Buying property in the UK as a non-resident can seem daunting – especially when you take the unpredictability of the past few years into account.
However, if you’re considering an overseas investment in the UK, here are a few helpful tips to help you on your way.
Find the Right Property
It probably seems quite obvious, but proper due diligence is vital to a successful investment when choosing a property.
This means researching your options beforehand and making sure that everything about the property your needs, and – if you choose to work with one – the company you are buying with is reliable.
First and foremost, location and the opportunity for capital growth is critical.
Property prices rise and fall over the years, and occasionally, exceptional levels of growth can be observed.
Luckily, the market is experiencing a bit of a boom at the moment.
In December, it was reported that 2021 was the year that the UK experienced a record-breaking rise in house prices to £254,822 on average.
To be a bit more precise – prices grew so much – and so quickly – that it was also recorded as being the highest overall growth for the country in 15 years.
When you factor in future predictions alongside this, it’s clear that this trend is seemingly only going to continue for the foreseeable future.
Experts predict that prices could further rise as high as 18.8% in the Northwest and Yorkshire by 2026 – with a 4.5% rise in 2022 alone.
Explore your Finance Options
For many, having the cash to buy an overseas property is not usually something they have in the back pocket of their jeans.
So, for those who don’t have this much on them to purchase a property outright, you may need to consider a buy-to-let mortgage.
Now, whilst this is not necessarily impossible to obtain, it may be something that you could struggle with. Unfortunately, this is mainly because most UK lenders will be hesitant to provide such a mortgage to an overseas buyer and may even charge you a higher deposit for it.
To avoid this, you can use the services of specialist lenders or international banks to get help securing a UK mortgage for residential property. However, keep in mind that these organisations will consider whether to lend based on various factors, including age, income, and credit score.
Understand the Taxes Involved
It’s clear then that, as a property investor, it’s essential that you factor in all the costs of owning and maintaining a rental property.
One of the most critical aspects of this is ensuring that you familiarise yourself with – and adhere to – the plethora of taxes involved when investing in the UK property market.
This includes things like:
- Income tax
- Inheritance Tax
- Stamp Duty Land Tax
- Capital Gains Tax
Be sure to speak to a tax advisor to understand these key taxes fully and ways to minimise the costs.
Consider Utilising a Property Management Company
Once you’ve purchased your property and you’re all set to start letting it out to your tenants, another thing that you may need to consider is hiring a property management company.
Property management companies, or rental management companies, are used by investors to manage the day-to-day duties of owning a rental property.
This includes typical landlord duties – such as finding tenants, responding to tenants’ queries, and dealing with any issues within the property.
So, there you have it.
Investing in UK real estate as an overseas buyer is not entirely impossible. However, it is essential to note that this is just an outline of the basics of UK property investment. To succeed, it’s crucial that you keep up to date will all of the latest trends, do your research and maybe – just maybe – speak with some experts.
All in all, try not to stress too much.