Can someone from abroad buy a house in the UK? Yes, you can buy a home in the United Kingdom as a foreigner. Having a mortgage means that it could be a lengthy procedure. You can also show the legitimacy and source of your funds. However, being a cash buyer, purchasing property will be easy. Today’s blog is all about Foreign Ownership of UK Property.
You should be aware of the fact that many UK lenders will refuse to lend to a non-UK person, limiting your alternatives or forcing you to pay higher interest rates or make greater deposits. To prevent this, you might seek assistance from specialist lenders or overseas banks in obtaining a UK home mortgage. Keep in mind, however, that these organisations will evaluate whether to lend depending on a variety of characteristics such as age, income, and credit score.
Money laundering will be investigated when you acquire UK property as a foreigner, as it is a criminal offence in the UK to launder money.
- You must first locate the property you wish to purchase.
- As soon as you’ve decided on a price, both sides must sign a contract, which will bind the Seller-seller.
- Have the Due Diligence completed as quickly as possible, you solicitor, and do it in conjunction with the Seller’s-solicitor?
- Once the contracts have been signed and the funds have been received, the money can be deposited.
- The exchange takes place, and the keys are handed over.
- You will be responsible for all taxes, such as land tax, stamp duty, and so on.
When you decide to buy property in the United Kingdom as a foreign national, you’ll require the following documents:
- Passport (Proof of Identity)
- Evidence of financial support (This is to ensure that no money laundering is taking place.)
- Current bank statements are required (3 months old – Proof of Address)
- Proof of earnings (Payslip/ Tax Return)
- The resident country’s tax clearance
Non-UK residents must pay non-resident capital gains tax, which you will have to pay if you live in the UK.
You have 60 days from the date of conveyance to pay CGT. The amount of tax paid will also depend on whether you’re an individual, company, or trust and what type of property you’re selling.
- A non-resident individual will pay 10 or 20% tax if it is a non-residential property. For residential property, you will pay 18% or 28% CGT.
- A non-resident company will pay a flat corporation tax of 17%.
- A non-residential trust will pay a 20% tax on non-residential property. If it’s a residential property, a trust will pay 28% CGT.
How long it takes to buy a house
There is no set timeframe for this. The keys are normally handed over to the Buyer after 4 months. Furthermore, purchasing UK property as a non-resident would take a little longer due to the additional time required for due diligence and money clearing.
Who invests in the UK?
Last year, Hong Kong investors created a lot of hype in the London market. According to Savills, the highlights included Wing Tai’s £255 million purchase of 66 Shoe Lane, K&K’s £66 million purchase of 15 Adam Street, and Nan Fung’s £140 million wager on 99 City Road.
Singapore is expected to contribute £1 billion in inflows to the London office market this year, up from £0.4 billion last year. Greater China investors are expected to invest £1.5 billion, up from £1 billion in 2021.
Mortgage Lenders UK
As a non-UK resident, you’re more likely to acquire a mortgage from lenders like:
- HSBC is a bank that provides mortgages to expats.
- Barclays – provides mortgages to investors outside of the United Kingdom.
- NatWest – provides mortgages to persons who live in certain countries outside of the United Kingdom.
- Skipton International – provides expats with buy-to-let mortgages.
Increasing chances of a Mortgage
Having an excellent credit score will improve your chances of receiving a UK mortgage. Credit history varies by country. This means it only applies to the country in where you obtained the credit. As a result, if you visit the United Kingdom, you will have no credit history there.
To increase your chances of acquiring a mortgage, do the following:
- Maintain a credit card account. When visiting the UK, using a UK credit card can be beneficial.
- Register a UK bank account in the name of a family member or acquaintance who lives in the UK.
It is possible to obtain a mortgage without a credit history, but your choices will be limited. It’s possible that you’ll need to secure a mortgage with a higher interest rate and a larger down payment as a result.
If you enjoyed this article on Foreign Ownership of UK Property then you might also like to read: How long does it take to buy a house UK?