Buying a house, particularly in another country, can be daunting.
If you are interested in buying a house in the UK, then the first thing you will want to know is, if as a foreigner, you can actually buy a property. The answer is yes.
Now how does it actually work?
Although some steps of the process may be similar to the way you would do in your country of origin other procedures may be completely different.
To give you an idea of what to expect when buying a house in the UK, here is a step by step guide to take you through the entire process.
Choose a property
First you need to find the right property for you.
There is a lot to choose from but if you are looking for a bargain here is a good place to start searching: https://www.propertyandmoreproperty.com/list_view.php?search_country=GB&search_type=&search_under=&Submit=SEARCH
If you decided on the property you want to buy, what do you do next?
Make an offer
You don’t want to offer too much and risk wasting money but you also don’t want to offer to little and risk loosing the right property.
Have a look at similar properties for sale in the same area; this will give you a good idea about the right price.
Once you know how much you are willing to spend, put in your offer.
If you are dealing with an estate agent, just tell him what your offer is. If bidding is by means of sealed bids, write down your offer, seal it in an envelope and give it to the estate agent.
He will then pass your offer on to the seller.
When buying a house in the UK some sellers will insist that you pay a small amount of cash to accompany your offer to show you are serious enough about it. Typically between £500 and £1,000.
This is a “holding deposit”
Make sure the deposit will be refunded in case the seller decides to sell to somebody else.
The deposit should not be paid directly to the seller but to his solicitor whom will hold it in an escrow account.
Since an offer is not legally binding, after your offer has been accepted the buyer may still pull out of the deal, most likely because he received a higher offer from elsewhere.
To avoid this, ask the seller to take the property off the market.
Arrange a mortgage
If you are not a cash buyer, ideally you should have a mortgage “agreement in principle” before you even place an offer.
Once your offer is accepted it’s time to go back to your mortgage company with the agreed offer and put your mortgage process in motion.
Hire a solicitor or conveyancer
Now you need to find a solicitor or conveyancer to handle the legal transfer of ownership.
He will do the required searches to make sure there are not any major problems with the property.
In some cases you can do the conveyancing yourself, but be ready to deal with a lot of complicated paperwork. The risk of getting it wrong is high and you may end up spending far more than if you had hired a professional.
A mortgage lender will require that a survey is done to the property.
If you are a cash buyer, legally you won’t need a survey done.
Unless you are very experienced with property, it’s better to get a full survey done. That will tell you all you need to know about the property and alert you to any potential problems.
You need to give a deposit of 10% of the sale price to your Solicitor or conveyancer.
Before exchanging contracts
When contracts are formally exchanged you are legally committed to buying the property and the seller is legally committed to selling it to you.
So, before this important step make sure:
- you have a property valuation approved by your mortgage lender
- you received the results of any surveys you asked to be done
- you have been formally offered a mortgage in writing
- you are satisfied with the results of all the relevant searches.
- you have organized a building insurance
- you have agreed on a date for the completion of the sale
- you have read, understood and signed the contract
This is done by both either solicitors or conveyancers reading out the contracts over the phone to make sure they are alike. After that they will immediately send them to one other in the post.
You are now legally committed to buy the property.
If you pull out after exchange contracts you will lose your 10% deposit and you may be sued.
Now you will need to make arrangements concerning the supply of electricity, water, gas, telephone, etc. It’s easier to simply change the account name for the existing suppliers.
The solicitor or conveyancer will inform the land registry that the ownership of the property is in the process of being transferred.
If you asked for a mortgage, the solicitor or conveyancer will also ensure the money will be ready for completion.
Completion day will usually be 7 to 28 days after the exchange of contracts, but in certain cases it can be done on the same day.
On the day of completion the money and the deeds are transferred between each side’s solicitors / conveyancers.
This is the day you receive the keys and take ownership of the property; often midday.
The solicitor or conveyancer will usually pay the stamp duty in your behalf when buying a house in the UK.
Stamp duty is to be paid up to 30 days after completion day.
Settling up with your solicitor / conveyancer
After completion your solicitor / conveyancer will send you an account including all his costs and expenses, the purchase price of the property and the value of the stamp duty.
Find more detailed information about the process of buying a house in the UK in this book: