Whether your expatriation to London is imminent or you have been there for some time, you may have nurtured the desire to become a homeowner by buying a property there. In any case, the steps leading to this type of investment in London include extensive research, advice from a legal representative and, of course, a significant amount of money.
Before buying a property in London
Becoming a homeowner in London is an interesting investment, however, before you spend your time (the process can take up to three months) and money, think about the reason for your purchase. Have you been seduced by the cultural and professional diversity and dynamism of the city? Has the city become your second home? Or do you consider London real estate as a simple investment opportunity? By defining your objectives, you will choose the ideal property.
Also take into account the ideal area where your property should be located. London’s suburbs are more affordable and the houses are spacious. However, travel time to central London is long, often tedious and expensive. For more information on this subject, read our article on London’s neighbourhoods.
Even if you are not a first-time buyer, note that the conditions and rules for buying real estate vary from one country to another.
It is essential to know the additional costs that such a purchase will entail, including taxes. In England, for the purchase of a property worth more than 300,000, you will pay stamp duty (SDLT). If this is not your first purchase, tax applies to all goods worth more than £125,000.
Finally, create a payment plan and define the desired payment method(s). For some it will be a cash payment, while for others, the only way to become a homeowner is to take out a loan from the bank.
You can only buy a house in London if you have resident status.
Buying real estate in London
Once you have made your offer to the seller (or his real estate agent), he must draw up a legal contract in order to transfer ownership of the property to you.
Attention: whatever the amount you pay initially and whatever the discussions and promises made between you and the seller or between your real estate agents, no offer is legally binding until both parties have signed and exchanged the contracts. If you or the seller decide to withdraw at a later stage, the other party is entitled to compensation.
The final steps are simple and include cleaning the property, leaving previous tenants or owners, and handing over the keys.
Key points on rental buildings
- Rental properties can provide a regular income,
- Mortgages “to rent” are generally more expensive than residential mortgages and require a higher deposit (25% or more),
- The lender will assess your future rental income to determine the amount it will lend you,
- Before you enter into a rental property, consider other recurring costs, such as maintenance, insurance and agency fees.