Buying a house in the UK
This guide explains the complete process of buying a house in the UK, where to find UK property for sale, and the cost of UK stamp duty and estate agents.
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.
In England, homeowners account for some 60 percent of the population according to the government’s English Housing Survey, with around 33 percent being outright homeowners as opposed to mortgaged, although this isn’t the trend in London.
If you're interested in UK houses for sale, this guide explains the complete process of buying a house in the UK, as well as essential information on UK Stamp Duty, UK estate agent costs and UK property auctions.
Is UK property for sale 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.
Should you rent or buy property in the UK?
If you’re planning to stay in the UK long-term or you’re certain on a particular area, buying a UK house or apartment can be a feasible solution, particularly considering the record-low interest rates on mortgages in recent years.
However, renting in the UK may be a better choice for foreigners intending to stay only a few years, as it may be more difficult to recuperate stamp duty and other costs in the short-term, as well as potential capital gains tax of 18–28 percent if you sell. Renting also allows newcomers to get a feel for different neighbourhoods and be in a position to put a quick offer on a house. Read Expatica’s guide for more information on renting in the UK or renting in London.
Finding UK houses for sale
UK houses for sale are most commonly listed with estate agents and on their websites, on online property websites and in newspaper classifieds. You can also find properties for sale by scouting specific areas and looking for ‘For Sale’ signs outside properties and contacting the estate agent the house is listed with. Regardless of how you find the listing, it will usually provide contact details for a private seller or their estate agent.
Doing an internet search will reveal many online property websites listing UK property for sale, such as:
- www.tepilo.com – UK property for sale directly from the landlord
- Expatica's find a house search
Estate agents are the usual method for house-hunting, however, as they tailor their searches to meet your specifications, have extensive local knowledge and generally have a wider variety of property listings. They can also arrange viewings on your behalf, as well as help with price negotiation and buying procedures.
When buying property in UK via an estate agent, it’s important to ask what their services include. Many UK estate agents offer solicitor and mortgage arrangement services that can make the process quicker and less hassle, but you can also shop around to get the right expertise for your circumstances and budget.
UK property auctions
It is also possible to buy a house at UK property auctions. Auctions are a great way to get property at low prices and quickly – usually a sale will be complete within 28 days. However, you need to be familiar with the proceedings and be prepared beforehand, making sure to view the properties and have an indication if they are a sound investment. You must also have the financial resources to pay a 10 percent deposit on the day of the UK property auction, and the remaining 90 percent within the contractual period. These are legally binding contracts, so if you pull out of a UK property auction you still risk losing your 10 percent deposit and could be subject to administrative fees.
Process of buying a house in the UK
The process of buying a house in the UK typically takes two to three months, but can be longer if you are part of a chain of buyers and sellers who are waiting on the purchase or sale of other properties.
Before you start house-hunting, you should get an estimate of your finances so you know what you can afford, whether that’s a mortgage in principle or your own capital. This will also prevent unnecessary delays once your offer has been accepted, or if you need to make a quick move to secure your ideal home.
Mortgages in the UK
If you need help financing the purchase of your UK property, it is possible for non-UK nationals to get an investment loan from a UK bank or mortgage broker. Most mortgage lenders will require you to raise a deposit, which is typically at least 10 percent of the loan amount but can be up to 40 percent for foreigners. It may also be possible to secure a home loan abroad against existing assets, but there may be tax implications. Lender arrangement fees also vary by lender, but can include a mortgage booking fee and arrangement or completion fee. Read more in our guide to UK mortgages.
The UK government has introduced the Help to Buy website to help potential homeowners take the rights steps when buying a house in the UK. The government also offers a range of easy-to-use calculators through its Money Advice Service, that can help you determine what you can afford and the likely monthly cost of a mortgage.
Putting in an offer
Once finances are in place, you can put in an offer on a UK property, which can be done verbally or in writing via an estate agent or direct with a private seller. Once an offer has been accepted, the seller is then responsible for drawing up the contract for the transfer of legal ownership. In England, Wales and Northern Ireland, the offer isn’t legally binding until contracts are exchanged.
However, in Scotland the standard process of buying a property in the UK differs, where offers are communicated through a solicitor. Visit the Scottish government’s Shelter website for more in depth information on buying property in Scotland.
Getting a survey
During the pre-exchange period, your lender will require you to carry out a survey on the property to establish any structural problems or issues that could affect the sale price. You'll usually need to pay for the lender's basic valuation survey – the cost varies by lender and property value but is usually a few hundred pounds. It is also advised to carry out a more detailed survey for which you can compare quotes.
