Are you
buying house in UK? Before proceeding, here’s a guide to buying a home in the UK you must know of.
Well, there are various types of properties to buy in London. Mostly people who migrate there prefer
buying house in UK instead of renting one.
When you are all set for buying a house in London, you should know that the prices will vary based on the property and mortgages are available for those who are able to pay deposits.
This guide on buying a house in UK highlights these following topics.
○ Home ownership in London.
○
Buying house in UK good or renting that out.
○ Can expats
buy property in UK?
○ The property market and
house prices UK.
○ Costs of
buying house in UK.
○ Finding a perfect
property to buy in London, UK.
○ Selling a property in UK.
○ Resources for help.
Let’s start with the topics to elucidate the entire concept.
Home ownership in London
According to latest statistics, 52.8% families in the UK own home with 28.2% own properties outright and 24.6% with a mortgage. This figure is lower compared to EU average but higher than European countries including Germany, France, and Switzerland.
Home ownership rose to prominence in late 20th century because of the right-to-buy scheme that was introduced in 1980s. This scheme gave council tenants a chance of
buying house in UK at a discounted rate.
The average age of first time buyers has risen in last few years because of the increased prices.
According to a study by the Institute for Fiscal Studies, home ownership among young adults (aged between 25 - 34) has more than halved over the last two decades.
Buying house in UK good or renting that out
If you are planning to stay in London for a long term or you are certain about
buying house in UK, then buying that property will be a feasible solution as the record low interest rates on mortgages in recent years.
Renting out in London, UK can be a better choice for foreigners who are intending to stay only few years because it will be more difficult to recuperate stamp duty along with other expenses in short term and the potential capital gains tax of 18% - 28% on the time of selling the property.
However, renting also allows newcomers to get a feel for different neighborhoods and be in a position to put a quick offer on a property.
Can expats buy property in UK?
There are no legal restrictions on expats
buying property in London, UK. Even foreigners and non-residents including people who are residing in London for less than two years can get the mortgage.
However, people without a UK job may face more stringent requirements and that can make you pay a bigger deposit.
For more information on investing in properties, you can read this article UK Property - Are These Still A Good Investment?.
Generally, the same taxes apply on property and property related income for non-residents of UK. Stamp duty is paid at a same rate and capital gains tax will also be paid at same rate only if the property is sold at a profit.
The property market and house prices UK
There has been uncertainty regarding UK property market since the Brexit vote in 2016. Although the average property price in London, UK has remained quite stable.
Costs of buying house in UK
Prices in London are more expensive than in other major cities. So, when you are ready for
buying house in UK, you must know that the costs associated with the process can be split into two sections roughly - upfront costs and ongoing costs.
Upfront Cost
This includes….
*Stamp Duty:
This is paid on every property purchases over £125,000 at rate between 2% - 12% or 3% - 13% for second homes or buy to let purchases. You can estimate the stamp duty charge according to this ratio.
*Deposit:
If you take a mortgage to buy house in London, UK, then you will need to pay a deposit between 5% - 40% of the property cost.
*Mortgage Costs:
Various fees are associated with the mortgage including arrangement fee, booking fee, and valuation fee. And this will obviously add a couple of thousand pounds to the costs.
*Legal Fees:
To act on your behalf, you will need to employ a solicitor or conveyancer whether you take a mortgage. The fees can be upwards of £1,000.
*Land Registry Fees:
These fees are paid to the UK government for transferring the property’s legal deeds to a new owner.
*Removal Costs:
This costs of transferring your belongings from your old home to the new one. Based on the removal company, the cost will vary between £300 - £600.
On-going Costs
This includes….
*Mortgage Repayments:
After a month of buying your new home, you will have to start paying back your mortgage.
*Maintenance & Repairs:
If you buy a newly built home or a property in good condition, these costs will be reasonably low but still, you will have to budget for the things that are going or went wrong already.
*Insurance:
Building insurance or the home contents insurance are both considerations based on preferences.
*Leaseholder Costs:
Buying a leasehold property can lead you to pay additional charges as ground rent that can be £50 - £100 per year.
Finding a perfect property to buy in London, UK
When you are willing to buy a property in London, then you should know that the only place to go through different
house prices UK is commonly listed with real estate agents and on their websites, and on newspaper classifieds.
Property auctions are also helpful to find properties for sale, even scouting specific areas, looking for properties with “For Sale” signs outside and contacting the
real estate agent the house is listed with can be of great help.
Selling a property in UK
You can easily sell a property you own in London, UK any time. But when you have mortgage and are in negative equity, you will have to bear the loses yourself. Selling a home through an estate agent and you will have to pay their fees as a solicitor for acting in behalf of you throughout.
Resources for help
The 10 Most Important Factors to Know Before Buying Your Dream Home - Contains all the factors to know before
buying house in UK.
Buy-To-Let Properties in London Can Be the Smartest Investment Ever - Contains why buy to let properties are smart investment.
