Purchase a home in London in 7 easy steps
If you’re curious, and have thought about owning a home in London, then this post might be for you. London homes are some of the most sought-after investment products in the world because of the dependable yearly capital growth, the amazing lifestyle along a diverse multi-ethnic population, the presence of excellent schools, the free healthcare, and an easy purchase process.
And with the British Pound currently facing a downturn not seen in more than 30 years, international buyers are finding it irresistible as evidenced by reports suggesting between 10-32% foreign ownership in prime and non-prime London areas.
So we’ve made it as easy as possible to understand the UK property purchase process, and even added in a few of our suggestions to help you along the way.
We recommend that you strongly consider buying a newly built home, direct from the developer, as it’s a far simpler process with seemingly less ongoing-cost after the transaction is finished, but the steps below apply both to new homes or re-sale homes (homes on the secondary market).
Determine the kind of financial impact you can expect
Before anything else, we encourage clients to speak to a financial advisor to get a better understanding of their finances and the financial impact associated to any purchase. In addition, they can also talk to you about other pertinent factors such as mortgages, exchange rates and possible tax obligations.
What are some of the costs you should be aware of?
Ask yourself, “What goal are you trying to reach by investing in property?”
Will the property serve as an investment or do you plan on making it a home? Are you aiming for solid rental yield, long-term capital growth, or both? These are some of the questions you need to be asking yourself so that we can source you a suitable purchase that fits your criteria.
Research about projects
Apart from the type of property you are looking to invest in, there is also the question of where, which is just as important. There are a variety of options in the market and it is vital to weigh the cost-benefits against potential risks.
Familiarise yourself with the specifics of the project, including construction and payment milestones, to create an investment plan you can be comfortable and, if necessary, flexible with.
Make your reservation
Making a reservation entails filling up documentation, providing identification and paying a reservation fee. It is at this point that your solicitor will begin to work on the legal process of transferring ownership between parties. As experts in the industry, we are able to recommend a number of established solicitors to guide you through a smooth transaction.
The exchange process occurs within 28 days of reservation, where you will be tasked to pay your initial deposit. In most cases this is 10% of the purchase price minus the initial reservation fee paid. Your subsequent payment plan to clear the balance will then be finalised which will include either staged payments or a final completion sum.
Apply for mortgages
Your financial advisor will advise on when the appropriate time to a seek mortgage will be. This is typically six months prior to completion of construction but can differ depending on the lender. Our in-house impartial mortgage brokerage are fully equipped to determine what your borrowing eligibility is and offer competitive mortgage products.
Completion and beyond
A completion notice of 2 weeks will be sent to you once the property is ready. You should advise your mortgage broker and your solicitor will do the rest. If you are planning on letting the property out, speak to one of our residential lettings consultants to start the process of finding a tenant before final handover of the property.
For interested parties, please contact email@example.com for a free discussion about the purchase and mortgage processes in the UK.