It’s relatively easy for expats to buy properties in the UK, as there no legal restrictions hindering them from doing so. Non-residents and foreigners may also own a home through a mortgage, but they may face more stringent requirements if their residency is only two years or less. Hence, it’s only more advisable to buy a property if you’re residing in the UK for more than two years or permanently.
Foreigners may also purchase commercial properties and become a landlord. They’d be subject to income rental taxes, unless they’re already paying these taxes in their home country, and if their country has a double taxation agreement with the UK.
In this guide, we’ll find out more crucial details foreigners need to know before buying or selling a property in the UK.
Buying a Property
The costs of buying a property in the UK can be sorted into two categories, namely upfront costs and ongoing costs. Upfront costs include stamp duty, which applies to all properties priced more than £125,000, at a rate between 2 – 13% of the purchase price.
If you’re taking out a mortgage, your down payment, which is usually 5 – 40% of the property’s cost, is also part of your upfront costs, in addition to the other fees involved in securing a mortgage.
You’d also need the services of a conveyancer or solicitor, which will likely cost you at least £1,000. And before the legal deeds of the property can be transferred to you, you have to pay land registry fees to the UK government first.
The ongoing costs, on the other hand, are the ones you’d deal with upon officially owning the property. These include your monthly mortgage payments, maintenance and repairs, insurances, utilities, taxes, and leaseholder costs (for leasehold properties).
The Process of Buying
The process of buying a property in the UK can take 2 – 3 months. The first step is making an offer, which your seller has to examine and accept. Next, your seller will propose a contract either verbally or in writing. You may hire a solicitor in this process to ensure that all terms in the contract are in accordance with the law.
After carrying out the initial legal works, the property has to be surveyed to have any potential issue addressed. When the survey yields only favorable results, then you may already finalize the offer, sign the contract, and have the property ownership transferred to your name.
Selling a Property
Selling a property in the UK generally follows the same procedure as any country. You list your property in the market, review offers, and make a contract with the help of your own solicitor. You may also hire an estate agent to have all the legwork handled for you.
The only issue in selling your property is if it has negative equity. (the home’s value is less than its outstanding mortgage) In this case, you’ll have to bear the losses.
It’s also required for sellers to obtain an Energy Performance Certificate (EPC), which they need to issue to their buyer or tenants. An EPC shows a property’s energy efficient rating (A being the most efficient, and G being the least efficient), and is valid for 10 years. If you’re a property seller, you can get an EPC from trusted suppliers such as Prop Cert and other accredited assessors.
In most cases, working with an agent when buying or selling is highly recommended, as an agent’s expertise in the market and the laws will come in handy if you don’t quite know your way around UK’s real estate industry yet. But as long as you’re equipped with the information shared above, you’re good to start your quest of buying or selling.