Buying Property in UK from Overseas | Complete Guide

buying property in uk from overseas

Can you buy a property in the UK from overseas?

Yes, you can buy a property in the UK from overseas. 

Whether you’re a foreign national looking to invest in the UK property market or a British expat looking to return, there are plenty of options available to you.

The UK mortgage process can be more stringent, especially with high-street lenders who may only accept a limited number of non-standard cases. However, it is still very much achievable to secure financing while living overseas.

How does it work?

Let’s start by looking at the mortgage process. Obtaining a mortgage as a non-UK resident can be a bit more complex than for a UK-based buyer. 

High-street lenders generally have more stringent criteria and accept fewer non-standard cases. However, there are specialist mortgage providers and brokers who cater specifically to the needs of overseas buyers.

The first step is to get pre-approved for a mortgage. This involves providing information about your income, assets, credit history, and the property you plan to purchase. 

The lender will assess your eligibility and provide an indication of how much you can borrow. It’s important to do this before you start house-hunting, as it will give you a clear budget to work with. 

Working with a specialist broker, like UK Expat Mortgage, can give you a clear picture of how much you can borrow before you apply, based on your country or residence, salary, income type, deposit, and more. 

Once you’ve found a property, the next step is to complete the mortgage application. This will require submitting various documents, such as proof of identity, income, and assets. 

Lenders may also want to see evidence of your experience in the UK property market, if applicable. The application process can take several weeks, so it’s important to factor this in when planning your purchase timeline. Again, a specialist mortgage broker can help you with every step of your application, and sometimes it’s actually required to use a broker with certain lenders – particularly international building societies. 

In terms of the actual purchase process, this will largely mirror the process for UK-based buyers. 

You’ll need to engage a solicitor or conveyancer to handle the legal aspects of the transaction, and you’ll also need to pay stamp duty land tax (SDLT) on the purchase. The key difference is that you may need to factor in additional costs, such as currency exchange fees and international money transfers.

You will also pay slightly higher mortgage rates generally as a non-UK resident, but they are not overly-expensive. They are simply priced higher due to the risks to the lender of working with international documents, currencies, and legal frameworks. 

Case Studies

Navigating the Mortgage Process as an Overseas Buyer

One of the challenges for overseas buyers is securing a mortgage. 

British high-street lenders are often be more cautious about lending to non-residents, as they may perceive a higher level of risk. However, there are specialist mortgage providers and brokers who cater to the needs of international buyers.

When applying for a mortgage as an overseas buyer, you’ll typically need to provide the following:

  • Proof of identity (passport, national ID card, etc.)
  • Proof of income (employment contract, bank statements, tax returns, etc.)
  • Proof of assets (savings, investments, property, etc.)
  • Details of the property you plan to purchase

Lenders may also want to see evidence of your experience in the UK property market, if you have any. This could include details of previous investments or evidence of your research and knowledge of the market.

The mortgage process can take longer for overseas buyers, as lenders may need to carry out additional checks and verifications. It’s important to factor this into your timeline when planning your purchase.

One option to consider is using a mortgage broker who specialises in international mortgages, such us ourselves. We can guide you through the process and help you find the best lender and mortgage product for your needs. We can also advise on any additional costs or requirements you may need to factor in.

Advantages of Investing in UK Property from Overseas

One of the key advantages of investing in the UK property market from overseas is the potential for capital appreciation. 

The UK has a stable and well-regulated property market, and property prices have tended to appreciate over the long term. This can make it an attractive investment for foreign nationals, particularly those looking to diversify their portfolio or prepare for a future move to the UK.

Additionally, the UK’s rental market is well-established, and there is strong demand for rental properties, particularly in major cities and urban areas. This can make UK property an attractive investment for overseas buyers looking to generate rental income.

For British expats or foreign nationals with ties to the UK, investing in UK property can also provide a foothold in the market and a potential future home. If you’re planning to return to the UK at some point, owning a property can make the transition smoother and provide a more stable financial foundation.

However, it’s important to remember that investing in UK property from overseas does come with some potential downsides. The process can be more complex and time-consuming, and there may be additional costs and tax implications to factor in.

Tax Considerations for Overseas Buyers

As a non-UK resident, you’ll be subject to the standard Stamp Duty Land Tax (SDLT) rates on the purchase of a property in the UK. 

In addition to SDLT, you may also need to consider capital gains tax (CGT) on any future sale of the property. As a non-resident, you may be liable for CGT on any gains made from the sale of the property, at a rate depending on your total taxable income.

