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The Singapore Resident’s Guide to Investing in UK Property

A Guide for Singapore Residents to Invest in UK Property

Are there restrictions for Singapore residents who want to invest in UK property? 

Singapore citizens face no restrictions when it comes to investing in UK property and do not require approval from the UK government to do so. However, Singaporeans will need to have residential status if they want to buy property to live in the UK.  Get information on UK visa and immigration requirements here.

If you are purchasing a property as an investment, always ensure that you choose a location that has good demand for rental property. Remove emotion from your purchase. Low vacancy rates will ensure that there is good demand for rental property, thus ensuring good returns on your investment.

One of the best cities to invest in the UK is Manchester with its fast-growing population and job opportunities, which has caused the demand for rental property to increase. Property here is more affordable than London, which is another very popular investment destination. Other popular English cities to invest in include Birmingham and Liverpool, which are also more affordable than London. 

Singapore citizens face no restrictions when it comes to buying UK property and do not require approval from the UK government to do so. However, Singaporeans will need to have residential status if they want to buy property for the purpose of living in the UK.
Singapore citizens face no restrictions when it comes to buying UK property and do not require approval from the UK government to do so. However, Singaporeans will need to have residential status if they want to buy property for the purpose of living in the UK. Image credit: Towfiqu Barbhuiya, Unsplash

It is always important to do your research before deciding where to invest in the UK. CSI PROP has developed the only property investment checklist you will ever need to help pick the right property in the right location for lucrative returns. This checklist which features the G.O.L.D.M.I.N.E. Strategy © and S.A.F.E.T.Y. 1ST Criteria © is developed from more than 16 years of personal property investment experience, successes and failures. It is applicable for investors who have little time or experience; and adaptable in a good, bad or average market. 

Types of UK Properties that Singaporeans can Invest In  

There are no limitations to the type of privately-owned property that Singaporeans can buy in the UK. You can choose from landed houses, which includes detached houses, semi-detached houses and terraces; or flats/apartments. 

The Cost of A UK Property 

UK property can often be much cheaper than Singapore property. Based on this survey, it costs approximately £12,800 (around SG$24,000 Singapore Dollars) per square metre for a property in the UK compared to £14,557 (SG$27,400) in Singapore. Property outside London is even cheaper, and can go for £3,000-£4,000 (SG$5,500-SG$7,500) per square metre or less. This works up to about 25% of the price of Singaporean property.

Use a currency converter to convert your budget in Singapore dollars to the British Pound to help you gauge what you can afford. 

UK Home Loans for Singapore Residents 

Although there are not as many lenders offering non-resident mortgages, it is not impossible for Singaporeans to get a UK home loan or mortgage. Naturally, it is easier to get a UK mortgage if you are residing in the UK, but this depends on your visa, job and income level.

Some Singapore-based mortgage lenders also offer loans for Singaporeans to buy property in the UK. Mortgages can be in UK pound (GBP) or Singapore dollar (SGD). 

Finding A UK Investment Property

You can approach any real estate agent to find a UK property to invest in. Alternatively, check out property portals like Rightmove or Zoopla. You can also approach education and investment consultancies like CSI PROP, who has great access to private deals, or buy direct from a developer/ seller. 

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Note that estate agents in the UK work for the seller, and receive fees from the seller. Buyers do not need to pay for the estate agent’s fees for their help to find or buy a property.

Singaporeans can choose from landed houses, which includes detached houses, semi-detached houses and terraces; or flats/apartments. Image credit: Berkeley Homes
Singaporeans can choose from landed houses, which includes detached houses, semi-detached houses and terraces; or flats/apartments. Image credit: Berkeley Homes

Making An Offer

UK property prices are usually negotiable, similar to Singapore. It is common for property sellers/ vendors to set a higher asking price than they are willing to sell for. It is also normal for buyers to make a lower offer than the asking price. However, buyers will need to offer the asking price or increase the amount for properties that are competitively priced. 

To find out about the condition of the property you intend to purchase, seek the services of a property surveyor after your offer has been accepted. The price of the survey is normally borne by the buyer.

