Project Description

June 25, 2020

A 10 step guide: How expats and foreign investors can invest painlessly in UK property

Our simple 10-step guide explains how to invest in the UK property market, using our tried and tested process

There’s no doubt that the UK property market is one of the best markets in the world. For foreign investors, the UK meets all the criteria of an excellent property investment opportunity.

However, as an expat or foreign investor, it can be hard to understand how you can legally invest in UK property. After all, the rules that apply to UK natives often differ from those that apply to foreign investors.

To make things easier for you, we’ve created a quick overview of each of the steps that you will need to go through. 

This process is not just something we made up, either. It’s a proven system that we’ve been using for over a decade at our property investment company that specialises in foreign investors.

Step 1: Get Expert Support

Trying to invest in UK property as a foreigner is a complex process that can be overwhelmingly confusing. For example, both leasehold and freehold properties will be available to you, but they offer very different investment opportunities.

Finding a reliable advisor or legal representative who understands the UK property market is essential to your success. It’s a good idea to make sure they have experience helping foreign investors too, as they will be able to provide you with the most accurate and helpful advice. 

Step 2: Decide On A Budget

The next step in the process is to decide on a budget. As you know, buying property requires a significant upfront investment and includes many costs along the way.

As a foreign investor, we suggest you have a 15 – 25% deposit if you want to get the best mortgage rates. You’ll also need to have money aside for stamp duty, legal fees, reservation fees, inspection services, etc.

If you’re going to be exchanging your funds to GBP, you will also have to consider the exchange rate and any possible fluctuations. Again, different exchanges will provide different rates, so it pays to shop around for the best rates.

Step 3: Find A Property

For those who want to invest in UK property, choosing what to invest in is the most important part of the process. As with all real estate investments, location is everything.

If you can afford to invest in London, it’s known to provide excellent returns though the upfront cost can be too much for many investors. If that’s the case, there are plenty of upcoming areas that are worth consideration, such as Leeds, Birmingham, Newcastle and Dundee.

This is another area where it pays to have good support from an advisor who knows which areas are worth your money.

Step 4: Make An Offer

Once you’ve found a property that has potential for excellent returns, you will need to make an offer or reserve it. This process is usually done by a real estate agent or property investment advisor. You may also need to pay a reservation fee, pass laundering checks and prove your income.

In this stage of the process, you will also want to have a mortgage broker find a buy-to-let mortgage from a provider that supports non-UK residents. Again, it pays to shop around for the best mortgage and to consider the option of investing without a mortgage if you have the finances for it.

Step 5: Appoint A Solicitor

Once you are ready to make the reservation, you should appoint a solicitor to handle the legal work around the transaction. A good, reputable solicitor will charge anywhere from £800-£2000, of which you will need to pay 15%-50% as an upfront deposit.

Step 6: Survey A Property

There are many surveying and property inspection services that you can use to get a third-party, expert opinion of the value and condition of the property you intend to invest in.

We highly recommend these investors use these services as they will help you to avoid headaches and unexpected costs in the long-run. If the surveys find a problem, you can use that information to negotiate a lower price on the property, or request for it to be fixed before you purchase it.

In most cases, the lender will arrange a survey for £150-£1,500 to ensure that the property is worth what the seller is asking for it. However, these inspections are not the most thorough and can often fail to identify every problem.

That is why we recommend you seriously consider additional surveys if you want to be 100% sure that the property is worth your money. There are many other types of surveys available, the most common being RICS Condition ReportsRICS Homebuyer Reports, and building or structural surveys.

 Overall, the surveying stage of the process is commonly the most stressful. This is because lenders can reject your mortgage or offer less financing if they feel the property is not in a suitable condition.

Stage 7 – Finalising Your Mortgage

After you’ve had the property surveyed and accurately valued, it’ll be time to contact your mortgage broker or lender. Once you let them know you are ready to proceed, you will have to pay an arrangement fee which can be as high as £2,000. (You can include this in your mortgage.)

 After you have paid the arrangement fee, the lender will send you a binding offer which you will have a minimum of 7 days to approve.

Stage 8 – Exchange Contracts

If you are happy with the offer the lender sent you, let them know, and they will send you a contract which you can go through with your solicitor. In most cases, the contract will be accurate and ready to sign.

Stage 9 – Seal The Deal

Now that you’ve completed the deal, the final last step in the transaction will be to get the funds transferred from your solicitor to the seller. This is where you will need to pay stamp duty and any other closing costs, such as the remaining balance owed to your solicitor.

When all is said and done, the solicitor will register the sale with the Land Registry. After that, it’s all official — the property is now 100% owned by you, and ready to start generating ROI.

Stage 10 – Move In or Rent

Now that transaction and the legal process is completed, you are ready for the best part of the most exciting part – moving in or renting the property.

If you are intending on renting the property to tenants, then you can find a letting & management company that will handle everything for you. They’ll arrange insurance, council taxes, setup and transfer your utilities, etc.

If you are going to move into the house, you will need to arrange all of those things yourself, which isn’t too much of a hassle. After all, if you made it this far, you can handle anything!

Get The Support You Need

Choosing to invest in UK property as a foreigner is a daunting process that is best approached with expert support. If you are ready to invest and want our experienced foreign property investment company to assist you, don’t be afraid to get in touch.

For more information on any of the areas included in this blog,
Contact us here

Back to Market News

Article by: Rory van den Berg