A presentation of a new issue of InternationalResidence Foreign Property magazine was held in October. DOM-INFO marketingdirector V. Yukhnevich presented an analytical article of the company: Property in England – guarantor ofstability.

Property in England – guarantor of stability!

England is one of the most expensive property marketsin Europe. Nevertheless, the number of people willing to buy property inEngland is not decreasing. What is attracting the buyers? Good capitalinvestment, high standard of living, reliable legal system and, as a bonus, proofof a high personal social status – these are the main reasons keeping  interest towards property in England steadyfor many years.

It is one of the most successful countries of theworld. London, its City district to be precise, is an international businesssymbol attracting successful and well-to-do people from all over the world.

A great number of different banks and financialinstitutions are concentrated here, a large amount of deals are made, and newbusiness contacts are established.

Besides, England is a country of century-longtraditions and rich cultural, historical, and legislative heritage.

London, the capital of Great Britain, and itsoutskirts are the most popular in terms of buying property considering theforthcoming 2012 Olympic Games.  The mostprestigious regions are Belgravia, Chelsea, Notting Hill, Westminster, Soho,Knightsbridge, South Kensington, Holland Park, and some other centraldistricts. Entire blocks of expensive mansions only within the reach ofextremely rich people are located here.

The price of a mansion can fetch 3 million poundssterling.

Cheaper property in the price range of 200 – 600thousand can be found in the regions with a less developed infrastructure,located further away from the center, which are therefore not as prestigious. Aforeigner can buy any property in England either in freehold or leasehold. In thecase of freehold, a buyer purchases the right to the property as well as theland. All privately owned property is sold on these conditions.

In the case leasehold, a buyer receives the ownershipof the building while the land is being rented for the period from 1 to 999years. It is mainly apartments in blocks of flats that have these terms ofsale. Buying such an apartment you should enquire about the land lease periodas it has a significant effect on the value of the apartment.

For a foreigner to get a mortgage in England is not aneasy thing to do, but it is possible with the right approach. It is necessaryto provide a number of documents and what is the most important to prove thelegality of the buyer’s income. The amount of credit available for anon-resident does not exceed 70% of the property value and is given for theperiod of 25 years. The down payment is not less than 20-40%.   

There was a temporary benefit introduced in 2011 forthose buying their first property in England by increasing the tax-freethreshold value of the property from 150 thousand to 250 thousand. This benefitis valid untill 25th March, 2012.

It is quite difficult to choose a property that wouldsatisfy all your individual requirements, that is why all the deals arearranged through an estate agency and with the help of an experienced lawyer.In order to go through the whole process from beginning to end it is necessaryto rely on the professionals to reduce time and costs on choosing a property,studying the legislation, and visiting different establishments.

There are a number of special features related to thebuying of a property in Great Britain which are not familiar in any otherforeign property markets.

For example, there is a notion of “gazumping” whichsimply means that a seller after he has signed a preliminary contract says thathe has received a better offer and wishes to break the contract if the buyerdoes not agree to equal or better the other party’s offer.  Generally, as a rule, it is no more than atrick, but a buyer who intends to buy a given property is forced to makeconcessions. Another legal moment which is not familiar to foreigners is that abuyer is not responsible for any damages or flaws found on the property afterthe contract has been signed. In both cases it will be advisable to consult qualifiedpersonnel of consulting companies specializing in looking for property inEngland and who know all the nuances of the property market in the UK.

Having chosen the right property the buyer makes theseller an offer which is normally 3-5% less than the stated value.

When the agreement is made, both sides sign thepreliminary contract and the seller receives the deposit of 5-10% of theproperty value.

After the legal status of the property has beenchecked, sale contract is signed, and only after the final payment has beenmade, the documents are given to the Land Office to issue a title deed. In thecase of the buyer not paying within the period of time stated in the contract,the seller can demand compensation for breaking the contract. The deposit inthis case is not refundable. In 7 days after submitting the documents to theLand Office the buyer receives a title deed certificate and becomes full ownerof an English property.

“Attractiveness of buyingproperty in Great Britain for Russian Investors is mainly related to the futureprospects of the economic growth in the country. Buying property in Englandmeans prestige and stability, certainty about the future, practically no riskof losing money invested, gradual decrease of inflation, guaranteed profit fromrent, gradual increase of economic stability, and what is most important,governmental and legal security of property owners”.

Dinara Ismanova,

MBA (University of Wales), DMS (UCK London). DOM-INFOLtd, London.

See the whole article on pages 22-23 in International Residence magazine.