Buying and registering property in the UK

The British real estate market is very diverse and while London is overheating but set for good returns, buyers can also find good deals if they head northwards. Foreign citizens buying property in the UK have the same rights as the British and the whole process only takes 4–8 weeks.

How it works in the UK:

1. Find a property. A local real estate agency offers properties that match your preferences as a buyer. The city, district and your budget are the main things to take into account. Once you have found one or more options that interest you, the agency will arrange viewings. Don’t hesitate to ask your real estate agent any questions about the property, payment procedures or potential discounts.

There are agents in the UK whose role is to help buyers find property but who do not sell real estate. Investors can buy property databases from brokers if they do not want to engage the help of an agent.

2. Choose your lawyer. A lawyer will take care of your applications to local authorities and generally help you navigate the British legal system, facilitating your purchase and all the paperwork that comes with it. To become a client of a UK law firm, you must have a valid passport, proof of address (e.g. recent utility bills) and a bank statement proving you have available funds exceeding the price of the purchased property. It’s good to look into a few law firms as they may have specific requirements for potential clients.

3. Apply for a mortgage (if applicable). Even if you are not British national, you can still get a mortgage in the UK. There are various options available to you depending on what you intend to do with your property. If you want a loan, apply to the bank and get a statement proving the bank is ready to finance you (mortgage-in-principle). Ask your lawyer to verify your financing before you proceed.

4. Make an offer. Once you have found the property you want to buy, your agent or lawyer will draw up this document (an offer). At this stage, the promise to buy is not legally binding.

5. Do the due diligence. Your lawyer will review the real estate documents and confirm the accuracy of the seller’s details and the Land Registry records. If everything is okay, your lawyer will submit a report on property rights to you before the contracts are exchanged. We recommend engaging the services of a civil engineer to review the condition of the building and a surveyor to certify that the property is not overpriced.

6. Sign the preliminary sales contract and pay the deposit. The seller's lawyers will draw up a preliminary contract that your lawyer will check. The contract stipulates standard transaction terms and conditions including a non-refundable down payment amounting to 10% of the purchase price. If you change your mind and decide not to buy the property, the deposit cannot be used to buy a different property. Your lawyer will retain this amount until the transaction is completed. You then have to make a draft transfer deed. If you have taken out a mortgage, the lawyer will also verify that you can fulfil the loan requirements and that the bank is still willing to lend the funds to complete the transaction.

7. Sign the transfer deed and make the final payment. Once the transfer deed is executed and the final payment is remitted to the seller’s legal representative who retains all due fees and transfers the remaining sum to the seller. The deducted charges include mortgage arrears, legal fees and the agency’s commission. When the transaction is complete, the property rights will be transferred to you.

8. Pay the stamp duty. There is a maximum Stamp Duty Land Tax (SDLT) for individuals of 12% for purchases exceeding £1.5M. Companies buying residential real estate over £500,000 are charged 15%, while non-residential properties are only charged between 0% and 4%. This is payable to the Land Registry authorities.

9. Register your property. Your lawyer will take care of this step, using the receipt from your stamp duty payment to register your new property with HM Revenue and Customs.