How To Buy A House In The UK As A Non-Resident Or Foreigner

Man Holding Keys Beside a Pregnant Woman

The UK is an incredibly popular destination for immigrants and expats and good reason. It offers an excellent quality of life, access to a fantastic education system, a strong economy, many different kinds of job options, and plenty of diversity. If you currently live in the UK, but you aren’t yet a citizen or you’re not even really planning to become a citizen, you may feel like you’re stuck with a rental property, as buying a house in the UK as a foreigner seems far more complicated than you ever imagined. The reality, though, is that buying a house anywhere in the UK means accessing great mortgage rates and low monthly payments. It also means making a real investment in the country as a whole. Can a foreigner buy a house in the UK? If so, what’s the process of buying a house in a foreign country? This quick guide can help you understand more about buying a house in the UK as a foreigner and the steps you need to take to make it happen.

Buying a House in the UK as a Foreigner – The Simple Steps

So, can a foreigner buy a house in England? Absolutely. While it’s easier in some parts of the country than in others, on the whole, the process isn’t as complex as you’d imagine. First, it’s important to understand that there are absolutely no legal restrictions on expats or foreigners buying property in the UK. If you have less than two years of residency in the country and you don’t currently hold employment, you may have more trouble getting a mortgage loan to buy that property, but you shouldn’t have any real problem buying the property itself.

Before you explore the process, it’s important to understand the terms you’ll see in your initial property search. A converted is a building that underwent renovations so that it became flats instead of what it originally was. Imagine, for a moment, that there was once a three-story home, but now it’s three separate flats. That is labelled a “converted.” A studio is a flat that is a single room except for the bathroom. So, the living, dining, kitchen, and bedroom space are all combined into one. A maisonette is a house that has been split into two flats, but each one has its private entrance. A terraced property is attached to other houses. In the U.S., these are usually called row homes or duplexes. There are a couple of different versions of this idea. You can get an end-of-terrace property, which will be on the end of the row, or a semi-detached, where it is attached to a house on one side, but the other is not attached. A detached home, similarly, is a property that doesn’t share a wall with another single property. You’ll also see two other key terms as you shop. A leasehold property means you buy the right to live in a property for a certain number of years from a landlord, but you don’t buy the property itself. A freehold property is where you buy the property and the land it’s built on. You may also buy a share of a freehold property, which means you own the leasehold on a property and part of the building.

Now that you know a bit more about the terminology you might see in the ads, understanding the process of purchasing a home is the next step. Here’s a quick look at the process.

