So you’re contemplating investing in British property from a foreign country, however you may be wondering if the process of purchasing property in the UK is the same as in your home country.
Overall, the fundamentals of investing in British property are similar to that of other countries, however it should be noted that there are some dissimilarities in various taxes among other aspects.
By the end of this guide we hope you have a good understanding of the process of purchasing property in the UK along with the advantages, current pitfalls and differences.
Decide: Invest and let, or purchase and live in, the property
One of the first decisions you must make is whether you will be purchasing property in the UK whilst staying in your home country or moving to, and working in the UK whilst investing in property.
Foreigners are able to purchase British property, however, it may be difficult to apply for a mortgage for an investment property in the UK as a non-resident.
That said, British mortgage providers are much more likely to lend against a property if you intend to move and work in the UK and use the property as your main residence.
If however you have the available funds, investing in UK property with no mortgage (i.e. all cash down) is a fairly straightforward process, whether it is an investment property or for your own residence.
Advantages of investing in the UK property market
If you are able to secure a mortgage or have sufficient funds of your own, purchasing a property in Britain can be a great investment.
In general, the UK property market has shown year on year growth, meaning that if you are investing for with a long term view, your assets value will grow by on average 2-5% per year.
Whilst capital growth is a major advantage of investing in British property, it should also be noted that certain areas of the UK produce very profitable monthly rental yields.
For example, you could purchase a property in the North of England for under £100,000 (~$130,000). Depending on how you have financed the property, you could expect a rental yield of around 12%. It should be noted however, that where property produces higher monthly yield, the capital gain won’t be as large.
If you are considering applying for UK citizenship, home ownership in the UK is viewed as advantageous during application.
Current pitfalls of the UK property market
Currently there is uncertainty surrounding the UK property market due to Brexit. However despite the uncertainty and current stagnant market, many investors are seeing a potential opportunity on the horizon – property prices may decline after a hard Brexit, meaning prices are much more attractive to first time buyers and investors po. hub.
There are not as many tax deferral options as there are in countries such as the USA. For this reason you should ensure you have a clear picture of how your investment will pan out over the years with the inclusion of all British property taxes.
Further to the above, the British government are contemplating introducing a tax on…
Continue reading the article about purchasing property in the UK on Enre Real Estate website.