Step-by-step guide to buying property in London
for Hong Kong homebuyers & investors

Preparing your finances

You should organise your finances well in advance and prepare to make a deposit when the time comes. Prepare to provide evidence for everything disclosed to the bank on your application. Ensure that you will pay from a UK bank or a bank that lends internationally. It is recommended that you should get a UK mortgage while still in Hong Kong, so you will not have to rebuild income proof, credit history, etc. in the UK. In general, if the Loan-to-value is high, the bank will have a higher interest rate. If purchasing a new build, make sure your bank is able to lend on that scheme.

A specialist broker is essential as they will have more knowledge specific to Hong Kong residents and in-depth understanding of the UK property market. For example, they will have access to the full lender market, bank quotas for new builds, and lenders’ online portals.

Mortgage eligibility

If you have a BNO visa you must have proof of full-time employment, at least 1-2 years left on your visa, and a mortgage deposit ready. If you do not have a BNO visa you can still purchase property, regardless, we recommend you seek out a specialist mortgage lender. Hong Kong citizens that plan to live in their property must have residential status in the UK.

The mortgage deposit will be at least 25% of the property’s value, but we encourage you to deposit more. There are several types of mortgages you can use: such as fixed rate mortgage, tracker mortgage. The minimum mortgage size is £50,000 and you can get up to 85% loan to value. Make sure that if you do not bank in the UK, your bank can do international mortgages.

Documentation

As a Hong Kong investor purchasing UK property, you will need several documents with the names of all the buyers:

• Proof of identity: A current passport is acceptable (a valid UK visa is not required).
• Proof of address: Utility bills, driver's licence, bank, building society, or credit union statements, and tenancy agreements (any one but must be dated within the last three months) are acceptable forms of proof of address.
• Proof of funds: Bank statements from the last three to six months
• Supporting records demonstrating the source of funds: Such as income from a salary, business income, gifts, fixed deposits, the sale of real estate, the sale or liquidation of an investment portfolio, company profits, dividend payments, inheritance, insurance policies, retirement income, etc.

All documents must be certified by an active professional, such as

• Attorney or Qualified Lawyer
• Solicitor or Licenced Conveyancer
• Notary
• Chartered Accountant with a certificate of practice

Refining your search

We help streamline the process of purchasing property in the UK, however, first you need to assist us in identifying these parameters:

• Reason of purchase: Either self-use or for investment
• Size: How many bedrooms and bathrooms do you prefer? (One or two bedroom properties are the best for letting and have a better rent yield)
• Location: Which of London’s boroughs would you like to purchase a property in?
• Style (new or old?): Would you favour an older property, new property off-plan (to be completed in the future), or a newly finished property in a new development?

Understanding leasehold:

Although many homes in London are under a lease, this does not imply that you do not own them. Generally speaking, a property is leasehold because there is a part of the community where several people essentially live under the same roof and, as a result, must contribute to the expense of maintaining the building's structure, roof, or any other communal areas. The majority of recent developments now provide properties with leases that range from 125 to 999 years, though lease durations do vary.

Examine your budget

Once you determine your spending limit, you need to be aware of extra expenses related to buying property in the UK:

Viewing & shortlisting properties

Viewings are crucial to decision-making when it comes to choosing a property. Our team can schedule viewings for you once you have chosen several options.

• Physical viewings: With a team of over 200 professionals and 21 local branches that cover central London, we can schedule in-person property tours for you. After arriving in London, our agents can create a personalised itinerary for guided physical tours of the shortlisted properties. This can help you have a greater understanding of the properties, surroundings, and features.
• Virtual viewings: If you are unable to visit London, our team can arrange virtual video chats via Zoom or WhatsApp to discuss every aspect of the property. We can provide an individualised virtual tour that includes viewing pictures, videos, floor plans, and layouts as well as the views from various apartment types and the development as a whole.

Submitting an offer & reservation

After you decide which property you would like to purchase, we will present your offer to the seller or developer.

Considerations before Offering:

• Resale or finished properties demand full payment at the time of offer and contract exchange. On the other hand, unfinished properties have staged payments based on the schedule of construction.
• Off-plan or under-construction properties are reserved by paying the initial reservation fee, commonly known as token money. Following the payment, you will have 28 days to make a 10% down payment of the property purchase price and exchange contracts.

Instructing the solicitor

In the UK, a Solicitor must be used for all real estate transactions. We collaborate with a number of independent lawyers that can provide a list of Solicitors or conveyancers with a wealth of knowledge in these types of real estate transactions. Your Solicitor or Conveyancer will arrange all the required paperwork and protect your interests during the purchase of your new home once the property has been reserved.

