The expat’s guide to purchasing property in the UK

New to the United Kingdom? Here's everything you'll need to know about making your first property purchase here in the UK.

Xe Consumer UK

June 11, 2021 9 min read

Realtor showing a property to an expat family in the United Kingdom

If you’ve just arrived in the UK, you may have a hard time finding the perfect property to buy. It generally takes around 2 to 3 months to buy a house, and can be even trickier when you’re new to the country.

Most people buy property in the UK for personal use or to grow their investment portfolio. And despite Brexit concerns, the UK housing market has remained stable.

In March 2021, the UK experienced its highest annual growth rate since August 2007. There was a 10.2% increase in average house prices between March 2020 and March 2021. The highest house prices were in Wales (11.0%), Scotland (10.6%) and England (10.2%). London had the lowest annual growth rate (3.7%).

How to purchase property in the UK

1. Know your goals and set a budget

Expats buy property in the UK for 3 reasons: to live in, to rent, or to sell for profit. So what’s your goal? If you’re buying property for rental yield, you may need more money than you would if you were buying a house to live in or to resale--especially if you want to start making money right away. It’s also important to set a budget because you’ll know which property you can afford and which one you can't.

2. Do thorough research

If you don’t want to experience buyer’s remorse down the road, you need to do some research first. Research the properties you’re interested in and their locations. You can get a lot of information about an area online, but we recommend visiting the place a few times before making up your mind. Go at different times of the day on different days of the week. If you’re planning ahead, you can go at different times of year.

Walk around the streets and visit the local shops, restaurants, and cafes and talk to people who live there. Locals who know the area well will give you honest answers and opinions. The location of a property greatly affects its value, and research will help you know which property is worth spending money on and which one isn’t.

You can also visit local governments and find out if there are any upcoming developments as these can drive up property prices. Also, find out the remodeling restrictions, neighborhood amenities, and the crime rates.

3. Understand the costs

There are 2 types of costs associated with buying property in the UK: upfront costs and ongoing costs. Upfront costs are paid once and include land registry fees, legal fees, and stamp duty. Ongoing costs are related to insurance, regular bills (such as council tax), maintenance, and repairs.

You will have to pay land registry fees to the UK government to transfer the property’s legal deeds to you. In case you decide to hire a conveyancer or solicitor to act on your behalf, you’ll have to pay legal fees.

The UK government charges stamp duty on all property purchases over £125,000. The rate is between 2-12% for new buyers and 3-13% for buy-to-let purchases or second homes.

4. Check out the property before making a commitment

After settling on a property, take time to go examine it from top to bottom. You can request a property agent or the seller to show it to you, but you’ll have to make an appointment first. Make a list of questions to ask and things to check.

If you see exterior cracks and tilts, uneven or bouncy floors, or water damage concealed by paint, forget about the property. If you like what you see, find out the property’s age, its size, the lot size, the interior floor plan, and the heating and cooling system.

If you have a busy schedule, you can request for a virtual property viewing as some estate agents offer remote viewings. However, you won’t be able to get in-depth information as you would with an in-person visit. 

Make an offer

Once you make up your mind about a particular property, make a formal offer. You can do it verbally, through the estate agent, or via email. Email is fast and provides a written record.

To determine your offer price, consider how long the property has been on the market. Also, consult the property agent or speak to another property adviser. When making a bid, don’t quote a very low price—you risk losing the property to another buyer.

To hasten this part of the process, have the money ready. If you’re new to the UK, you can send money from your bank account back home to a UK account via Xe. The last thing you want is to lose the house because of unnecessary delays.

Want to learn more about sending money with Xe? Check out our in-depth guide—or you can go ahead and get a quote now.

Get a quote

6. Hire a lawyer

If the seller accepts your offer, you may need a lawyer. You can ask the estate agent to recommend a few, request quotations, then choose one. A lawyer will draw up the contract to transfer the property’s legal ownership to you.

In Wales, Northern Ireland, and England, the offer becomes legally binding when you exchange contracts. In Scotland, buyers only communicate offers through solicitors. A lawyer will also check with the local authorities to identify any developments that may affect your property’s value. Solicitor fees vary, but many charge an hourly rate.

Where can you find the best properties for sale in the UK?

  • On online real estate websites: popular websites include Rightmove and Zoopla. With Rightmove, you can compare properties for different agents and filter them by location or price.

  • On the websites of real estate agents. In newspaper classified ads

  • At property auctions

Any property listing in the UK features the seller’s contact details or their estate agent’s.

How to find real estate agents in the UK

Real estate agents always know the best properties and the best deals, so talk to them if you want to get a good property. They streamline the buying procedure, making it quick and hassle-free. They also have extensive knowledge of specific areas and can customize their offerings to meet your specifications. They can arrange for viewings and help negotiate property prices.

If you decide to buy a house through an estate agent, find out what their services include. Some can arrange for mortgages and offer solicitor services. You may not have to pay them a fee because they usually get paid a commission by the seller. But some may charge a fee for their services, so you need to be aware of the costs.

There are many estate agents in the UK, and you can hire more than one. Whichever one you settle for, ensure they’re a member of the National Association of Estate Agents. Some popular estate agents include Strutt & Parker, Savills, Purple Bricks, Foxtons, and Your Move.

What about financing your property purchase?

The UK doesn’t impose any legal restrictions on expats buying property in the country. Non-residents and foreigners can also get a mortgage. But people who have lived in the UK for less than two years face more stringent mortgage requirements and pay a bigger deposit.

Determine beforehand how you’ll pay for the property. If you are taking a mortgage, it may take some time for it to be approved, so begin the process early. The mortgage provider will need your ID, bank statements, proof of address, utility bills, and proof of income. You’ll also have to pay a booking fee, arrangement fee, and valuation fee. In the UK, a mortgage deposit ranges between 5-40% of the total property cost

If you get approved for a mortgage, you’ll need to pay a deposit. The mortgage lender will give you 7 days to accept their offer. If you have any doubts, don't sign on the dotted line. If you change your mind after signing the mortgage agreement, you’ll lose the upfront fees.

What to know about getting a survey

A property survey helps a mortgage provider estimate the property’s value. It also helps you identify issues that may need fixing. You pay for the survey, but it can save you money, especially if the property has major issues.

There are three main types of surveys:

  • Building or structural survey. It’s the most expensive survey and costs around £600. It's recommended for older homes or those in need of repairs.

  • RICS homebuyer report. This costs about £400. It is more detailed and provides a market valuation of the property.

  • RICS condition report. It’s a basic survey used for new-build homes. It costs £250 and doesn’t provide any advice or valuation.

If a survey identifies problems with the property, or the surveyor values the property lower than the asking price, you can renegotiate the price. Your mortgage provider may also reduce the mortgage amount.

Double-check the contracts and only sign once you’ve gone through everything. You can ask for amendments if you’d like something changed. After signing the contracts, your lawyer will transfer the money to the seller’s solicitor’s account then you’ll be given the keys to your property.

What's next?

Once you've closed on your property purchase, you'll likely feel as though a big weight has lifted from your shoulders. But as you make your payments—be they the down payment, mortgage payments, repairs or any other costs—it's crucial to have a reliable method of exchanging your currency so you can send money quickly and reliably, while saving money all the while.

At Xe, we're here to be that trustworthy money transfer method for you. With almost 30 years in the currency business, we're ready to help you secure favourable rates for quick and easy transfers to or from the United Kingdom.

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