You can compare quotes from surveyors in your area through the Royal Institution of Chartered Surveyors’ search tool.
Legal requirements for buying a house in the UK
A buyer will need to appoint a solicitor or conveyancer to handle the legal paperwork of buying property in the UK and carry out searches on the property.
Costs vary by area and/or the property value and include:
- legal fees
- land registry fees
- local authority searches
- drainage and environmental searches
- administration costs
Your solicitor will confirm the cost of the above fees. You can search the Law Society website for a solicitor.
Conveyancers will deal directly with each other to confirm the details of the sale, which will then be communicated to the buyer and seller. This process is called the pre-exchange period and both parties can withdraw during this time.
Once the exchange of contracts has happened, buyers will be required to pay at least 10 percent of the purchase price. Following this, the contracts become legally binding. Solicitors will then agree on a completion date, where the full funds are paid to the seller and legal ownership is transferred. The solicitor will transfer the funds; therefore, money should be transferred to them by you or your lender prior to the completion date.
UK stamp duty and other costs
The cost of buying a property in the UK includes a number of additional fees, such as UK stamp duty, that you should account for in your budget.
Here are some costs you must plan for when purchasing UK property for sale:
UK Stamp Duty
As of 1 April 2016, UK home buyers are subject to pay UK stamp duty on all property purchases more than GBP 125,000, which is calculated depending on the sale price.
UK stamp duty rates range from 2–10 percent on single property purchases, while additional homes or buy-to let properties will be subject to UK Stamp Duty rates of 3–13 percent. There may be exceptional cases where UK stamp duty is exempt, such as for properties in designated 'disadvantaged' areas or in new builds where stamp duty is paid by the developer.
You can estimate your UK stamp duty rates using any of the below government calculators:
Land Registry fees
These are paid to the UK government for the purpose of transferring the property’s legal deeds to a new owner. Find more information on costs here.
Lender’s mortgages insurance premiums
If you have a high percentage loan you may need to pay a one-off fee called a 'higher lending charge'. This protects the lender if you can't repay your mortgage. It's worked out as a percentage of what you borrow above the lender's higher lending charge limit, which is usually 80 or 90 percent of the property value. The premium can be high; ask your lender or mortgage adviser. You can usually add it to the mortgage, but this will increase your interest charges.
Removals or moving expenses
These vary according to where you live, the size of your property, how much furniture you've got, how far you're moving and how much packing you'll do yourself. It's best to get several quotes, and always check that your remover is properly insured. Find a removal company via Expatica’s listings of UK moving and relocation companies.
Monthly charges for buying UK property
Once you own a UK property, your monthly charges can include the following: mortgage repayments, monthly life insurance premium (which can be a prerequisite from lenders), building and contents insurance, council tax, utilities and regular bills. It's important to budget in these expenses, as they can influence your monthly payments considerably.
- Mortgage repayments: Your budget should account for the effects of potential interest rate changes on your monthly mortgage repayments. With 'interest only' mortgages, you'll may need to consider paying monthly payments into an investment fund to afford the loan upon completion.
- Life insurance or mortgage protection cover: You may be required to take out a life assurance policy, such as 'term insurance' or 'mortgage protection policy'. Monthly costs are relatively low and the insurance will cover your debt if you die before completing the mortgage. If you have a mortgage endowment policy, this should already include life cover. You can also pay insurance to cover your monthly repayments in the event you fall ill or are out of work, although this is more expensive. You can ask a mortgage adviser for details.
- Buildings and contents insurance: Once you exchange contracts, you're responsible for insuring your property. Some mortgage lenders will require you to take out buildings insurance, although you are not forced to buy their own.
Terms for buying property in the UK
- Conveyancing: Legal process for buying property in the UK.
- Freehold: Buyer owns and is responsible for the land and property, the most common form of UK properties for sale.
- Leasehold: Buyer owns the lease on the property but does not own the land, typical with apartments and some houses where there is a communal ownership of the land.
- Gazump: A legal situation that takes place when the property vendor has accepted an offer but proceeds on accepting another offer with a higher value.
- Gazund: When the buyer decreases their offer during the exchanges of contracts in the hopes that the vendor agrees with the lower offer.
Advice on buying UK property
- UK government's guide to buying or renting a property
- Scottish government’s housing website Shelter
- Government Help to Buy website for UK mortgages
- Government Land Registry website
- Money Advice Service website
- Right to Buy website
- UK government website for buying and renting government property
Click to the top of our guide to buying a house in the UK.
Find a house in the UK using Expatica's housing search.
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