  • Find a Property You Love: Almost every search for a house, whether you’re in your home country or somewhere else entirely, begins with finding a spot you love. This isn’t hard in the UK. Start by thinking about the property size that might best fit your needs. You’ll want to think about the right number of bedrooms and bathrooms, to be sure, but if you need other spaces (like a big kitchen or a home office area), you’ll want to factor that into your search as well. Next, consider how much outdoor space you’d like. If you love spending time in the garden, make certain you select a property that allows you to do so. If you’d rather not be responsible for taking care of outdoor space, it may be useful to select a property that doesn’t require you to do so. Finally, consider areas in which you’d like to live. How close to public transport do you need to be? Do the area school ratings matter? Do you prefer to be near shops? Once you’ve considered all of this, you can begin shopping for properties. It’s important to note that in many parts of the world, this is the space where you might contact a real estate agent who would guide you through the entire property-buying process. That’s not the case in the UK, though. Instead, typically the buyer finds a suitable property and then contacts an estate agent to arrange a viewing.
  • If you’re happy with the property, the next step is to make an offer on the property. You can do this verbally or in writing, but your estate agent will help you here, because as in other countries, you can either offer less than the asking price or more and what you choose to do depends a bit on the condition of the property and how long it has been on the market. Properties in the UK frequently sell for less than the asking price, so it’s okay to make a lower offer, but understand that another buyer with a higher offer may scoop it up if your offer is too low.
  • Once you’ve made your offer and the other party has accepted, you’ll need to chat with a conveyancing solicitor. These individuals can be found in several places, even online, and the rates vary quite a bit. You’ll find, in most cases, that you’ll pay between £500-1,500 plus VAT for their services. They help to handle all of the legal paperwork around the sale. Be careful, though, because the cheaper a solicitor may be, the more likely he or she is to have some hidden fees you may not have expected.
  • Arranging the financing for the property is the next logical step. Some begin this process before they even start looking for a property, and that’s an acceptable way to handle things, too. It’s important to understand that every lender in the UK has their own set of rules for lending to non-residents, so while one lender may have a certain set of expectations, those may not hold for the next lender. Some lenders will require that your visa have at least two years left if they’re to lend to you. Others won’t lend to you at all unless you’re on a particular kind of visa like a Tier 2 or a Skilled Worker visa. Ask about those rules as you get started.
  • The other real variable among lenders is the amount you’ll be able to borrow as a non-resident. The total amount, as well as the Loan-to-Value ratio (sometimes abbreviated as the LTV), will vary. Some will require a deposit of at least 20% on a home. Others will cap the borrowing ability of non-residents at £200,000. Additionally, some lenders won’t consider your income acceptable if it isn’t paid in pounds into a UK bank account, and that could also affect your ability to borrow money. One of the most helpful things you can do is to hire a mortgage broker, particularly one who specializes in mortgages like the one you need. They can help you identify lenders with whom you can work and help you find the best rates. What’s more, though, is that working with one mortgage broker may save you an extensive amount of time because they’ll handle the research and identify a lender who will consider you based on your current visa status, your income level, and your deposit amount. You’ll want to be sure you get a “whole of market” broker. These individuals aren’t tied to a specific set of lenders, as some brokers are. Instead, they can work with any lender. Keep in mind that some brokers do charge for their services. You can, however, find fee-free brokers who make their money based on commissions from lenders, so you won’t have to pay them anything for their services.
  • Once you have a lender in place, you’ll need to get a survey of the property. Most lenders will arrange for their valuation survey, but you may want to take things one step further and get a full survey so you can account for any required maintenance or repair costs on the property. You will have to pay for this survey, but it could save you quite a bit of money in the long run. You can usually identify any issues that may help reduce the cost of the property. It’s important to note that in the UK, there are a few different kinds of surveys. A Royal Institute of Chartered Surveyors (or RICS, for short) condition report will help you understand the basic condition of the property. It’s the least expensive option. An RICS homebuyer report is a bit more detailed, and you’ll get a better understanding of the property itself. A full building survey is your best bet, though, and it’s ideal if you’re buying a much older home or one you know needs some repairs.

The last step is to finalise your offer. If you’ve had a survey done and found problems, you’ll want to work with your conveyancing solicitor to change your initial offer in light of the new information. At that point, you’ll exchange contracts. Once this happens, the sale becomes legal, and the two of you will set a date of completion. On that day, your mortgage provider will transfer the money from your mortgage to the seller’s solicitor’s account, and you’ll get the keys to your new home. Your conveyancing solicitor will register the sale with the Land Registry, and you’ll need to pay the bill, which will include fees like Stamp Duty.

How to Buy a House in London as a Foreigner (or Anywhere in the UK) – The Fees You’ll Pay

Now that you know a bit about how the process of buying a home in the UK works, it may be helpful to better understand some of the fees that are typically involved with homebuying in this country. One of the largest fees you’ll be expected to pay is Stamp Duty. This one creates quite a bit of confusion because of the way it is worded on Gov.UK. It defines a first-time buyer like this: “A first-time buyer is defined as an individual or individuals who have never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intends to occupy the property as their main residence.”

This means that you can’t be considered a first-time buyer if you owned property somewhere else. Even if you just owned part of the property (for example, if you inherited part of a property), you won’t be considered a first-time buyer, thus you must pay Stamp Duty on that property. There are many different Stamp Duty calculators available online, so you may want to run the numbers on prices in your range to better understand what this might cost you. You may even have to pay an additional surcharge because you’re a non-UK resident. It’s important that you understand this, as your conveyancing solicitor will make you sign a legal document about your history with the property and your liability to pay stamp duty when you initially begin working with them, and the last thing you want to do is commit fraud.

