Real Estate Purchase In UK | vizionproperties

Your Guide to Real Estate Purchase and Rent in London (United Kingdom)

Below are some of the answers to our clients’ most frequently asked questions. Unfortunately, this page cannot address all the issues of each real estate transaction; however, we will be happy to advise you on your individual situation and answer any questions regarding buying and/or selling properties in the United Kingdom and offer professional guidance throughout the entire process. Please feel free to contact Angela Olornshe with any questions about selling or buying real estate in London United Kingdom.

You are also welcome to call us at 44 7438617217 and our property consultants will be happy to assist you.

Can foreigners purchase property in Great Britain?
What is Freehold and Leasehold?
Shall I get dual citizenship, if I buy property in Britain?
What is the procedure of buying property in the UK?
What else shall I need to carry out purchase?
How can the money be transferred?
What should I know about survey?
How soon should the contracts be exchanged?
How does this procedure finish?
What taxes and fees should be paid when you buy property?
Is it easy to rent an apartment in London?
For how long can I rent an apartment?

1. Can foreigners purchase property in Great Britain?

The British law doesn't put any restrictions for foreign buyers. Moreover, foreigners can get a mortgage at an interest rate substantially lower than that in Moscow.

2. What is Freehold and Leasehold?

All properties in the UK are either Freehold or Leasehold.

A Freehold is the ownership of real property, being the land and all immovable structures attached to such land (buildings, trees, or underground resources). It means that the landlord owns not only the property but also the land, on which the property stands. This is opposed to a Leasehold in which the property reverts to the owner of the land after the lease period has expired.

Leasehold is a form of property tenure where tenant buys the right to occupy land or a building for a given length of time and is paying an agreed rent to the owner. Leases are often measured in decades or centuries (999 year lease is quite common) and can be bought and sold on the open market. This type of tenure normally refers to flats, when the landlord owns apartment in the building, but the land belongs to somebody else. In this case the owner pays ground rent, which is nominal and does not reflect the market value of this plot. Recently the Freehold (the ownership of the land) has often been transferred to management companies. In this case leaseholders obtain Shares of the Freehold. These management companies will manage the estate, maintain the communal parts and supply hot water and central heating if necessary.

3. Shall I get dual citizenship, if I buy property in Britain?

Tenure in the UK doesn't give landlord the right for permanent residence or any other privileges in terms of the British immigration law. But the experience is that it is much easier for property owners and their families to get multiple entry visas for 2–3 years. Getting permanent residence in the UK and obtaining British citizenship is a very complicated and long process. Please, consult qualified immigration lawyers for details.

4. What is the procedure of buying property in the UK?

Offer

Once the property is chosen, an offer should be made for it. Our knowledge of the market and established relationships with developers make us sure that we will negotiate the best possible price for you.

Contract

As soon as the price is agreed the case is transferred to the solicitors. All the transactions with properties in the UK are performed by appointed legal advisors. We will put you in touch with our long-term partners — solicitors with high records in property deals. The buyer’s solicitor receives a standard contract from the seller’s solicitor. After that certain searches need to be done. Searches are submitted to the local authorities to clarify if the property satisfies all the building regulations, if there are any developments that are commencing soon in the area, etc, and also to the seller in terms of boundaries, services, any covenants that are adjusted to this property etc.

5. What else shall I need to carry out purchase?

Due to money laundering laws in the UK, the solicitor will need to confirm your identity and perform various checks in to the source of the purchase monies before you sign a contract with them to act for you in the purchase of your property. The following documents are required by the solicitors, either as original documents, or as copies that have been certified by another solicitor or by a notary:

Evidence of your Identity: Acceptable documents include a current passport, current photo driving licence, National photographic identity card, birth certificate.
Evidence of your address: Acceptable documents include a recent utility bill, a recent bank or credit card statement, National photographic identity card.

6. How can the money be transferred?

Your solicitor will require further information and documentation in order to accept money.Your solicitors will require a letter from your bank from where you wish to transfer the money, confirming your identity and the source of the funds that you wish to transfer. In addition to these UK requirements, you must also check with your own bank as to their own local federal requirements concerning the transfer of money out of the country.

Additional information and documentation may be required depending on whether you are purchasing as an individual, as a company, as an offshore company, etc.

7. What should I know about survey?

When purchasing a house a structural survey or a homebuyers report (a brief type of a survey) should be prepared. A surveyor will assess the technical condition of the property, specify all the works that are required to be done and figure out its market value. Survey is required by all the UK banks in order to figure out the right amount of the mortgage. But even if you don’t require any loan from the bank to purchase your property, you still need a surveyor as the seller is not obliged to inform you about any damages that the property has even if they are aware of them.

8. How soon should the contracts be exchanged?

As soon as the survey is done and the price is agreed the solicitors of the both parties exchange contracts. This is a moment when legally binding contract comes in force. On the exchange of the contracts the non-refundable deposit is paid (usually 10% of the agreed price) and the completion date is agreed. The completion date is very important as every day of delay in completion is charged with substantial sums of money. The deposit is paid into a special client’s account of your solicitor and it is transferred to the account of the seller’s solicitor. It is advisable for the buyer to insure the property on the exchange of the contracts as well.

9. How does this procedure finish?

After the exchange of the contracts the transfer of property occurs. The transfer document TR1 is sent to the Land Registry in order to change the record of the ownership. The completion occurs when the outstanding balance is transferred from the account of the buyer’s solicitor to the account of the seller’s solicitors and the TR1 is executed. Upon completion the stamp duty is paid. The stamped document is sent with other documents to the Land Registry.

10. What taxes and fees should be paid when you buy property?

The main tax is Stamp Duty, which must be paid upon completion. The sum depends on the value of the property and according to the British law is:

up to £125 000 — 0%

up to £250 000 — 1%

up to £500 000 — 3%

over £500 001 — 4%

No stamp duty will be paid on properties up to £250 000 if the transaction is completed before 25 March 2012, but 5% stamp duty will be paid on properties more than £1 000 000 if the transaction is completed after 5 April 2011.

Other payments:

Legal services — from £ 1500 depending on complexity;
Survey — about £ 800–1500 (+ VAT) — strongly recommended when buying a house or wneh mortgage is required;
Agent charges for finding a property — usually 2% of the final value;
Registration of the purchase — about 0,1%;
Municipal requests — around £ 400;

11. Is it easy to rent an apartment in London?

It is easy enough because the market is huge and there are a lot of offers. But one of the features of this market is high liquidity. So it is worth starting to look for an apartment within a maximum of two to three weeks. If you find an option that satisfies you completely, the decision must be made quickly, as it is very likely that by the end of the day the apartment will be rented by another client.

12. For how long can I rent an apartment?

There are two types of rent — up to 6 months (Short Let) and over 6 months (Long Let). In fact, Long Let usually means a minimum of one year rental — landlords always try to minimize the additional costs of advertising and agent charges.

Renting a Short Let apartment in average costs 20–30% more expensive, but in most cases the price includes local tax and water bills, and sometimes even gas and electricity (if you're renting a Long Let apartment, you pay the bills yourself). The high price is also justified by the cost of additional advertising. Finding a decent Short Let apartment is a difficult job — 95% of landlords prefer long term leasing. If you are expecting to spend only 2–3 months in England, it is much easier and less money-losing to stay in a cheap hotel or serviced apartments.