Buying a home in the UK as an expat

Everything you need to know as an expat looking to buy a home in the UK

Homebuying in the UK as an expat

Buying a home in the UK is an appealing prospect for many, though the exact process of doing so isn’t always as clear as it could be. To help those unsure about the process, we’ve put together a comprehensive guide on everything you need to know about buying a home in the UK as an expat.

Can I buy a home in the UK as an expat?

Legally speaking, there are no restrictions on purchasing a property in the UK as an expat. There are also no legal restrictions on getting a mortgage as an expat, though those who have lived in the UK for less than two years may have to deal with stricter requirements (as well as potentially having to pay for a larger deposit). You’ll also need to appoint a solicitor or dedicated conveyancer to deal with the legal issues when you want to buy a property in the UK.

As a rule of thumb, taxes on property and property-related income are the same for expats and UK residents. This includes Stamp Duty Tax and Capital Gains Tax, which are paid at the same rate for expats if the property is sold for a profit. Non-residential landlords looking to purchase a buy-to-let property will have to pay additional tax on rental income in much the same way as resident landlords. You should however, be aware that you might be able to get a tax exemption if the income from the property’s tax is paid to your home country. This is only the case where the country in question has a double taxation agreement with the UK.

Finding a home

You can use OneDome’s property search to locate a home. OneDome’s property search works in much the same way as popular free-text search engines (such as Google). This means you can be much more specific about your property search. For example:

“Three bedroom property in Southampton close to train station and near good schools”

OneDome’s property search highlights the important details (close to train station, near good schools) and produces a bespoke selection of properties that match the criteria.

Funding a UK property purchase

You may not be able to outright afford a property at its face value. If this is the case, you will need to get a mortgage to help cover the costs. This can be from either a UK or international bank. For more information on mortgages and which mortgage might work for your needs, our mortgage guides can be found here.

Help to Buy

Help to Buy is a program created by the UK government to help homebuyers get a property they might otherwise be unable to get a mortgage on. You can find more information on Help to Buy here.

Breakdown of the costs of purchasing a property in the UK

When you buy a property in the UK, there are upfront costs and ongoing costs. The upfront costs include:

  • Stamp duty – any property worth more than £125,000 will incur Stamp Duty Tax when purchased, regardless of whether you’re a British national or an expat. The rate is around 2-12% (3-13% for second homes and buy-to-let properties).
  • Deposits – you may need to get a mortgage on the property you intend to buy. If so, you will have to pay a deposit of between 5-40% of the properties final value.
  • Mortgage fees – if taking out a mortgage for your new home, make sure you factor in the additional costs. These include the valuation, booking, and arrangement fees, all of which can add thousands to the overall costs.
  • Legal costs – it is essential you instruct a solicitor or dedicated conveyancer to complete the conveyancing of the property you wish to buy (it doesn’t matter if you have a mortgage or not, it must be done). The costs involved can be around £1,000, so be sure to consider this when calculating your budget.
  • Land registry fees – you will need to pay the land registry fees to the UK government. These fees relate to the transferring of property’s legal deeds to the new owner (you).
  • Removal costs – naturally, you will want to move some or all of your possessions to your new property. Depending on where you’re moving from, the costs can vary quite substantially so again, keep this in mind when working out how much your UK property purchase might cost overall.

The ongoing costs of buying a UK property include:

  • Mortgage repayments – if you needed to get a mortgage on your new home, you will need to ensure you can manage the mortgage repayments. These are often on a monthly basis, but there this is not a guaranteed structure and can vary quite a lot between different types of mortgages.
  • Property maintenance and repairs – for older homes, the costs of upkeep can be higher than some people expect. Older properties in general are far more susceptible to the ravages of time and you absolutely should prepare for significant expenditure to keep the property in check. On the other hand, purchasing a new-build property means your overall maintenance and repair costs will be lower.
  • Insurance – buying a property means you will need to insurance. This incudes building insurance and insurance for the contents of your new home.
  • Bills – other non-negotiable costs include your regular bills, such as council tax (which is determined by the area you live in and the total value of your property), gas, water, internet, etc.
  • Leaseholder fees – different to freehold properties, buying a leasehold property means you may have to pay additional fees like ground rent (£50-100 per year).