Other considerations

Another consideration is the timing of your purchase. As the mortgage process can take longer for overseas buyers, it’s important to factor this into your timeline and ensure you have sufficient funds available to complete the transaction within the required timeframe.

Preparing for the Purchase

When buying a property in the UK from overseas, it’s important to start the preparation process well in advance. Here are 6 key steps to consider:

  1. Get pre-approved for a mortgage: As mentioned earlier, this is a crucial first step. Speak to a mortgage broker or lender to understand your borrowing capacity and get pre-approved before you start house-hunting.
  2. Research the UK property market: Familiarise yourself with the current market conditions, property prices, and trends in the areas you’re considering. This will help you make an informed decision and negotiate effectively.
  3. Engage a solicitor or conveyancer: Hire a reputable legal professional who has experience in handling international property transactions. They’ll be able to guide you through the process and ensure everything is handled correctly.
  4. Arrange currency exchange and international money transfers: Work with a currency exchange provider to get the best possible rates for transferring funds from overseas. This will help you minimise the impact of exchange rate fluctuations on your purchase.
  5. Consider the tax implications: Seek advice from a tax professional to understand your tax obligations as a non-UK resident, including stamp duty, capital gains tax, and any other relevant taxes.
  6. Plan for additional costs: Factor in expenses such as legal fees, survey costs, and any potential renovation or maintenance work that may be required.

FAQs

Can I buy a house in the UK from overseas? Yes, it is possible to buy a property in the UK even if you don’t reside in the UK. Many people, both expats and foreign nationals, purchase UK properties for investment, vacation homes, or future relocation.

What is the tax on foreigners buying property in the UK? As a non-UK resident, you will be subject to the standard Stamp Duty Land Tax (SDLT) rates on the purchase of a property in the UK. There may also be additional taxes and fees to consider, such as capital gains tax on the sale of the property.

Can I stay in the UK if I buy property? Buying a property in the UK does not automatically entitle you to a visa or residency. However, if you are planning to move to the UK, purchasing a property can be a helpful step in the process of obtaining the necessary visa and residency permits.

Can a non UK citizen buy property in UK? Yes, non-UK citizens are eligible to purchase property in the UK. The process may be more complex, but it is entirely possible for foreign nationals to buy a property in the UK.

Can you be a first-time buyer in the UK if you own a property abroad? If you have previously owned a property outside of the UK, you will not generally be considered a first-time buyer in the UK. 

How long do you have to live in UK to buy a house? There is no set requirement for how long you need to live in the UK to be able to buy a property. As a non-resident, you can purchase a property in the UK, but you may face additional challenges when it comes to securing a mortgage and navigating the purchase process.

What is the cheapest way to buy a house UK? The cheapest way to buy a house in the UK is generally to save up a larger deposit, as this will result in lower mortgage payments and interest rates. Additionally, exploring options like shared ownership or using a Help to Buy scheme can also help make home ownership more accessible.

What credit score do I need to buy a house in UK? There is no single credit score requirement for buying a house in the UK, as different lenders have their own criteria. However, as a general rule, the higher your credit score, the better your chances of being approved for a mortgage and securing more favourable terms.

How UK Expat Mortgage Can Help

Our Service

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Specialist Expat Mortgage Broker

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Independent, Whole of Market Advice

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Dedicated Support From Expat Specialists

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Complex Income Accepted

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Residential & Buy to Let Options

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Access to High Street Banks, International Building Societies & Specialist Lenders

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We Compare The Market For Every Client

How It Works

Consultation

Book a free call with one of our expat mortgage brokers so we can explore your borrowing potential. We’ll need to know where you’re based, your income situation, and your property aspirations.

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Compare

If you’re eligible, we will compare options from multiple expat lenders, from high street banks to international building societies, to find the best fit for your situation. We are whole of market and fully independent.

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Agreement In Principle

When we’ve found the best terms for you, we’ll present you with your options and provide your Agreement in Principle to solidify your buying position.

Application

We’ll submit your full mortgage application. We do the heavy lifting, keeping it as simple and stress-free for you as we possibly can – and we’ll keep you updated every step of the way.

Completion

Enjoy your new UK property, with the peace of mind that you got the best deal on the market for your mortgage.

Residential Expat Mortgages

​ Borrow from £100k

 Up to 80% LTV

 New purchases and refinancing

Complex income accepted

Buy to Let Expat Mortgages

Borrow from £100k

Up to 75% LTV

New BTL purchases and refinancing

Rental income and salary accepted

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