whilst estate agents represent the vendor. Our approach is therefore to offer completely unbiased and balanced support to ensure you find and purchase the right property at the right price. We will also advice on related taxes and fees and offer optimised solutions.
We have been in real estate for many years working both in the open and secret markets, with well-known real estate agents and private developers correspondingly. The latter are not published anywhere and they are the ones offering very attractive options.
Initial meeting– this enables us to fully understand your requirements and what is important to you. We can also advise you on local areas, styles, price per square meter values and current market conditions.
Property criteria– we compile a focused and realistic search criteria, which takes 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 thoroughly search the market on your behalf, including properties which aren’t officially on the market. Our network of contacts alerts us to Housing stock, Distress sales 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– 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 show options to a friend/family member, or we can purchase remotely if you don’t need to view before you buy.
Negotiation– when the right property is found, we advise you on its value and negotiation tactics, and handle the negotiations on your behalf. We strive to negotiate the lowest possible price and secure you the best option for your budget.
Overseeing your purchase– once the price is agreed, we manage the buying process on your behalf through to completion, liaising with all parties involved. We help resolve any issues, should they arise, and ensure that the process runs as smoothly and quickly as possible.
Settling in– post completion, we are on hand until everything is in place. We also provide you with a tailored moving pack, including a checklist of the organisations which need to be notified about your move. If you are buying as an investment, we can provide a full Property Management Service.
We will help you find your home, assess its condition, help you secure a loan and understand your rights and obligations. Contact us today to discuss your options.
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