Can foreigners buy property in London
London is the top destination when it comes to real estate investing. Being the largest financial centre in the world, London attracts many people to work and invest into the city. In addition to the shortage supply of housing and increasing demand, property price and rental rates are steadily increase year after year.
One of the question for investor who initially intending to invest in London is can foreigners buy property in London. There is no restriction for foreign investors who wish to invest property in London. As the global financial center, there is also no restriction on repatriation of funds when you wish to. One thing to note if you wish to take loan, investors from certain countries are hardly able to get loan. Please check with us if you are eligible for loan.
Here are the top 8 reasons why people invest in London
- Global financial centre
- 3rd highest number of billionaire in the world
- Most populous city in England and UK. In 2015, London population has reached 8.6 million in 2015.
- World renowned university in UK
- Great infrastructure system
- Stable property price appreciation over the years
- Stable rising rental rates over the years
- Supply shortage and increasing demand
Here are few things to look out when you are intending to invest in London property
- How far from the nearest tube?
- What are the amenities?
- Estimated travel time to the financial centre?
- How safe is the area?
- Estimated travel time to the top universities such as LSE, Kings College, University College London (UCL)
- Is there any regeneration plan from the government in the area?
- How far from the Crossrail (Game changer infrastructure)?
Usually walking distance between 10 to 15 minutes to tube station is a desirable location. Amenities nearby to fulfil the tenant daily needs such as supermarket, outdoor park, clinic, shopping centre, restaurant, café, and bar. Mode of transportation to the financial centre where your tenant works either via tube, bus, or river taxi, usually within 20-30 minutes is the maximum. Safety is one of the factors that investors often to forget, but this factor is actually one of the significant factor for tenant when they decide to rent your place. If you are buying the property for your children education, you need to check how far it is to reach via tube.
New important factors which determine good London property investment
London Crossrail is the new infrastructure which will significantly improve the travel time of the Londoners. This is the largest infrastructure investment in history of UK, it is expected to start operation in phases starting in 2018 to full service by the end of 2019. Spanning across east to west of London, London crossrail will cut travel time approximately by half.
Large scale regeneration is the second factor which will improve the community and determine the rental demand, rate, and property price appreciation.
According to analysis, property within 10 to 15 minutes walk to the upcoming crossrail station and large scale regeneration underway offers higher potential of property price appreciation.
Payment procedure
Deferred payment scheme is the usual payment method when you buy property in London. It only requires 20 – 30% upfront and the balance and stamp duty tax are payable upon completion of the development. Below are some of difference payment scheme examples
- Booking Fee £2,000
- Est. 3 weeks from booking (Exchange of contract): 10% less booking fee
- 6 months from booking: 10%
- Balance 80% and stamp duty tax upon completion
- Booking Fee £5,000
- Est. 3 weeks from booking (Exchange of contract): 10% less booking fee
- 12 months from booking: 10%
- 18 months from booking: 5%
- Balance 75% and stamp duty tax upon completion
- Booking Fee £5,000
- Est. 3 weeks from booking (Exchange of contract): 10% less booking fee
- 12 months from booking: 10%
- 18 months from booking: 10%
- Balance 75% and stamp duty tax upon completion
London stamp duty tax for foreign buyers
Property purchase price | SDLT rate from 4 December 2014 |
Up to £125,000 | 0% |
£125,001 - £250,000 (Next £125,000) | 2% |
£250,001 - £925,000 (Next £675,000) | 5% |
£925,001 - £1,500,000 (Next 575,000) | 10% |
Above £1,500,000 | 12% |
Starting April 2016, extra 3% stamp duty will be introduced for purchases of additional residential properties costing more than £40,000, such as buy to let properties and second homes. For more info, please visit our London property tax article.