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UK Property Investment Solicitors

Are you looking to invest in the UK property market from abroad? Our property solicitors have extensive experience helping overseas investors from UK enter the market.

Speak to our UK based team today and let us make your purchase as simple and straightforward as it should be.

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Are you thinking about buying a property in the United Kingdom?

 

Our friendly, reliable residential conveyancing solicitors have the local knowledge and experience to ensure your purchase runs as quickly and smoothly as possible. This, combined with the fact that our team is fluent in both Cantonese and Mandarin, means that while some firms shy away from foreign funds, we have years of experience in dealing with source of funds checks for overseas investors. 

Whether you are a first-time investor or expanding an existing portfolio, we will provide you with high quality legal advice throughout the conveyancing process.

At Davisons Law, our clients are at the heart of everything we do – that’s why people come back to our conveyancers again and again.

Why invest in the UK housing market from Hong Kong?

Investment in UK property from Hong Kong is witnessing a surge in popularity, particularly when factoring in the average property prices in Hong Kong.

At Davisons Law, we offer expert legal services tailored to facilitate your property investment journey, empowering and fortifying your financial prospects.

Projections indicate a substantial 17.9% increase* in mainstream property prices across the UK from 2023 to 2028, driven by persistent demand outweighing supply. Better still, prices are expected to fall this year by 3%, which means there are deals to be had.

If investors can buy at a low price in 2024, they may be able to achieve a 20% gain in the next 4 years (an average of 5% capital growth per year).

*Source: Savills, 2023 

Buying properties in the UK

If you are thinking of buying properties in the United Kingdom, here are some tips to help you navigate through a property market and conveyancing process which is quite different from Hong Kong and China.

Market similarities

Some things are still the same though, such as the principle of Caveat Emptor, that is Latin for “Let the buyer beware”. The seller (vendor) will always have a better knowledge of the property than you do. The vendor does not have to offer information about all the defects in the property. This is why it is important to instruct an established law firm in UK that is good at what it does to ask the vendor the right questions regarding the property and conduct the right enquiries and searches when buying properties in the UK.  

Davisons Law is one such law firm with 14 offices in the UK and over 400 staff members. Davisons Law has Chinese fee earners who can speak Cantonese and Mandarin in their Colmore Row office in Birmingham. This will be of great help to individuals who do not consider English as their first language as the contract, transfer deeds and property documents will all be in English. In order to improve client communication, they also use Whatsapp with clients who wish to speak to them directly. 

Kindly note that Davisons Law only deal with English and Welsh law and not Scottish law, and therefore, we can only deal with properties in England and Wales.

Differences in England and Wales

When you find a property you like that is advertised on an estate agent’s website, you can make an offer to buy the property. The seller (vendor) may accept your offer but bear in mind this is subject to contract. Prior to the exchange of contracts, the seller can pull out at any time and so can you. This has lead to the phenomenon known as gazumping. 

Gazumping happens when the vendor having accepted your offer, withdraws and accepts a higher offer from another buyer. This is perfectly legal in England and Wales. If you are afraid this may happen to you, you can obtain Home Buyers Protection Insurance though this is expensive compared to the amount insured. 

A way of reducing the chance of gazumping happening is to try to reduce the time between the offer being accepted and the contracts being exchanged. If you are planning to get a mortgage, get a mortgage in principle first. Find a law firm you want to instruct so you are ready to proceed immediately once your offer is accepted. Some law firms may prioritise your case in order to complete the purchase quickly but they may charge an additional fee to do so. The normal conveyancing timescale post COVID on average is between 12 to 16 weeks.   

It may not always be possible to shorten the timescale as the buyer may also be waiting to purchase their property as well. This is called a linked purchase and a series of linked purchases is called a chain. For example, a buyer, A, of her first property will have no property to sell but the vendor, B, she is buying from will be buying a property to replace the one he is selling. Vendor B will be buying from Vendor C, and Vendor C will be buying from Vendor D. This carries on until there is a vendor that does not need to buy a property to replace the property he sold.  

On the agreed completion date of the purchases, what usually happens is everyone in the chain packs up everything from their old home into a van or lorry in the morning and after completion, move into their new home in the afternoon. This sounds like a crazy and manic way of doing things, but it generally works well. Preferably, contracts should have been exchanged a week beforehand to avoid any unpleasant surprises.

UK services for HK investors

We offer a number of core services for those looking to enter, or improve their presence in, the UK housing market. These include:

  • General property investment
  • Residential conveyancing
  • Buy to let (BTL)
  • New build conveyancing
  • Buying at auction

Tax implications for Hong Kong Investors

  • Stamp Duty Land Tax (SDLT): Non-residents purchasing property in the UK are liable for both standard SDLT rates and an additional 2% surcharge.
  • Inheritance Tax: Non-UK residents acquiring property in the UK are subject to inheritance tax. Upon death, a 40% inheritance tax is imposed on the value of all UK-based assets for individuals not domiciled in the UK.
  • Annual Tax on Enveloped Dwellings (ATED): ATED is an annual tax imposed on companies owning residential properties valued over £500,000 in the UK.
  • Capital Gains Tax: Capital gains tax applies to the profit realized from the sale of non-inventory assets and is mandatory for both UK and non-UK residents upon disposing of residential property in the UK.
  • Income Tax: Rental income generated from UK investment properties is subject to income tax. Tax can be settled either by receiving the income in full and then paying tax through a self-assessment tax return, or by authorizing your lettings agent or tenant to deduct the tax automatically.

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Have any questions or need any help?

Our team of specialist lawyers are experts in their field. Be confident in their advice and decisions to help get the right outcome for you. Contact us today to see how we can help

FAQs for foreign investors

What services do Davisons supply?

At Davisons, we specialise in housing and conveyancing services for investors looking to enter the market from Hong Kong. This ranges all the way from obtaining property information and carrying out the necessary checks with local authorities to the exchanging of contracts and completion.  

How easy is it for international investors to buy in the UK?

In recent times, the UK property market has seen a surge in interest from international investors, solidifying its reputation as a secure investment option. Recent data reveals that the number of overseas landlords holding UK properties has hit a record high, reaching approximately 184,000, marking a significant 19% increase over the past five years.

While acquiring property in the UK from abroad typically involves a more extensive process and requires careful consideration, the potential returns often justify the effort. Additionally, overseas landlords purchasing additional properties in the UK are subject to a 3% charge, in addition to the existing 2% Stamp Duty Land Tax surcharge applied to foreign investors.

Can international investors get buy-to-let mortgages?

International investors typically acquire properties through either cash transactions or by utilising specialised buy-to-let products.

In today’s market, a variety of mortgage options are available, including tailored products for non-residents and expatriates. It’s essential to explore different avenues and consult with experts to find the most suitable product for your requirements.

Regardless of the chosen option, applicants must provide various documents during the application process, such as a passport, proof of creditworthiness, and evidence of mortgage affordability. Additionally, a deposit typically exceeding 25% is required, along with proof that rental income from tenants will sufficiently cover mortgage interest payments.

The borrowing capacity is determined by the property’s rental potential, with lenders typically requiring rental income to exceed 125% of the monthly interest payments on the loan.

Do you need a visa to invest in the UK?

When investing in UK property from Hong Kong, a visa is not required for investments valued under £2 million. For amounts exceeding this threshold, individuals have previously had to apply for a tier 1 investor visa. However, this is currently closed to new applicants.