Difference Between Buying Property in the UK & Singapore

Conveyancing is the process of transferring legal ownership from the seller of a property to a buyer. The services of a solicitor or professional conveyancer is necessary for this transaction and both buyer and seller will need to pay their own legal fees for conveyancing. 

The estate agent or seller will complete a memorandum of sale once a price has been agreed upon. A memorandum of sale is not the same as an option to purchase (OTP) as both buyer and seller are allowed to back out of the purchase before the legal contract is exchanged. No deposit is required at this stage although it is normal to pay a reservation fee for new-build properties. 

Once your solicitors are done checking everything e.g good title and encumbrances affecting the property, they will exchange contracts with the seller’s solicitor. A non-refundable deposit of 10% (typically) may be required before the sale is legally binding.

You will then agree on a completion date, which is when you will need to pay the balance of the purchase price before receiving the keys. Your solicitor will then register the sale or title with HM Land Registry.

Freehold vs Leasehold Property

The UK has both freehold and leasehold property ownership but they are not entirely the same as in Singapore. 

With freehold property in the UK, the property and land is owned by the buyer whereas for leasehold property, the property owner only owns the property but leases the right to occupy the land from the freeholder or land owner (usually a private company) for a stipulated number of years. 

When investing in leasehold property, it is important to check the duration of the lease remaining and other applicable terms and conditions. Extending the lease on a leasehold property is possible, but chargeable.

Note that flats/ apartments in the UK are usually leasehold properties based on the above system. They are not owned under a strata title system like in Singapore. Unlike in Singapore where management corporations are engaged with the involvement of the owners, in the UK the flats are maintained by a management company or agent, which is usually directly appointed by the freeholder.

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Taxes are due to HMRC if you collect rental income from your investment property, but the good news is that many of the expenses for the running of your property is tax deductible.
Taxes are due to HMRC if you collect rental income from your investment property, but the good news is that many of the expenses for the running of your property is tax deductible.

UK Stamp Duty 

Stamp Duty, also known as Stamp Duty Land Tax (SDLT), is a tax that must be paid by the buyer of a UK property, and is similar to the Buyer’s Stamp Duty (BSD) in Singapore. SDLT is payable as a percentage of the actual sale price but varies according to the value of the property and status of the buyer. 

If you already own a property in the UK, you must pay an additional or higher rate of SDLT of 3% on top of the normal rate and inclusive of the additional 2% if this is your second property. Non-UK residents will have to pay a non-resident rate of 2% in addition to the normal rate, similar to Singapore’s Additional Buyer’s Stamp Duty (ABSD).

Get more information about Stamp Duty, here.

You can also use this calculator to work out how much SDLT you have to pay.

Other Applicable Costs When Investing in UK Property 

Other costs need to be factored when investing in UK property, which is not unlike the Service and Conservancy charges. For example, you will need to pay Council Tax annually for council services. This is based on the value of your property and payable by all property owners. However, if you are renting out your property, Council Tax will be paid by your tenant. 

Annual service charges will also be applicable for flats or apartments and shared between owners to cover the cost of maintenance.

Property Taxes in the UK

If you are collecting rental income on your UK investment property, you may need to pay income tax to the HMRC, depending on the amount of rental income collected and your tax position in the UK. The good news is that many of the expenses for the running of your property is tax deductible.

When you sell your property, you may have to pay Capital Gains Tax.

Note that the future inheritors of your property may also need to pay Inheritance Tax

Tip: Make sure you get expert tax advice when investing in UK property. Find out how it affects your tax situation in Singapore and status when owning property in Singapore. Note that all this is applicable if you are investing in property in England. If you buy property in Scotland, different property rules apply. 

Want to invest in multiple properties without worrying about TDSR and learn how to 3x your cash flow? Join our Breakthrough Property Investment & Financing Masterclass & find out how to generate 20%++ ROI and maximise your investment returns. On Saturday, 25th June, 3pm – 5pm. Sign Up Herehttps://bit.ly/signup25june

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