EDUCATIONAL
The Complete Guide to Buying Property in the UK: Essential Steps and Tips
October 30, 2024 • Author: Richard Bradstock
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Buying property in the UK can be an exciting yet complex process, especially if you're unfamiliar with the market. Whether you're a first-time buyer, an overseas investor, or simply looking to expand your portfolio, this guide will take you through the essential steps and tips you need to navigate the property market successfully.
1
Determine Your Budget
The first and most important step in buying property is knowing how much you can afford. This goes beyond just the purchase price of the property—there are many other costs to consider, including:
Deposit
Stamp Duty
Surveyor Costs
Moving Costs
It’s essential to get a clear picture of your financial capacity, including your borrowing potential, before starting the buying process. RPA can refer you to an independent mortgage advisor or you can use online mortgage calculators to get a rough estimate.
Location is everything when buying property, whether it’s for personal use or investment. Take time to research different areas in the UK to determine which suits your needs best. Key factors to consider include:
Transport Links
Commuting distance and access to good schools can be a priority to achieve the highest possible rental yields.
Shops, restaurants, parks, and public transport can affect the property’s value.
If you’re investing, look for areas with good rental demand and prospects for capital growth. Northern cities like Manchester and Liverpool, for example, often offer higher rental yields than London.
The good news is that if you’re buying with RPA, you’ll be provided with a full market analysis of the location, so you can tick the due diligence box with confidence.
If you’re a non-resident, you can still get a mortgage, but you may need to provide more detailed financial information and use specialized mortgage brokers that cater. RPA work with a panel of independent mortgage advisors that work exclusively with overseas property investors. Just get in touch and we can refer you.
4
Start Your Property Search
Now that your finances are in order, it’s time to start searching for the right property. Every single investment opportunity sourced through RPA is the product of thorough research, appraisals and due diligence. We’re proud to offer our clients a broad choice of investments across a range of price points and locations. We do this because the UK property market is not one monolithic market; many of its regional markets perform differently and we want to give our clients access to the best performing markets in the UK and those which hold promising future value.
Understanding demand
PRICE AND YIELD EVALUATION
Regeneration projects
5
Make an Offer
Once you find the right property, the next step is to make an offer. In the UK, property prices are often negotiable. RPA will submit the offer on your behalf and negotiate accordingly. Once it is accepted, the buying process begins.
After your offer is accepted, you’ll need to hire a solicitor or conveyancer to handle the legal aspects of the purchase. You may have your own or you may wish RPA to refer you to a trusted and independent solicitor who specialises in conveyancing. The conveyancing process includes:
Title Searches
Usually 5-20% of the property price.
A tax you’ll need to pay when buying property. The amount varies based on the property price and whether you’re a first-time buyer or buying an additional property.
Solicitors or conveyancers will charge for handling the legal aspects of the purchase.
A property survey to check for structural issues is recommended and can vary in price.
Consider removals, utilities, and setup expenses when budgeting.
2
Research the Location
Local amenitieS
Investment potential
3
Get Your Finances in Order
Once you have an idea of your budget and the location you want to buy in, the next step is to organize your finances. For most buyers, this means securing a mortgage. The UK mortgage process typically involves:
Choosing a Mortgage Type
Commuting distance and access to good schools can be a priority to achieve the highest possible rental yields.
Mortgage in Principle
Before starting your property search, it’s useful to get a "Mortgage in Principle" from a lender, which gives you an idea of how much they’re willing to lend based on your financial information.
Check Your Credit Score
A good credit score will increase your chances of securing a favourable mortgage rate. If your score is low, you may want to take steps to improve it before applying.
Part of our privileged access to these markets comes from our direct relationships with UK developers, which when it comes to buying off-plan properties is a valuable relationship to have – and from which our clients reap the benefit. We look at:
Location and property type
In areas of dense development, we want to ensure that our clients will be able to access the right tenant pools.
Matching investment goals
All our properties must fulfil the investment goals of our clients be that high rental yields or long-term capital appreciation.
This applies to both the market as a whole, but also the demand in the immediate local area of the property in question. Understanding whether you are buying in a buyer’s or seller’s market may also influence the purchase price.
All our investment properties are subject to a thorough price and yield evaluation. Is the price fair? Will the rental yields stack up? This is where working with local experts in the UK really helps us to interrogate the figures to look at past sales data and future price projection.
We are always on the look out for quality regeneration projects in the UK, be they in London, Manchester or Birmingham. Areas of regeneration offer early bird investors serious gains in the medium to long term – sometimes even in the short-term, but again, the fundamentals need to stack up. And this is where our due diligence comes in.
6
Hire a Solicitor and Conduct Due Diligence
Ensuring that the property is legally owned by the seller and free of encumbrances.
Drafting Contracts
Preparing the contract of sale and dealing with the exchange of documents.
Property Survey
Arranging for a surveyor to inspect the property. There are different types of surveys, ranging from a basic condition report to a full structural survey, depending on the age and condition of the property.
7
Exchange Contracts and Pay Your Deposit
Once your solicitor has completed the due diligence and you’re satisfied with the survey results, it’s time to exchange contracts. This is a critical step as it makes the sale legally binding for both parties.
At this stage, you’ll also be required to pay your deposit (typically 5-20% of the property price).
8
Completion
After the contracts are exchanged, the final step is completion. On the agreed completion date, the remaining balance of the purchase price is transferred to the seller, and you’ll officially take ownership of the property.
Once the sale is complete, you can pick up the keys and start moving in or instruct a management and lettings agency to rent out your property and get in income producing as soon as possible.
Tips for a Smooth Property Purchase
1
Plan for Hidden Costs
Always have a buffer for unexpected expenses like repairs, legal fees, or fluctuations in mortgage rates.
2
Consider the Long-Term
Even if you’re buying for personal use, think about the long-term investment potential of the property.
3
Stay Organized
Keep track of all paperwork, from mortgage applications to survey reports, and communicate regularly with your solicitor to ensure there are no delays.
4
Understand Your Taxes
Familiarize yourself with the tax implications of buying a property, especially if you’re an overseas investor. Stamp duty, capital gains tax, and income tax on rental income are key considerations
Conclusion
Buying property in the UK can be a rewarding venture, but it’s important to follow the right steps and seek professional advice where needed. Whether you’re looking for a home or an investment, doing your research and taking the time to understand the process will help you make a sound decision.
With careful planning and due diligence, you can navigate the UK property market confidently and achieve your property goals.
Contact RPA today to start your investment journey.
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About the author
Founder & Managing Director
richard bradstock
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals.
