With the continuous QE of various governments, high inflation rate, low interest rate as well as the growing uncertainty and fluctuation in global economy, there are not left with much choices for people to invest into with a relatively safe and stable return. The world renowned hedge fund manager Ray Dalio commented that both cash and equities are not safe but trash indeed. He recommended that people should consider investing in some “real assets” like property and arts.
So, if you interested in investing in UK property market, what will be the basic requirements if foreigner would like to invest in UK property?
If you are interested in investing in UK property, Prop Home Ltd. is here to offer you any possible assistance. With our decades of experience in the property market and housing management, our specialists are ready to offer you detailed information and free consultation. Contact us today or give us a call any time when you feel convenient. We can even conduct a video conferencing that suits your time zone.
Qualification criteria and the basic requirements of UK property investments
Below we listed the checklist for you to have a glance if you are interested to invest in a UK property:
Evaluating what you can afford or how much you want to invest in is of vital importance. It is the very initial step that you should have in mind in investing in property and even on any other investment options. Be noted that an investment in UK property will likely to require an initial cash payment between 10% and 25% of the total value of the property. Other fees, say, government stamp duty, legal fees, property agency fees, exchange rate fluctuations should also be considered carefully.
Deciding the Location
UK is a large country and you will need to choose wisely the area within a region or city to buy your investment property. As an investor, you will probably look for a buy-to-let property. Then the location of the property will surely affect the return on investment (ROI). In UK property market, some regions and cities can render investors much higher ROI via rental income then city like London. Indeed, better ROI opportunities are likely to be found outside of the capital in emerging cities like Manchester, Liverpool, Birmingham, Leeds or even Glasgow. The city’s demographic statistics, employment rates, current and future development plan, transport infrastructure, emigration policy and oversea investors are all important factors that can influence the property’s valuation and ROI. Doing your own research is of course important and crucial; however, it will be also a wise choice if you can consult a specialist in the yield.
Choosing the Unit
If you have decided the location, for example, a certain area of a city, then you will need to make own your mind on the exact unit you will buy for. Be fully noted that the position, size, location, direction and view of the property are very likely to affect its rentability and hence, its ROI. Choose within your planned budget to get the best and available unit to boost your return in the long run.
Applying for Mortgage
As an investor for UK property, you are very possibly seeking for mortgage. In the time of currently low interest rate environment, using mortgage to leverage your investment can allow you to buy for a larger sum of properties (more properties or a higher valued property) in order to maximize your return. Therefore, you should try to identify or engage a mortgage broker that can offer some valuable advice and assistance to non-UK residents. Going directly to a lender like a bank is absolutely okay too but usually a broker can offer further useful information to save your time and provide more options like specialist lenders that can specifically provide mortgages to non-UK residents.
Legal Advice and Service
No matter you are a local or non-UK resident, you must engage with a UK solicitor to handle the paperwork, conduct searches and review the contracts of buying the property. Mortgage and property management agency will also wish you can appoint a trusted and approved solicitor to carry out the proper conveyancing process so that your rights can be fully protected.
Hiring the Property Management Agency
Once the purchase of the property is completed, you are likely to hiring a letting agent to manage your tenants and the property. A decent property management agency will provide service like finding tenant, contract assistance, collection of rental income and all other day-to-day as well as ad hoc property management support of the property. Depending on the level that you want them to manage the property, the total management fee will somehow range from 10% to 25% of the total rental income of the premises. The higher the fees may mean a better and guaranteed service like proven rental income for a given period of time, rental income protection if the said property is left empty for a certain period of time.
Speaking to the Specialists is of Vital Importance
As a non-UK resident, investing in the property in UK can be something quite complicated and difficult to start with. There are many nuances and terminology that are important to understand. With so much information and researches needed, the best choice is to speak to an independent specialist. It is normally the best way to get advice on what matters and what pitfalls one should avoid.
Prop Home Ltd.’s team of property specialists have decades of hands-on experience and expertise in the UK property market. If you need any service concerning or simply want some advice, do feel free to contact us for a free consultation. We can be reached by email at firstname.lastname@example.org and by phone number 0345 86 86 868.