Buying

Looking to Buy a Property in the UK?

Here’s Everything you need to Know…

Besides London, there are many scenic places to live in the UK that are attractive for expats. Whether you are eager to answer the call of the English countryside or stick to the cosmopolitan hustle of London's neighbourhoods, expats relocating to the UK first have to navigate the process of buying a house in the UK.

Buying property in the UK will probably be your biggest single investment, so it's important to work out the total cost – not just your UK mortgage – and how much you can realistically afford when searching UK property for sale. You also need to plan for increases in your future outgoings, like a rise in interest rates. Should you wish to file for a divorce in the UK rules may vary regarding your property.

Identifying the Correct Location and Property

London is a big place and, just like all major cities has good, bad and indifferent localities. Overseas buyer, particularly wealthy ones, often gravitate towards what is know as Prime Central London, namely Mayfair, Westminster, Kensington and Chelsea. A property search is time consuming, this is why it’s always best to engage in the services of a specialist estate agent to find a property for you.

Understanding the Buying Process

In the UK due diligence is carried out prior to the parties entering into a binding contract, At Dowens Real Estate it is important to note that all of our documents are in English however we can offer support for translation services if required. This is unlike many other countries, for example in Europe, where contracts are entered very quickly, and due diligence occurs afterwards, and before completion. Due diligence will include checking the title of the property, obtaining a survey, carrying out searches of the local and other authorities, obtaining information from the buyer and the freeholder/managing agent and agreeing the terms of the contract.

Ownership Structure

The key issues here are tax and confidentiality. Tax is complex depending on your circumstances, and further information is given below. For most higher value properties, it is inadvisable for a property to be in your own name. This is both from a tax perspective, and to keep your identity confidential and secure. It should be noted that the UK Land Registry is open to the public and so the name of the owner of the property and the price paid can be seen by anyone through the Land Registry’s website. A common structure would be an offshore company with shares held in what is known as an excluded property trust.

Understanding Documentation

Buying or selling a home normally takes 2 to 3 months but the process can take longer if you’re part of a chain of buyers and sellers. If you are purchasing a UK home from overseas then it is important to hire a translator when it comes to the next set of steps in which you’ll need to follow:

• Sellers must provide an Energy Performance Certificate for the property
• If a seller is using an estate agent, potential buyers must make any offers through the agent
• Once a buyer’s offer has been accepted, the seller’s responsible for drawing up a legal contract to transfer ownership
• An offer isn’t legally binding until contracts are exchanged
• Depending on the amount given for property, the buyer may have to pay Stamp Duty Land Tax

Essential House Purchase Documents from your Seller

• Guarantees – e.g. any recent damp-proofing, new appliances (oven, boiler, etc), FENSA (double-glazing) certificates. FENSA certificates last 10 years; damp proofing guarantee should also be about 10 years. New appliances can have a warranty period of anything from 12 months to perhaps five years for a boiler.
• Records of servicing of boiler.
• Electrical certificates for any electrics works/rewiring.
• Building control certificates for any extensions or conversion works that may have been done to the property.

Essential House Purchase Documents as a Buyer

• Buildings insurance policy details and contents insurance policy details.
• Survey – if you have had a survey, it is useful to keep a copy of this to remind you what issues were raised/might need attention soon.

A Good Investment

Before you set out to buy property in the UK, it’s important to gauge the market. The housing crisis has made mortgage lenders more cautious in recent years, which in turn has seen the average age of first-time buyers rise to 30 years old, and up to 37 years in and around London.

Like elsewhere, the UK property market is taking time to recover from record-low prices following the financial crisis, in addition to the 2016 Brexit referendum through which the market appeared to remain relatively stable. Experts predict a steady, albeit slow, growth over the next few years due to certain relief initiatives, including:

• low interest rates post-Brexit, which sit at around 0.25 percent
• changes to UK stamp duty in April 2016 substantially increased upfront costs for buyers, particularly for those buying a second home or buy-to-let property.