Naturally, you will also incur the costs that fit with the mortgage loan if you are using that method of financing for your property. You must pay a deposit on that loan, which will vary by lender, but could be as much as 40% of the property price. There are also several other expenses associated with the mortgage. You’ll need to pay an arrangement fee, a booking fee, and a valuation fee among others. Your lender should be able to offer you a fairly comprehensive list of fees at the outset of the process.

One of the fees you will pay is that of your conveyancing solicitor. You can expect to pay for the service itself, but often there will be additional fees. Typically you can expect a fee for the settlement, various searches that need to be performed on the property, and other administrative expenses.

One final fee you may need to pay is the Land Registry fee. You’ll have to have the property’s legal deed transferred to you, so you’ll need to pay the Land Registry to do that. Typically your conveyancing solicitor can handle that cost for you.

In addition to the fees you may pay in the UK, you’re likely to face some fees in your home country as well. For example, you may end up with capital gains taxes in the United States because Americans living abroad are still responsible for their taxes in the United States. Even if you claim tax residency in the UK and pay income tax to the HMRC, you still have to file a US tax return, so you may be required to pay tax on the gains of the sale of your UK residence. Check with your home country to learn more.

Making Your New House Feel Like Home

Once you’ve purchased your house and received the keys, there are only a few things left to do. First, you’ll want to obtain insurance for your home. There are a couple of different types of insurance in the UK. You want insurance that will cover both the house and your possessions. These two kinds of insurance are called buildings and contents cover. You can take out separate policies or you can take them out together. Buildings insurance covers the actual structure of your home and the fittings that are fixed. Contents insurance covers what’s inside your property. You want to make sure you have enough building insurance to cover the cost of rebuilding your home where tragedy strikes due to fire, flood, or vandalism. Contents insurance is designed to cover the cost of replacing your belongings if they’re stolen or damaged. An indemnity policy pays for the item’s value less wear and tear. For example, if you have a laptop you purchased three years ago for £800, you would probably get a smaller payout than you initially paid because it’s an older model. You can also purchase a new-for-old policy. That pays you the cost of a new item. In most contents policies, you can cover furniture, cookware, flooring, curtains, refrigerators, washing machines, dishwashers, electronics, art, jewellery, clothes, and garden equipment. If you have particularly valuable items like artwork, though, you’ll want to insure the entire value, so speak to an agent about that. There are some optional extra coverages you can purchase too.

Besides setting up your insurance coverage, you’ll want to make certain your utilities operate as well. You choose your internet and electricity provider in the UK. The electricity market in the UK is privatized, and six main companies provide services. You choose between fixed and variable rates. You can do some comparison shopping at various places online to decide where to get your power. You’ll get started, though, by contacting National Grid to arrange a connection. From there, you’ll contact a UK electricity supplier. The average cost is 20p each day for electricity. If your home requires a gas connection, it, too, is privatised, so you’ll need to go through the same process of choosing a provider. In some cases, you can bundle your gas and electricity services. In most cases, you won’t need to go through this process for water, as you’ll likely have to use your local water company. You’ll simply phone them to create a new account. If you want internet, you’ll have several different choices, and each provider offers a large range of packages you can select. You’ll need to think about your download speed before you purchase a package. Often you can bundle services together like a TV subscription and landline speed. Most providers offer installation services as well. TV services work a bit differently in the UK, too. You’ll need to look to see which TV services operate in your area, then choose the appropriate provider to meet your needs.

The Bottom Line – Can a Foreigner Buy a House in London or Other UK Cities?

If you’re not from the UK, you can buy a home nationwide. The key is understanding the process and how your lending options may differ from current UK citizens. That will help you better connect with the providers you need on your home ownership journey. Just remember to look for those who can help non-citizens find the right home and the right home loan so you get exactly what you need!

We are proud members of...

  • NAPB
  • RICS
  • The Property Ombudsman
  • Trading Standards

We are proud to be the most regulated property buyer operating in the ‘Quick House Sale’ industry. We are an active member of the NAPB (National Association Of Property Buyers) and are RICS regulated, which means you can have every confidence of selling your home with us quickly & easily.