Investing in property can seem daunting – doubly so if you’re buying as a foreign investor.
However, if you’re looking to break into UK property, here are some helpful tips that should ensure your investment isn’t a dud.
Find a property
Property prices in the UK vary considerably depending on where you look -so proper due diligence is critical for a successful investment.
This means thoroughly researching your options beforehand to ensure that everything about the property suits your needs.
You can do this in a number of ways.
- Once you’ve decided upon an area, you can contact a local estate agent,
- You can speak with a property investment company like RWInvest, to explore the latest trends and options. These companies can also assist with the trickier aspects of the process further down the line (more on this shortly),
- You can also browse opportunities through online property portals (such as Rightmove).
Property prices rise and fall over the years, and occasionally, exceptional levels of growth can be observed.
Luckily, the market is experiencing a bit of a boom at the moment.
In December, it was reported that 2021 was the year that the UK experienced a record-breaking rise in house prices to £254,822 on average.
Essentially, prices grew so much, and at such a fast rate, that it was also recorded as the country’s highest overall growth in 15 years.
When you factor in future predictions alongside this, it’s clear that this trend is seemingly only going to continue for the foreseeable future.
Experts predict that prices could further rise as high as 18.8% in the Northwest and Yorkshire by 2026 – with a 4.5% rise in 2022 alone.
Create a workable budget – and don’t forget about taxes!
For many, having the cash to buy an overseas property is not usually something they have in the back pocket of their jeans.
So, for those who don’t have this much on them to purchase a property outright, you may need to consider a buy-to-let mortgage.
While this is not necessarily impossible to obtain, it may be something that you could struggle with. Unfortunately, this is mainly because most UK lenders will be hesitant to provide such a mortgage to an overseas buyer and may even charge you a higher deposit for it.
To avoid this, you can use the services of specialist lenders or international banks to get help securing a UK mortgage for residential property. However, keep in mind that these organisations will consider whether to lend based on various factors, including age, income, and credit score.
One of the most critical aspects of this is ensuring that you familiarise yourself with – and adhere to – the plethora of taxes involved when investing in the UK property market.
This includes things like:
- Income tax
- Inheritance Tax
- Stamp Duty Land Tax
- Capital Gains Tax
Be sure to speak to a tax advisor to understand these essential taxes fully and ways to minimise the costs.
Get a solicitor
After finding – and reserving – your property, the next step is to get a solicitor.
Doing this is a vital part of this process, as your solicitor will be responsible for assisting you with the legal aspects of the investment.
This will entail researching any legal issues concerning the property and ordering a survey if needed to make sure everything is structurally sound within the property.
However, if you choose to go down the route of securing a property through a property company, usually you will be appointed a recommended solicitor – who has experience dealing with clients making similar purchases.
Consider Utilising a Property Management Company
Once you’ve purchased your property and you’re all set to start letting it out to your tenants, another thing that you may need to consider is hiring a property management company.
Property management companies, or rental management companies, are used by investors to manage the day-to-day duties of owning a rental property.
This includes typical landlord duties – such as finding tenants, responding to tenants’ queries, and dealing with any issues within the property.
