Thank you again for taking the quiz. Learning the answers to these basic questions is a great first step toward making a property investment in the UK. If you have any further questions, feel free to get in touch with us at international@jmlproperty.com
Q1. Who can buy property in the UK?
Answer: Foreigners and non-residents can buy any property in the UK, but not with all of the same conditions as a UK citizen.
Generally speaking, anybody can buy property in the UK. However, special stamp duty surcharges apply to non-residents, and certain government-sponsored incentives such as the Help-to-Buy scheme are not available to foreign nationals.
Q2. What are the differences between freehold and a leasehold titles?
Answer: All of the above.
1. Freehold titles gives the owner outright ownership of the land and the building that stands on it, in perpetuity. Leasehold title holders have a lease from the freeholder to use the property for a set number of years, often between 90-120 years
2. With some exceptions, houses are usually sold as a freehold, and flats/apartments are sold as a leasehold
3. Leaseholders have to pay ‘ground rent’ and ‘service charges’ to the freeholder as stipulated in the leasehold title
Generally speaking, freehold titles are preferred over leasehold titles because freeholders have a larger degree of control over the property.
Q3. When a property is sold in the UK, who pays agency commissions and how much?
Answer: Under most situations, the seller pays the estate agency commissions. The fees vary, usually between 0.75 – 3% of the property price
This is standard practice in the UK, however if you are purchasing a property from overseas, we recommend that you also check if there are additional fees that will be incurred such as consultancy, administration etc.
Q4. What is the additional stamp duty surcharge applied to non-resident property buyers in 2021?
Answer: 2%
As a 'surcharge', this is paid on top of the regular stamp duties owed, calculated according to the value of the transaction. You can find more information on SDLT (Stamp Duty Land Tax) here.
Q5. What is the additional stamp duty surcharge applied to all second-home buyers in the UK in 2021?
Answer: 3%
Again, as a surcharge this is applied on top of the regular stamp duties owed, and also any previous surcharges.
Q6. When purchasing a UK property, your solicitor will ask you to present these documents, EXCEPT…
Answer: Criminal record
Your solicitor will normally ask for your proof of ID, proof of address and proof of funds. The UK has strict financial regulations, so you need to demonstrate that you have the funds available to purchase the property, and present clear documentation of where the funds came from.
Q7. No matter who is living in the property, the landlord always has to pay the ‘council tax’. True or false?
Answer: False
Usually, the person who is using the property as a residence is liable for the council tax. This could be the tenant, or the owner-occupier. If the property is empty, you can apply for a discount on the council tax for the first month, but after that the owner is liable.
Q8. As an non-resident buyer, where can you get mortgage financing to buy a UK property?
Answer: Some banks in Hong Kong provide mortgage financing for individual UK property purchases. Non-residents can also obtain mortgage loans from traditional lenders in the UK, but the process usually takes longer than it does for locals
Because of the strict financial regulations in the UK, opening a bank account as a non-resident can sometimes be a long process. You do not need a UK bank account to purchase a property, but you will need one for practical operations such as collecting rents and paying various property related fees.
Q9. How old is Queen Elizabeth II in 2021?
Answer: She is 95 years old!
Queen Elizabeth II is the longest reigning monarch in British history. She's been the queen since 1952!