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Can foreigners buy a property in the UK?

RAW Mortgages focuses on lending to non-UK resident individuals, trust and companies against buy-to-let property in the UK. Purchasing an investment property can be a lengthy process, but we’re here to make it simple.

 

Are foreigners allowed to buy property in UK?

Many international investors regard purchasing residential property in the UK as a sound investment strategy, and you can still purchase UK property even if you aren’t a UK resident or are an expat living abroad.

RAW lends to non-UK residents all over the globe, and currently our loan book contains borrowers in 60 different countries!

 

Do foreign investors need a visa to buy UK property?

No, you do not need to have a visa to purchase a property in the UK. However, not all lenders consider non-UK residents, and the range of products may be more restrictive.

As a specialist lender, we are more than happy to lend to consider lending to foreign investors, you can view our mortgage offerings here.

 

How to buy a house in the UK as a foreigner

 

Guide to buying an investment property in the UK

Once you have decided to invest in property, one of the first things to do is to figure out what the costs associated with the investment are – these consist with upfront costs such as surveys, legal fees and Stamp Duty Land Tax (SDLT), as well as ongoing costs such as insurance, mortgage interest payments, and utilities to name a few.

Having considered these, and factoring in expected rental income, you can then determine what value of property to invest in based on how much capital is available to you, and how much loan capital you can obtain. RAW can lend up to 60% loan to property valuation (known as “LTV”).

An investment property can then be selected, taking into consideration a multitude of factors such as location, age, freehold or leasehold and nearby amenities. A reservation fee or a deposit is often required in order to reserve a property, particularly if it is newly built. At this stage, most borrowers then begin to search for a suitable mortgage provider to secure the necessary financial facilities for the purchase. 

 

Who is eligible to buy property in the UK?

You don’t have to be a UK resident to purchase a property in the UK. So, whether you are a UK resident, UK expat or foreign national, you can look to purchase a property. Whether you are eligible for a mortgage on the other hand depends on multiple factors, including your background and your financial position.

 

Buying property as an investment

 

What to look for when buying a UK property as an investment

At RAW, while all situations are considered, we prefer to lend against good quality property in a decent state of repair located in major towns and cities in the British Isles. These types of properties are more attractive to potential tenants and to prospective buyers.

Energy Performance rating:

In the UK, residential property that is bought, sold, or rented, requires an Energy Performance Certificate (EPC), which summarises and rates the energy efficiency of buildings and provides recommendations on how to improve the rating. They are rated between A and G, with A being the highest, a low EPC rating could prevent you from letting out the property and be more expensive to maintain.

Typically, the properties we lend against have been built by major developers during the last 10 years. They benefit from modern building control standards, planning controls, and new home warranties. They also tend to benefit from higher energy performance and lower environmental impact than older properties

Property location:

Depending on the people you wish to rent to, you may want to consider property that is located in decent residential locations with easy commuting of major towns and cities, as easy access can be attractive to tenants. Further, easy access to green space and retail can be associated with a higher quality of life.

 

Do foreigners pay property tax in the UK?

Stamp Duty Land Tax (SDLT) is tax that you pay when purchasing a property in the UK that is above a certain value.

As of April 2021, those who are not resident in the UK and purchasing residential property in England and Northern Ireland pay rates which are 2 percentage points higher than UK residents. This also applies to certain UK companies that are controlled by non-UK residents.

Individuals are classified as non-UK resident when considering stamp duty in relation to the transaction if they are not present in the UK for at least 183 days during the 12 months before their purchase.

If you are purchasing a second home or buy-to-let property, alongside the 2% surcharge for overseas buyers, there is also an additional 3% levied on the purchase of buy-to-let property, and second homes.

You can calculate how much SDLT you would expect to pay, here

 

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