Housing & Accommodation
Buying a House in the UK
If you are planning on buying a house in the UK – or an apartment, for that matter – instead of renting your expat accommodation, there are some things to consider first.
If you are in the UK for a comparatively short time (e.g. up to two years), it is probably not worth the hassle. Buying a house in the UK takes about three months, from viewing property ads to sealing the deal. So you would spend the first couple of months on buying a house in the UK, and the last few months of your time as an expat trying to get rid of it without incurring a loss.
But what if you’d like to purchase a home for your expat life in the UK and then keep it as an investment later on?
Property as an Investment
If you consider buying a house in the UK to use it as a capital investment, you should talk to a reliable expert who knows the real estate market really well. While there are no restrictions whatsoever on foreign ownership, you want to make sure that such an investment actually pays off.
In many regions, the average price for buying a house in the UK has stagnated or even fallen since 2007. Therefore, it may take you a while until you can sell off your property at a profit. If you want to let it, be aware that rental yields in the UK are among the lowest in Europe (an estimated 3.5% of the property’s worth). However, buying a house in the UK as an investment depends a lot on the real estate market in different regions or individual cities.
The UK Housing Market
Housing prices in Northern Ireland, Scotland, and some parts of northern England are fairly low, with annual drops of 20% in a few counties. In the south of England, though, real estate prices keep on rising. Unless the market develops a property bubble, buying a house in the English southwest, along the south coast, or in the southeast is going to be a sound investment.
The Thames Valley and the natural beauty of the Cotwolds are (in)famous for their local property prices, especially on refurbished cottages and picturesque holiday homes. Even the rural quiet of East Anglia is marked by rising costs for buying a house in the UK. But it’s the Greater London Area that constitutes a real estate world of its own – especially in Central London.
Real Estate in London
The general cost of living in the UK capital is high. Thus it does not come as a surprise that both property costs and annual rents in London are way above the national average. In the first quarter of 2013, buying a house in the UK capital was more than twice as expensive, and almost four times as high as the average in Northern Ireland.
Prime real estate areas of inner London, such as Chelsea, Kensington, Knightsbridge, Mayfair, or Westminster are the prerogative of the very wealthy. Still, foreign ownership is quite high in these boroughs. Top-tier executives, overseas diplomats, or international businesspeople working in the City might be able to afford a luxurious London townhouse for a million pounds – or far more, in some cases.
If you are planning on buying a house in the UK’s unrivaled center, you should plan on spending even more time on your property search. But no matter where your new home is going to be, in London or any other city, you should be prepared to do some legwork yourself. If you still live overseas, you need local support that you can absolutely rely on.
This is another reason why it makes sense to only buy a house for a long-term stay in the UK. If you have already lived in the area where you’d like to settle, you’ll know which neighborhoods you prefer, and you can easily view various properties for yourself. But even if you are able to go house hunting on your own, you should not go through the actual purchase process without professional help. Buying a house in the UK has its practical and legal pitfalls, and you should hire a lawyer (solicitor) to back you up.
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