Rightmove.co.uk is really the most established website when it comes to buying and selling a property in the UK. it has an interesting feature that lets you search by area rather than postcode. Moreover, it gives you access to actual selling prices as held on the UK Land Registry Website.
Foreign Nationals buying a property in the UK
There are no regulations in the UK that prevent a foreigner from purchasing property – as long as you have good credit or cash to spend. A great proportion of the homes in London, in fact, are owned by people who were not born in the UK.
To buy in the UK property market you need to think first and foremost about your tax situation. Your best option is to find a regulated specialist adviser experienced in offshore financed property transactions that can provide specialist tax planning, currency and independent advice. Or, alternatively, consider talking to an independent international specialist mortgage and property broker. Many expats choose to work with the popular companies such as:
To obtain a mortgage in the UK, a UK work permit is required. A permanent right to reside in the UK is also helpful. Some mortgage lenders are unwilling to lend to foreign nationals, while others are happy to lend residential or buy-to-let loans to those with a legal right to remain in the country. However, there are tailored home loans for foreign nationals or employees of government agencies or multinational corporations who expect to stay in the UK for an extended period. The name that springs to mind when it comes to expat and money is HSBC. All lenders will ask you for:
- Have proof of your right to reside which is no more than 3 months old or a work permit.
- Have a permanent work contract and income references.
- Offer a lender evidence of a permanent right to reside and paperwork showing you are a taxpayer.
Bear in mind that UK lenders are unlikely to lend to you if you have no record or proof of earnings.
The Process
1. View the options. Get online and check out http://www.zoopla.co.uk and http//www.rightmove.co.uk. Narrow down your search and focus on one area. Remember that estate agents charge between 1% and 3% commission.
2. Make an offer. Don’t try to go too low or you will be out-bidded. Your estate agent will will make the offer on your behalf and negotiate for you. It is only down the line that you exchange contracts and are legally bound. At this stage no money is exchanged.
3. Obtain an offer from mortgage lender. First, compare mortgage offers at http://www.moneysupermarket.com/mortgages. Rates are constantly changing. Current variable rates range from 2% to 6% and depend on the amount of your deposit and credit rating. Decide whether you want a fixed or variable rate and if you’re unsure, discuss these options with your lender. Before 2008 one could get a mortgage up to 4 times their salary and 100% mortgages were not unusual. Nowadays banks are much more careful and will lend only to solvable people. There was been a sharp slump of around 20% between 2010 and 2011.
Some popular lenders are:
- Halifax: http://www.halifax.co.uk
- Nationwide: http://www.nationwide.co.uk
4. Arrange a survey. Your financing institution will preform a survey to determine the property value. This “valuation” is not a survey. You will need an independent survey carried out in addition to the valuation. The survey will not only consider the value of the property but also examines the structure of the property and should identify any existing or potential problems.
There are two levels of survey from which to choose:
- A full structural survey – This is suitable for a property which is large, more than 80/90 years old or in doubtful condition.
- An intermediate or ‘house/flat buyers report’ that gives a report on the condition of the parts of the house that are easy to see.
It is possible for you to use the same surveyor who does the valuation to carry out the survey and this may be less expensive. However, you can use a different surveyor if you wish. There are different types of chartered surveyors and they all belong to the professional body, The Royal Institution of Chartered Surveyors, which is online at: http://www.RICS.org.
5. Choose who will do the legal work, which is called conveyancing. It is feasible to take care of the legal process of transferring ownership of the property yourself, but this is far from advisable. It is highly recommended instead that you engage the services of a solicitoror or a conveyancer. Licensed conveyancers are not solicitors but are licensed by the Council for Licensed Conveyancers. Use this website to find an accredited conveyancer: http://www.conveyancer.org.uk.
6. Insure the property. You should make sure that building insurance is arranged from the date of exchange, because once contracts have been exchanged you are responsible for the property. You should be able to get information on buildings insurance from your mortgage lender, solicitor or a licensed conveyancer.
7. “Exchange” the contracts. The final contract between you and the seller is prepared when:
- The solicitor (or licensed conveyancer) and you are satisfied with the final outcome of all the surveys and valuations.
- Necessary action has been taken if a surveyor’s report that has been received required action.
- The formal mortgage offer has been accepted.
- Arrangements about the payment of the 10% deposit have been made.
- The date of completion has been agreed.
You and the seller each have a copy of the final contract which you must sign. These signed contracts are then exchanged. At the exchange of contracts, both you and the seller are legally bound by the contract and the sale of the house has to go ahead. If you drop out, you are likely to lose your deposit. If the seller backs out, you as a buyer with a legitimate contract and can sue them for non-performance and fight for the property in court until a judge orders them to finalize the sale contract or pay restitutions to you for any damages you may have been caused. Most sellers will consider settling before getting into any type of legal issues.
At this stage, you should make arrangements for the supply of gas, electricity and telephone service and make sure that the seller is arranging for final meter readings to be made.
8. Make the purchase official. Completion of the purchase usually takes place about four weeks after the exchange of contracts, although it can be earlier. On the day agreed for completion:
- The mortgage lender releases the money.
- The deeds to the property are handed over to your solicitor or licensed conveyancer.
- The seller must hand over the keys and leave the property by an agreed time.
9. Move in! See our section “Moving in” for further details.
Additional Fees
When purchasing a home in the UK, you are required to pay Stamp Duty. This fee is 1% for properties over £125,000, 3% for properties over £250,000, and 4% for properties over £500,000. You will pay this via your solicitor at the point of exchanging contracts. The scale goes all the way up to £2million which you can find here: https://www.gov.uk/stamp-duty-land-tax-rates.
