Buying a property in the UK – an essential guide for overseas purchasers

Buying a property can be an extremely lucrative investment. With UK house prices rising and the mortgage market settling once more after months of interest rate increases, 2024 is already shaping up to be a great year for those looking to climb onto or up the property ladder.

For non-UK residents looking to diversify their portfolios, establishing a foothold in the vibrant British property market is a great idea for so many reasons. Yet, navigating the complexities of any domestic property market (especially one as intricate as the UK’s) isn’t for the fainthearted.

Here we share an essential guide that’ll walk you through the key steps and considerations to a successful property purchase in the UK.

Start with the basics

It’s crucial for any buyer (whether from the UK or overseas) to have an understanding of the market they are buying within. We’d always recommend doing your research before delving into the property buying process. Instead of casting your net wide to find the knowledge you need to proceed however, you should focus on the local dynamics of the property market.

The market can after all vary significantly from region-to-region, with London and the South East generally experiencing higher property prices compared to other areas. Use your research to identify the most fitting locations and property types for your investment goals and budget before starting your search.

Explore your options

Securing finance as a foreign investor can be challenging. Contrary to popular belief however, it’s not impossible, with both residential and buy-to-let mortgage products accessible to foreign investors.

While the terms may differ from those available to citizens, many UK banks offer mortgages to non-UK residents. Wealth manager Adam Fayed reveals just one of the mortgage types non-residents can explore when buying a property in the UK from abroad:

“ You will require a certain kind of mortgage if you intend to buy a house with the intention of renting it out. In many significant ways, these buy-to-let mortgages are distinct from conventional residential mortgages. If you decide to become a landlord, you will need to obtain a buy-to-let mortgage as opposed to a residential one.”

Seek professional advice from a mortgage broker with experience (like us) to access the most suitable financing options for your circumstances.

Your mortgage broker will play a crucial role as the property purchase progresses. There are after all a number of things that could slow down your property purchase. With the help of an independent mortgage broker however, you can ensure the financing and purchase of your UK property goes smoothly.

Navigate the legal landscape

There are several laws that will influence your property purchase as a non-UK resident, which is why it is important to enlist a solicitor to guide you through the legal process. They will help you understand the intricacies of UK property law, handle the necessary paperwork, and ensure a legally compliant transaction.

There are also various tax implications that you should be aware of. The rates of Stamp Duty Land Tax (SDLT) for non-UK residents for example make for essential reading, with current rates 2% higher than those that apply to purchases made by UK residents.

Don’t overlook due diligence

Thorough due diligence is essential to success when purchasing a property as a foreign investor. Before you commit to the purchase, inspect the property, review legal documentation, and assess local market conditions.

Engaging with local property experts, such as surveyors and estate agents, is also recommended and is ultimately your route to gaining valuable insights into the property’s condition and potential.