Homebuying process in the UK

Not withstanding unexpected circumstances, purchasing a home in the UK typically takes 2-3 months. Certain factors that can slow the process down are things like being in a chain of buyers and sellers, which is where they both have to wait for the purchase or sale of another property.

To avoid delays further down the line, make sure you get all of your finances in order. You need to guarantee that you can either afford the property outright, or the mortgage deposit if you need help financing the property.

The offer

If you have sorted your finances, you can make a formal offer the property you want to buy. You need to tell either the estate agent or the seller, either in writing or over the phone, however you prefer.

Upon acceptance of the offer, it is then up to the property seller to draw up a contract for the legal transfer of the property. At this point you can either offer the asking price, or attempt a lower offer. Be aware of important elements, such as whether the property has been on the market for a while. Also, if you choose to offer something under the initial asking price you do run the risk of being gazumped (which is where the seller sells to someone offering a higher price than you, even if your initial offer was accepted).

The legal stuff

Buying a property requires a substantial amount of legal leg work, which will be done by either a solicitor or a dedicated conveyancer. They will help you complete the necessary legal process known as conveyancing, which is the process of transferring ownership of a property from one party to another. Conveyancing fees typically cost around £1,000; you can find a break down the main disbursements here.

Surveying the property

You will need to arrange a valuation survey of the property you want to buy and this is usually coordinated by your mortgage lender. Alternatively, it could be worth commissioning an independent property survey that factors in things such as the potential maintenance and repair costs. It will be on you to pay for the survey, though it is important to remember that you could save money if the survey discovers anything that might reduce the value of the property (meaning you can offer the seller a lower amount, if you choose to continue with the property transaction).

The same goes for your mortgage; if the survey turns up problems and the property valuation reduces, your mortgage will need to be renegotiated so you don’t end up paying more in your repayments than you should.

Final steps

Once the offer has been accepted, you will need to pay the deposit and finalise the mortgage details. This is the final stage in which you could pull out of the sale, as the next step is the legally binding ‘exchange of contracts’. Pulling out of the sale at this point will mean you loosing some of the upfront fees involved in the mortgage costs.

If you intend to go ahead with the sale, this is where the exchange of contracts happens. Your solicitor will complete the process by handing the contract to the seller’s solicitor. After this is done, you will be legally committed to the sale and pulling out could result in the seller attempting to sue you. Of course, the same can be said of the reverse; if the seller pulls out of the sale at the last moment, you can potentially sue them for compensation.

Keys in hand

When the contracts are officially signed, the money for the property (which will be in the solicitor’s account) will be transferred to the seller’s solicitor’s bank account. You’ll receive the keys to your new home shortly; you also need to ensure your solicitor has been paid and any outstanding mortgage repayments have been made swiftly.

How can OneDome me buy property in the UK?

As well as helping you find a property, OneDome lets you complete every step of the homebuying journey online and in one place. For example, our online conveyancing platform lets you complete the conveyancing process without the usual mountains of paperwork. Trips to the post office and lengthy phone calls are drastically reduced as well, making conveyancing with OneDome a far more convenient experience than traditional methods. 

For more information on how we can help, visit our conveyancing page here, or get in touch with our team on 020 3868 6262.

Conveyancing with OneDome:

  • Compare quotes and reviews
  • Track your conveyancing progress 24/7
  • Get cover for your costs by up to £2,250 with buyers protection insurance, provided by Surewise
  • Send documents online, with full encryption for your peace of mind
  • Personalised concierge service can help guide you through each step of the conveyancing process

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If you’d prefer to talk to a our experts directly, you can call 0203 8686 262 between 09:00 and 17:00

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