Siddharth Mahajan, London says, “Buying a property is always going to be stressful but now after the pandemic, the British real estate market is going to witness mammoth change in terms of policies as well as pricing. In the past few weeks the government has set out a complex set of new guidelines to help the British public, and economy, adapt amid coronavirus. Now experts claim the new rules will help boost the housing market.” Additionally, restrictions have been loosened on who can legally identify buyers and allowed deeds to be signed without in person witnesses. In totality, the British real estate market is set for evolution following the COVID 19 pandemic.
Before COVID-19 the housing market was enjoying its strongest start to the year since 2016. By taking these steps, the Government will give confidence to buyers, sellers and renters that Britain is reopening for business and they can do their bit to get the economy moving again
52% families in the UK own their own home according to latest statistics, with 28% owning properties outright and 20% with a mortgage. Decisions pertaining to housing require analysis of several factors. Read more to understand these better if you are a fence-sitter awaiting an opportunity to take the plunge.
Renting a property vs. buying a property in the UK
If you’re planning to stay in the UK long-term or you’re certain on a particular area, buying a UK house or apartment can be a feasible solution, particularly considering the record-low interest rates on mortgages in recent years.
However, according to Siddharth Mahajan London, renting in the UK may be a better choice for foreigners intending to stay only a few years, as it may be more difficult to recuperate stamp duty and other costs in the short-term, as well as potential capital gains tax if you sell. Renting also allows newcomers to get a feel for different neighborhoods and be in a position to put a quick offer on a house.
Can expats buy property in the UK?
There are no legal restrictions on expats buying property in the UK. Foreigners and non-residents can also get a mortgage in the UK, although those with less than two years of residency in the UK and without a UK job may face more stringent requirements and may have to pay a bigger deposit. See this guide to mortgages in the UK for more information. You will need to appoint a UK solicitor to handle the legal paperwork when buying a home in the UK.
Generally speaking, the same taxes apply on property and property-related income for non-residents as for UK residents. Stamp duty is paid at the same rate and Capital Gains Tax will be paid at the same rate if the property is sold at a profit. If you’re a non-resident landlord of a UK property, you’ll need to pay tax on rental income in the same was as resident landlords, although you may be able to get an exemption if you pay tax on this income in your home country and your country has a double taxation agreement with the UK.
Costs of buying a home in the UK
The costs associated with buying a home in the UK can be roughly split into two sections – upfront costs and ongoing costs.
Upfront costs of buying a home in the UK include:
- Stamp duty
- Mortgage costs
- Legal fees
- Land registry fees
- Removal costs
Ongoing costs of buying a home in the UK include:
- Mortgage repayments
- Maintenance and repairs
- Regular bills
- Leaseholder costs
Assistance schemes in the UK
The UK government has introduced the Help to Buy website to help potential homeowners take the rights steps when buying a home in the UK. Social housing tenants have the right to buy their homes if they’ve been a tenant for at least 3 years. The government also offers a range of easy-to-use calculators through its Money Advice Service, which can help you determine what you can afford and the likely monthly cost of a mortgage. More information on help when buying a home in the UK is available in our UK mortgage guide.
Exchanging the contracts
Siddharth Mahajan, London says, “If there are no problems or delays, you’ll receive the contract from the seller’s solicitor to sign and complete the sale. Check the contract details with your solicitor and ask for amendments if necessary. Once you’re happy with the contract, you can sign it. This means you are committed to the sale. The contract should include all key details such as price and completion date as well as any conditions for the sale.”