Property Investor FAQ’s

We have compiled a Property Investor FAQ’s guide aimed to assist interested in investing in property in the UK.

I am a non-resident and non-UK National, can I buy property in London and the UK?

Yes you can buy property in London & UK if you are a non-national you can buy property in the UK. There is no barriers to entry for property investment in the UK, and investors from all nationalities can buy property in the UK.

Is ownership for a non-national investor different?

No, if you are a non-national investor, you can own property in the same capacity as a British National investor.

As a non-resident could I get a mortgage?

Yes you can. This is subject to status, it will depend on your individual circumstance. There are not many lenders who will offer a mortgage or home loan to a non-national investor. Non-National investor mortgages are available and interest rates will vary, as a rough guide from 3.5% to 5%.  Additionally, some lenders will only lend 75% to 60% of the property value, therefore you will have to fund the deposit of 25-40% depending on circumstance.

Mortgages can be quite complicated, it is best to contact us and speak with your consultant for more information.

Do I have to visit to buy a property in the UK?

Yes – You can buy a property without visiting the UK, a lot of investors do this. Your chosen solicitor will be able to handle all purchase paperwork, and will require ID documents from you to satisfy the UK Land Registry. Yes, and we will provide full details.

Property Investor FAQ’s Continued

What is a “buy-to-let”/ what is the meaning of the term “buy-to-let”

Buy-to-let is a term which refers to the purchase of a property; purchased and let/rented out to a paying tenant.

A ‘buy-to-let’ mortgage is a mortgage is a specific mortgage product; to fund the purchase of property buy-to-letproperty.

What locations do you have investment properties?

The majority of investment properties we handle are located in the UK, we generally do not handle property outside of this. We have options from Manchester and Liverpool, to London and greater London. The rental demand is very high in the UK. We operate where there is a large supply and demand imbalance, and where we can source and select opportunities which represent good value to investors in terms of growth potential and also high yielding.

Are property prices rising in the UK?

Yes. Property prices are rising. Prices fell in the UK from 2007 to 2009. These are the properties that now represent the best value and have good growth potential.

Prices are steadily rising again owing to a shortage of house building. The shortage of new homes coming to the market is being outstripped by the demand for property, which is a driving factor pushing up house process. Additionally, overseas investment is continually entering the market as property investors are attracted by the secure and stable market conditions the UK offers.

Should I Consider ‘Under Construction’ or Off-Plan Property?

Yes, these are viable options. New homes are often far more economical to run, a new build property can be as much as 50% more energy efficient. You will also benefit from buying a ‘chain-free’ property. So it can prove a much simpler process without long delays and people pulling out.

How do we source our property options?

Our research team go out to the market to source and select properties which form part of our property portfolio. Our team’s due diligence process ensure that the options we add to our range for our clients are not only from reputable developers but show short, medium and long term prospects for both capital growth and income generation.

How do we get our clients good deals?

We work in partnership with many developers, banks and intermediary’s which means we can structure bespoke deals for our clients. Our relationships with both developers and our investor pool, when they have a large amount of property to sell quickly we are in position to negotiate a substantial discount exclusively for our investors.

Why would a developer give a discount?

More often than not, Property Developers will discount properties. They have been known to sell discounted options at the end of the financial year so they have no standing stock for the annual reports to shareholders.

If there is a development where there are only a few units left, the property developer will not want to maintain the cost of having showrooms open and sales staff on payroll. Therefore, to save on the operational costs, they will sometimes offer a large discount to incentivise a purchase.

Property developers also often Buy off plan so purchasing or committing to purchase a property prior to it being built. They may then wish to underpin their investment by pre-selling a small number of properties within the project at a discount prior to the development being completed.

Motivated sellers. A motivated Seller is someone who wants to sell quickly and is willing to sell at a discount if someone can act quickly and buy in cash.

Should I be looking for high yields or capital growth?

This depends on your personal financial position, risk profile and investment objectives. London property for example will have a lower yield. Properties in cities such as Manchester and Liverpool can have far higher yields.

Capital growth is also important because it indicates the price at which you can potentially later sell or re-mortgage the property.

Generally, higher yielding properties can be found in areas where the property prices are lower; thereofre the annual rent compared to the purchase price means a stronger yield.

Why are your properties are mainly in city centre locations?

Our property sourcing team with their high level of due diligence look at all market-dynamics & analyse socio-economic conditions to highlight key investment opportunities and minimize risk and maximize the returns for our investors.

City Centres are often very strong locations for buy-to-let property investment because there is a high demand for rental property close to employment hubs and the city’s main amenities and transport links.

Higher demand for rental properties within city centre locations, minimizes the potential void periods for our clients. Prime locations also benefit from higher rental prices and higher rental increments.

Should I use a mortgage to purchase the property or buy it outright in cash?

This depends on personal preference and the specific deal in question. Many commentators often recommend that our investors purchase the property with a mortgage because this allows you to utilize your capital to gain exposure to multiple properties which in a period of market growth, could lead to significant return on investment. However this could also expose you to greater capital risk should prices retract.

Our team of dedicated professionals will be able to consult with you and properly explain the potential risk and reward to assist you in your investment decision.

Which mortgage broker should I use and what is their role?

This is at your discretion. However, it is advisable to utilize the services of a mortgage broker who has access to the entire market. This is because they do not have any direct ties to a particular lender and there. They have access to all available mortgage products from every lender without preference to a particular bank. If you do not have an existing broker, we are happy to put you in touch with someone who can find you the best deal.

Who will be my solicitor?

You are welcome to use your existing solicitor if you have one, or alternatively, if you do not have your own solicitor then Hanover Square Real Estate can put you in contact with our existing solicitors. They will be able to carry out the legal purchase process for you and due to the volume of clients and transactions we do, we are often able to get a discounted rate on solicitor’s fees.

What building guarantees are there in place?

As most of our investments are new build developments that have recently been completed they will come with an NHBC, or equivalent, warranty. Typically these cover major defects for up to 10 years.