The purchasing process

In England, it is very common to visit the property at least twice before making the final purchase decision. When you decide that a property is the right one, then you can make an offer through your real estate agent. It may be the amount at which you have estimated the property and does not necessarily have to correspond to the selling price charged.

Even if it may have financial benefits, it is a dangerous game because there is no guarantee that your offer will be accepted. Especially if someone else also has views on the property and has also made an offer. That being said, sellers make their decision on criteria other than price because sometimes there are factors worth more than a few thousand pounds. As a buyer, you are in a particularly strong position if, for example, you are free (i.e. you do not have a property to sell to finance the purchase of another) or you buy cash (i.e. you do not have a loan). In these cases, there is a good chance that your offer will be accepted in the face of someone else’s higher offer.

The offer, the exchange and the move in!

Once your offer is accepted, the next step is to contact a lawyer and launch an inspection. If the inspection reveals something you don’t like, then you have the right to retract without paying any fees. In fact, you can withdraw at any time before the exchange of contracts, even if you have simply changed your mind.

If this is advantageous for you as the buyer, the negative side is that the seller can also withdraw from the sale at any time. And if this happens, you will lose the money you have already spent (such as notarial and inspection fees).

Your notary will do a number of researches for you and liaise between the seller’s lawyers in order to resolve any problems related to the contract. Once this step is completed, you will proceed to the exchange of contracts, which means that the contract is concluded and you can no longer withdraw. Finally, generally seven days after the exchange, you finalize the acquisition and you can move in.

Legal issues

There are no real legal restrictions on buying a property in England, but you should consult a tax advisor.

Purchasers buying for a certain amount have to pay stamp duty (see fees and taxes) and you may also pay capital gains tax. If you rent a property to someone, you will have to pay income tax on the rental. This is one of the reasons why it may be advantageous to start a company to buy a property. However, again, consult a specialist for advice.

Inheritance tax applies to all properties in England regardless of the country of residence of the owner. Owning property through a company or trust can be financially interesting, but it depends completely on your personal situation.

Finances

Interest rates in England are currently at their lowest, so if you have to finance your purchase, you could be much worse off than taking out a loan in pounds sterling. That being said, it is also possible to borrow funds in another currency if it better suits your needs.

Loans in sterling are available to non-residents but you are unlikely to have as favorable terms as local buyers. The majority of loans available for foreigners generally require a down payment of 35% but you should always have the option of a traditional home loan or an investment loan. Similarly, you should be able to choose between a fixed rate loan and a base rate tracker.

Loans for non-residents will be offered if you meet a number of criteria. This generally includes your age (the loan will run for 25 years or until you reach retirement age), accessibility of prices (i.e. your income and financial assets) and rental income if you plan to rent your property.

If you are a self-employed entrepreneur, then be prepared to produce the accounts for the last three years to prove your income.

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