Buying a property
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 but 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 property 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.
Main things to consider when buying real estate in the UK
Before you buy a property in England, 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 but property 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.
Real estate taxes
Purchase price of the property is only one payment. Other payments you need to bear in mind:
Stamp duty land tax (SDLT). Any type of property is taxable, land, flats, houses. It is a fixed percentage of the purchase price, and the lower the price the lower the tax:
- Up to £125,000 – 0% (3% for additional property);
- The next £125,000 (from £125,000 to £250,000) – 2% (5% for additional property);
- The next £675,000 (from £250,000 to £925,000) – 5% (7% for additional property);
- The next £575,000 (from £925,000 to £1,500,000) – 10% (13% for additional property);
- More than £1,500,000 – 12% (15% for additional property).
If you’re buying your first home, you don’t have to pay any stamp duty so long as the property 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.
- conveyancing fees payable to a conveyancer or a conveyancing solicitor – £500 to £1,500 plus £250-450 for disbursements, e.g. transferring ownership fee;
- survey fee payable to a professional surveyor – up to over £1,000;
- mortgage arrangement fees payable to a mortgage company – up to 1% of the mortgage, the average is £1,000;
- mortgage broker fees – up to 1% of the mortgage;
- valuation fee payable to mortgage lender – around £200.
Mortgage in the UK
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.
General eligibility requirements
- Age –18 to 75;
- Borrowed amount – up to 100% in some cases though in average 80%. However, it is better to approach a lender with a down payment in hand. The higher the down payment, the better interest rate you can get;
- Down payment – can start from zero. At least 20% is
Mortgage in the UK for foreigners
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.
- copy of an ID (passport);
- bank statements;
- proof of salary/ letter from employer;
- utility bills, etc.
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.
Buying property with Imperial & Legal
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.
How we work
- Initial meeting – this enables us to fully understand your requirements and what is important to you. We can also advise you on local areas, property 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 the property options to a friend/family member, or we can purchase remotely if you don’t need to view the property before you buy it.
- Negotiation – when the right property is found, we advise you on property value and negotiation tactics, and handle the negotiations on your behalf. We strive to negotiate the lowest possible price and secure you the best property 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.
To discuss your requirements, please contact our specialists or call us on +44 (0)203 490 41 21.