The Solicitor will need the following documents:

• Proof of identity: Current passport is acceptable (a valid UK visa is not required).
• Proof of address: Utility bills, driver's licence, bank, building society, or credit union statements, and lease agreements (any one that is dated within the last three months)
• Proof of funds: Bank statements from the last three to six months
• Supporting documents demonstrating the source of funds: Such as income from salary, business income, gifts, fixed deposits, the sale of real estate, the sale or liquidation of an investment portfolio, company profits, dividend payments, inheritance, insurance policies, retirement income, etc.

Acceptance of offer

• You must pay the reservation fee and sign the reservation form if the seller accepts your offer.
• The Solicitor will arrange the necessary paperwork to exchange contracts after the reservation is complete.
• Contracts must be exchanged within 28 days of the reservation date or as specified in the reservation.
• Before exchanging contracts, a buyer must make sure that the deposit money is accessible at the exchange point.
• Whether ownership is given at completion or a late date for an under-construction development, you must secure the funds for the entire purchase price after deducting the down payment.

Conveyancing

Conveyancing is the process by which a Solicitor or lawyer facilitates the buying and selling of real estate in the UK. The procedure often entails:

• A copy of the Title Deed with legal terms and conditions is given to your Solicitor by the seller's Solicitor.
• Your Solicitor or conveyancer arranges all the paperwork, protects your interests during the purchasing process, and addresses any issues on your behalf.
• The development's amenities, furniture fixtures, and facilities are all available to Solicitors upon request.

Contract exchange

Up until the contract exchange, neither the buyer or seller is legally committed to any of the work accomplished. However, following the exchange of contracts, both parties are legally obligated to abide by the terms and conditions in the contracts.

• The exchange typically happens within 28 days of the reservation date.
• At this stage of the contract exchange, the agreed-upon deposit—typically between 10% and 20%—is paid.
• In the case of off-plan or under-construction properties, the payment is often made in accordance with an agreed schedule.

Inspection of properties

It is crucial that off-plan properties are inspected before the handover for first-time owners. This procedure is known as snagging or pre-inspection.

• Normally, the inspection meeting is attended by the developer, and a comprehensive snag list is presented. (A snag list is a list of tasks that the developer or contractor has not satisfactorily finished. It emphasises damaged works that needs to be repaired. The list may contain everything from aesthetic issues like paint splatters to structural issues like leaks.)
• All of the characteristics of the purchased property, such as the central heating and hot water systems, lights, switches, electrical consumer units, etc., will be displayed to you during this meeting. Any shortcomings may be brought to the developer's attention and repaired.

Purchase completion

Completion happens once the balance payment transferred to the Solicitor i.e.

Total purchase price - Deposit on exchange = Balance Due

Next, your solicitor transfers the balance of payment to the seller’s solicitor.

Congratulations on successfully becoming a UK property owner!

Stamp Duty

Within 14 days of exchanging contracts and acquiring the property, you must pay a portion of the purchase price as Stamp duty. The Stamp Duty Land Tax is paid when you buy property over a certain amount in the UK, there is also an additional 2% surcharge for non-UK residents.

For the purposes of the Stamp Duty, someone is a UK resident if they have spent 183 days consecutively in the UK during the year prior to the transaction. One can prove this through utility bills, bank statements, phone usage, etc. The surcharge will also not apply if you are leasing the property for seven years or less (starting on the day you receive the property), “crown employees,” purpose built student accommodation, and residential property that is already paying the circa 5% commercial property rates.

If there are multiple buyers and just one is a non-UK resident, then all buyers will be treated as non-UK residents for the transaction and will pay the surcharge. However, if you are married or in a civil partnership and one person is a UK resident, then both individuals are considered UK residents for the transaction. Your Solicitor will determine the amount as well as prepare your stamp duty land tax return.

See here for a quick Stamp Duty Calculator.

One-stop service

Furnishing & refurbishment: Benham & Reeves' sister company Instyle Direct offers full interior design and furnishing solutions for both investment properties (low-cost designs that will appeal to tenants) and self-use properties (total interior design solutions). Additionally, Instyle Direct provides refurbishment services such as painting, updating the bathroom or kitchen, or a complete renovation.

Lettings: We can also provide lettings services and identify desirable tenants willing to pay the most in rent. Our 21 branches in London cover all the regions where investors look to buy and rent out.

Management: We take care of any maintenance issues, collect the rent and deposit it into your account, and make sure the renter takes good care of the property.

Bill payments: To make it more convenient for you, we pay service fees, ground rent, and utility bills.

Tax return service: We prepare personal tax returns for our international clients.