Can A Foreigner Purchase Property In The UK? Know The Process
Yes, foreigners and non-residents are eligible to buy property in the UK as presently there are no legal restrictions to buying property in the UK.
The process of buying a property in the United Kingdom would take you a duration of about 2 to 3 months.
To buy property in the UK you will need to appoint a UK lawyer or conveyancer who will handle the paperwork of the property to be purchased.
What types of properties can you buy in the UK as a foreigner?
As a foreigner, you are allowed to purchase all types of properties in the United Kingdom whether new, under construction or property to be re-saled.
Apart from a solicitor, you may also want to hire a property agent in the UK to help you source a suitable investment in the property, can assist you in the paperwork and the property buying process in the UK.
Foreigners can also get a mortgage in the UK, however, those without a job and those with less than 2 years of residency may face more stringent requirements and might be required to make a big deposit.
As a prospective buyer, you should check in the home report of the property you wish to buy as the sellers are required to put together the home report for the property they wish to sell in the UK.
What good is the home report?
The home report of the property contains some of the features of the property as well as the energy performance certificate that indicates the home’s Energy Efficiency rating and should also give you an idea regarding the operating cost involved in the property.
The Process Of Buying Property In The UK–
Offer and Acceptance-
As a buyer, you can put in an offer on a UK property either verbally or can place a written offer through an estate agent or direct with a private seller.
Once your offer has been accepted by the seller, the seller frames the contract of sale for the transfer of legal ownership of the property.
Note- Any offer made upon the property is not legally binding in England, Northern Ireland and Wales until contracts are exchanged.
Hiring a UK Lawyer-
The legal work around the sale would be carried by the lawyer so you’ll have to be prepared to hire a lawyer to complete your property transaction in the UK.
How much will the lawyer cost in the UK?
Although some lawyers charge by the hour and some have a fixed fee, however, for the work involving the sale of property, a lawyer typically will cost you between 500 pounds to 1500 pounds plus VAT.
Paid survey of the property-
Evaluation survey of the property to be purchased is arranged by your mortgage lender, however, you want to command the survey of the property that tells you about the potential maintenance and repair cost.
The survey to be carried out has to be paid for by you.
Following are the types of surveys available-
Royal Institute of Chartered Surveyors (RICS) condition report- This survey is a basic ‘traffic light’ survey often made for newly built homes and doesn’t include evaluation or advice.
The cost of the survey is about 250 pounds.
RICS Homebuyer Report- this survey is a more detailed one that includes a valuation and costs around 400 pounds or above.
Building or Structural Survey- this survey is mostly recommended for older homes or homes that are to be repaired and costs 600 pounds or above.
You can draw a comparison between quotes from surveyors through the RICS search tool in your area.
The aftermath of the survey-
The survey helps you to identify issues and problems in the property to be purchased and enables you to renegotiate the price of the property in light of the new information discovered through the survey.
If you are applying for a UK mortgage you may need to renegotiate if the survey made values the property at a lower price as your mortgage provider will probably reduce the amount that was to be lent to you.
After the offer made by you has been accepted, you need to make the payment of the deposit and finalize the mortgage.
Note- A time period of 7 days will be allotted to you to accept the mortgage offer by your mortgage lender.
Can you cancel the mortgage once signed?
You can cancel the mortgage after signing but this causes you to lose the upfront fees for the mortgage costs.
Signing and completing the contract-
As a buyer, you’ll receive a property contract from the seller’s lawyer to sign and complete the sale.
Note- before signing the contract make sure to check the details of the contract with your lawyer and ask for amendments if you wish to make any because once you sign the contract it commits you to the sale.
It is important to check that the contract includes all the key details concerning the property such as-
-the price of the property
-the completion date of the property
-any other conditions for the sale.
Post the Signing-
After signing contracts, it’s time to complete the money transactions.
The money for the sale now from your lawyer’s account and mortgage provider’s account has to be transferred to the account of the seller’s lawyer’s account.
The successful transfer now enables you to get the keys to your new home.
Hereafter, the sale should be registered by your Lawyer with the Land Registry and pay any due stamp duties with any outstanding mortgage fees.
Apart from the sale transaction, it’s time to pay your legal bill to your Lawyer.
Council Tax-
After you move into your new home make sure to notify your local authority that will enable them to send you a Council tax bill for the year. For all UK residents, whether owning or renting, it is important to pay the Council tax.
Costs are related to the value of your property and those living on their own are given a 25% discount.
Insurance after moving in-
If you buy a property to let and take out a mortgage you will have to purchase building insurance that protects against damage to the property caused by incidents such as flooding and things such as fire.
In order to protect your home possessions and furniture, you can also take out home contents insurance.
A combined homeowners insurance is also offered by many insurance firms that cover the building and all its contents.
Stamp Duty-
Stamp duty is applicable to all property purchases over 125,000 pounds at a rate of between 2% to12% (for 3% to13% for second homes or buy-to-let purchases).
Land registry fees-
The fees have to be paid to the UK Government in order to transfer the property’s legal deeds to a new owner.
Deposit-
If you’ve taken out a UK mortgage for buying a property in the UK, you will have to pay a deposit towards costs that usually ranges between 5% to 40% of the cost of the property.
The Mortgage Costs-
This includes the booking fee, the arrangement fee and the valuation fee.
Leaseholder costs-
There may be additional charges such as ground rent charges if you buy a leasehold property in the UK which can be up to 50 pounds to 100 pounds a year.
The ongoing cost of buying a property in the UK
The ongoing cost of buying a property in the UK can include the insurance cost, the maintenance and repair, the mortgage repayment costs, the regular bills of the property and the leaseholder costs.
