UK Property Buying Process
The buying process for purchase of investment property is similar to that of purchasing ‘own use’ property from third party sellers, but is simpler and can be completed in a shorter timescale
Buying Investment Property
The process for the Investment Properties is simpler as there are no third parties involved and the rental and management of the property does not change as it continues to be managed and rented out by us or our partner companies. There is no mortgage lender involved. The prices are fixed (in-line with the market and rental yield) and a prior reservation agreement provides security and certainty for us and for you in the purchase process. Thus the process is quicker and the buyer starts getting guaranteed rent 1 month after Purchase Completion.
Here are the steps involved:-
STEP 1. Make Enquiry & Get Brochures
Watch the Main Video on the Home Page, Complete an Enquiry Form with your email and details and get further information.
STEP 2. Discuss Your Needs
Our staff will email you information (check your spam or junk folder) and can call you to discuss your needs. Is investment property in the UK right for you or not? We aim to provide you with good honest advice and will tell you if such a property will not meet your needs. You can make a provisional decision on type of property e.g. Type H2. this can be changed later.
STEP 3. Provide Ownership and ID information
First you need to decide if property to be purchased is by a single owner or multiple owners, or company. If multiple owners (e.g. husband and wife) you will also need to consider the type of joint ownership. Most investors go for single person ownership as this keeps things simple.
Your ID information will be required BEFORE we can start dealing with you or showing you any property or provide official quotes or draft agreements. This is regulatory requirement in the UK and some overseas buyers do not appreciate this. You can scan and email this information to us. We are required by Law to keep all such information confidential. The ID information required will be:-
- Passport copy (photo page)
- Address ID e.g. Driving Licence, ID Card or Utility Bill
Once we have your ID information, we can provide more specific details and a draft Reservation Agreement and clearly layout how the purchase process will proceed in your particular case. Clients normally make a reservation of the “Best Buy” H3 Type first. At property selection they can upgrade or downgrade to other types if they wish.
STEP 4. Arrange Video Meeting
Prior to Covid, most investors would visit us – either prior to purchase or after purchase. This allowed us to meet them at our offices and show them our operations and answer all of thier questions directly. Now we are finding that a good Zoom Video Meeting achieves 90% of the benefites of a visit and provides much more convenienece.
After you have received the reservation agreement we can arrange a video meeting with a Senior Director of up to 1 hour. Many meetings are with Dr. Tariq who can advise clients and answer all questions. He can explain how we work and the details of the buying process. Let us know best times for the meeting and we will send you a Zoom Video Link. You can click the link and see us. It is best to arrange the meeting after you have received the agreement.We can still arrange a vist after the Video Meeting if needed (if Covid permitting) to show the the different areas and different types of properties. You will not be able to select the specific property at the visit but will get a good idea of what the properties and areas are like and fully understand our company. In order to visit you will need to book in advance and provide ID beforehand as per step above and also have a video meeting beforehand to make sure a visit is worthwhile or not. We can also get your documents attested by a UK solicitor (if not done overseas) as identification is required for exchange of contract, purchase completion and registration under your name at UK Land Registry. We also get documents done to represent you for other steps in the purchase process and property management. If you are abroad or in London, you can still buy but we will need to get your documents (passport, address ID & ID-1 Form) attested by a lawyer near you home or in your country (if abroad) to the satisfaction of solicitors and the UK Land Registry. This can be done easily and we will provide full details.
STEP 5. Make Reservation
We use the 2 stage “Reserve & Select” process. Once you agree to purchase, you will need to sign and scan back the Reservation Agreement sent to you in step 3, and then make a payment of 10% into the Client Account. This is an important step as the Reservation fixes the price and gives you priority in property selection which is normally 4 to 5 weeks later. After reservation, we will also send you ID and other forms for you to complete and scan back to get things ready for the solicitors. You will also need to provide 3 months of bank statements to show source of funds. We can help you and guide you in this process so that you can send the right documents to us. Clients normally make a reservation of the “Best Buy” H3 Type first. At property selection they can upgrade or downgrade to other types if they wish.
STEP 6. Property Options
Due to high demand Property Options are sent in reservation date order. We email you details (pictures, location maps etc) of 8 to 10 houses of the type reserved for you to select one as per your preferences.
STEP 7. Select Specific Property
All properties within each “type” are very similar and will deliver the same investment returns and long term value. So you can choose any that you like. Once you are 100% happy with the selected property, it will be allocated to you and we start the transfer process with solicitors. You can also view the selected property if you wish at this stage or later.
STEP 8. Property Transfer & Ownership Documents
We follow the “Facilitated Buying Process” (see main video) and normally act on your behalf to ensure all the steps are taken to legal exchange of contracts and complete the property purchase after your full payment.
Local external independent Law Society Solicitors act for buyer, do searches, check titles, complete purchase, & register under buyer’s name at UK Land Registry. Satisfactory completion of this process is also guaranteed by us. Completion is normally about 4 weeks after property selection (if all documents including bank statements and final payment ready) and Registration is normally 6 weeks after completion.
Following completion, you get a completion summary from the Solicitors and then the property is registered under your name at the UK Land Registry by your solicitor and the solicitor will provide evidence for this after registration. We will ensure all documents are sent to you. You can also check your ownership directly with the Land Registry which maintains and on-line register.
STEP 9. Post Completion & Guaranteed Rent
Rent starts 1 month after Completion Date and is paid into the owners own bank account at the end of each calendar quarter.
Bank Details: We get your bank details (UK or Overseas) & pay rent at end of each calendar quarter
HMRC Application: If you are resident overseas, we register you with HMRC as non-resident landlord. We complete the application and send for you to sign and return.
Net Guaranteed Rent System: We are effectively your tenants and agree to pay guaranteed net rent at 6% of property price per year and manage and maintain the property at our cost. We do everything. You do nothing, and get passive income for the long term.
STEP 10. After Purchase Services
Most clients want to keep properties for long term. We are set up to provide services for 20+ years and longer.
Long-term Guaranteed Rent: Net Guaranteed Rent System continue after the 3 years & rent should increase as property prices & rents rise. – see Property Investment Page for details
UK Will Service: You can decide who will own your property after you. E.g. Children – We provide a free template for you to complete the Will and lodge a copy with us.
Annual Tax Filing Service: We are official HMRC Tax Agent and can provide this. Most clients inc. overseas nationals have the UK Personal allowance of £12,500 – so annual rental income below this is effectively tax free. But tax filings still need to be made if you own a property.
Open Non-Resident UK Bank Account: We can provide reference letters after property is registered to help you do this.
Future Resale: You can resell easily in the future and we can also buy back at market price. However, you should NOT buy, if you wish to resell within 2 years as you will not make much profit.
Buying Own Use Property
Buying own use property from third parties follows a more traditional process that can stretch to an average time period of about 3 to 4 months. The third party may have to purchase a house before completion can occur. There is also more uncertainty regarding completion as there is no pre-agreement equivalent of the reservation agreement. Theoretically the buyer can pull out at any time before completion of contracts but this does not happen often.
If you are resident in the UK, a mortgage lender may also be involved and would result in additional steps in the purchase process. As prices of such property is likely to be higher, UK stamp duty charge may also be payable.
Please note that unlike our service for investment properties, a buyer’s fee is payable by the buyer to us for buying own use property from third parties. No buyer’s fee is payable for the investment properties.