A Guide to the UK Property Purchase Cycle

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A GUIDE TO THE UK PROPERTY PURCHASE CYCLE
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Youve thought long and hard, and have decided to
invest in UK property. What happens next? This
article will guide you through the different
stages of the UK property investment process. It
starts with choosing a property that fits your
budget and investment goals and appointing an
agency that can take you through the purchase
process. Unless you dont mind the hassle of
traveling to and from the UK to deal directly
with the developer/seller, a good agency will
help you select developers carefully, i.e. those
with a good track record of completing projects
on time. It is important that your agent works
closely with the developers, facilitating
communication from the developer to you, and vice
versa.
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1 Property Reservation

• We recommend investments based on your goals
  and budget, and once you have decided on the
  property for investment, you will need to
  sign Reservation Forms and a Solicitors
  Appointment Letter.

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2 Anti-Money-Laundering Checks

• The Anti-Money-Laundering process is a very
  important part of buying UK property, and is done
  by your solicitor on behalf of the UK Government
  to ensure that your purchase funds are not
  related to suspected money-laundering and
  terrorism links. Your solicitor will ask for
  proof of your identity, residential address,
  availability of funds and its sources.

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3 Exchange of Contracts 1st Payment

• Once you have completed the
  Anti-Money-Laundering process, you will need to
  sign the Sale and Purchase Agreement. This is
  normally done within 28 days of your solicitors
  receiving the contract from the sellers
  solicitors. Together with this Agreement, you
  will make your first payment to the developer via
  your solicitors. This amount varies from one
  developer to another.

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4 Financing

• You may apply for financing while purchasing
  UK residential property with a value in excess of
  100,000. Application for financing can be done 3
  to 6 months before settlement, and the banks will
  assess your financing position and eligibility.

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5 Final Settlement Stamp Duties

• When your property is nearing completion,
  the developer will send a Completion Notice to
  your solicitors. You will need to make full
  payment for the property at this stage, which is
  also known as the final settlement, and pay any
  applicable stamp duties to HM Revenue Customs
  (HMRC).

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6 Property Management 

• When you exchanged contracts with the
  developer, you may have signed an agreement to
  hire a letting agent. You may also have chosen to
  manage the property yourself. The letting agent
  will ensure your property is well-maintained,
  taking care of all expenses involved, and
  collecting the rental on your behalf.

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7 Rental Income

• You will need to pay income tax to the UK
  Government once your property starts generating
  rental income. We can recommend a qualified
  professional in the UK to manage your taxes. You
  may also file your rental income taxes to HMRC
  through self-assessment (using form NRL1). 

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8 Property Resale/Exit

• Should you choose to sell off your property,
  we can recommend a property agent and solicitor
  to assist you. The agents commission rates, your
  advertising budget, and exclusivity will be
  decided by you and the agent. The agent will
  provide an appraisal of the property indicating
  how much they expect to sell the property for,
  and tell you how they plan to market your
  property.  

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Thanks You

• If you are interested to explore investing in UK
  property for high returns, or if you need us to
  refer you to a good tax firm in the UK, dont
  hesitate to give us a call at (65) 3163 8343
  (Singapore), 03-2162 2260 (Malaysia), or email us
  at info_at_csiprop.com!