Depending on how long you intend to stay in the United Kingdom, you may choose temporary rental residence for shorter stays and purchasing a home for a permanent stay. Foreigners may choose to rent out an apartment first to study the lay of the land before choosing a forever home.
If you are looking to invest in a home for investment, there are a few financial costs you should consider before making the purchase; they include;
Before buying a home or property, you should plan financially for the following costs. You should also be aware that investing in a home may not bring in money right away; it may take months to realize any returns on investment. With that in mind, here are some of the hidden costs that you might have never known about.
- Stamp duty– If the property you intend to purchase is valued at over £ 125,000, expect to incur stamp duty. Depending on the type of property, your stamp duty can cost 2-13%.
- Deposit– If you decide to take out a mortgage to buy the property, you must pay a deposit in the UK. The range for this is usually 5-40% of the property cost.
- Mortgage costs– Taking out a mortgage also attract additional fees, including arrangement fees, booking fees and valuation fees. In total these could sum up to a few thousand pounds.
- Legal fees– You are required to employ a real estate solicitor or conveyance to act on your behalf whether you purchase a mortgage or purchase the property. These services can cost you about £1,000.
- Land registry fees– As the new property owner, you are legally required to pay land registry fees to the UK government. These fees are meant to cater for the transferring of legal deeds over to your name.
- Removal fees– If you have any property you wish to bring into the UK from another country, you will have to pay removal fees to get your property furnished with your old fittings and furniture.
- Maintenance and repairs– After investing, you may choose to rent out the home. As the new owner, you are responsible for any repairs on the property. After purchasing the home, you may incur the cost of making structural adjustments to increase rental income.
- Insurance– You are advised to purchase insurance for your property. Building insurance and home contents insurance covers you from financial damages caused by certain unforeseen events.
- Regular bills– UK property owners have to cover the cost of council tax that depends on their properties’ value. They also settle the gas, energy and water bills.
- Leaseholder costs– If you settle on a leasehold property, you may be required to pay additional charges, ranging from £50 to £100.
- Getting a survey– In the UK, mortgage lenders will arrange for a property survey. Property owners pay for this service to get the additional information provided by the survey including potential maintenance and repair costs.
Signing the Contract
As mentioned earlier, legal aid is a vital part of investing in property. It is important to have legal representation during the contract signing stage. The lawyers will go through the contract and advice on any clauses that disadvantage you as the buyer. You have the chance to negotiate the terms and conditions of a sale before signing; take advantage of it.
Investing in a home is made easier by utilizing investment advisory services. Experienced investment professionals with years of experience are guaranteed to help you consolidate your investment goals with your long-term financial goals. In addition, housing laws and policies are constantly changing; if you have a busy schedule, you may have trouble staying up to speed with these changes. The help of a professional will allow you to make informed investment and financial decisions.