Investing in UK property from Australia

If you’re an Australian citizen, or a British expat living in Australia, you can still invest in property in the UK

The UK housing market is a hugely attractive investment space thanks to its historic strong house price growth and high rental market demand, and it has proved to be a particularly stable and resilient asset class over the years compared with many other investment options.

Buying UK property from Australia may present certain challenges, such as the time difference which may make communication more difficult, so working with a trusted, experienced adviser or property investment consultant can be a good option to ensure a smooth process.

Need advice about UK property investment from Australia? We’re here to help

To help you navigate the world of UK property investment, the team of property experts from BuyAssociation have detailed some of the key considerations when it comes to investing in UK property from Australia.

1. How to find a property

One of the first steps to investment is of course finding your ideal property, which will depend on your overall goals. Do you plan to move to the UK from Australia, or rent it out for an additional income before selling for a profit in later years, for example? This will help you decide which area in the UK to focus on, and you should do some independent research into the housing markets of each area.

Once you have narrowed your search, contact a specialist in this area, which might be a national or international estate agent with experience of working with buyers from Australia, or a property investment consultancy experienced in finding opportunities for overseas investors. You can also find a property independently, using popular portals such as Rightmove and Zoopla, although you might not get the best off-market deals.

If you’re unable to travel from Australia to view the property, most agents will offer you the option of conducting a virtual viewing.

flats apartments

2. Property types – leasehold or freehold?

In the UK property market, you are likely to come across the terms ‘freehold’ and ‘leasehold’, particularly if you’re looking at buying a flat or apartment.

Essentially, if you buy a leasehold property, you will own the property but not the building or land it sits on. The building/land is owned by a freeholder or landlord, and you will often need to pay ground rent and a service charge. This is extremely common for flats in the UK, and doesn’t normally pose any issues to the owner. It means you are not responsible for the building itself. Before you proceed, it is crucial to know how many years are left on the lease, as if there are less than 80 years you may struggle to get a mortgage, as well as the terms of any ground rent or service charge payable.

A freehold property is one where you own the building and the land that it sits on, and most houses in the UK are freehold. You are solely responsible for all maintenance of the building and grounds of a freehold property.

buy-to-let mortgages

3. Mortgage and deposit

If you’re purchasing a UK property from Australia and you’re not a cash buyer, you will need to secure a mortgage either with a local lender in Australia or with a UK lender that caters for foreign buyers, such as HSBC or Santander. You should have access to both residential and buy-to-let mortgage options from a specialist lender.

While UK citizens can often access mortgages with just a 5% or 10% deposit, overseas buyers tend to require a higher deposit amount of 20% or even 25%. How much you can borrow and the mortgage rate you can secure will depend on the lender, your circumstances, and the current interest rate situation at the time of application.

Before you can make an offer on a UK property, you must obtain a ‘mortgage in principle’ from the lender, which will confirm to the seller or agent that you can borrow the amount required to purchase the property. This tends to be valid for six months.

Renters Reform Bill law legislation

4. Solicitor and surveys

Once you’ve made an offer on a UK property, it is time for the legalities, where you will need to instruct a solicitor or conveyancer to handle the purchase. Again, it might be useful to opt for a solicitor who has experience in dealing with Australian buyers, in case there are any additional requirements. If you’re working with an agent or property investment consultant, they might be able to recommend a solicitor.

At this point, a valuation survey will also need to be carried out by the lender, where they will check that the price you are paying for the property is what it is worth before they can approve your mortgage. This will not apply if you are a cash buyer.

You can also instruct a professional chartered surveyor to carry out an inspection on the property, ranging from a basic condition report to a full building or structural survey, which may be appropriate if you are buying an older property.

Legal contract

5. Exchange of contracts & completion

At this stage, provided the valuation survey and any other surveys were unproblematic, and both the buyer and seller are happy to proceed with the agreed price, you can now finalise your mortgage offer with the lender and instruct the solicitor to proceed with the contracts.

You will then receive a contract from the solicitor to go through and sign, and after this point the ‘exchange of contracts’ will take place. After this point, you can no longer pull out of the sale, and will need to ensure any buildings insurance is in place from this date.

A date will also be set for ‘completion’, which is the day you officially get the keys to your new property. You will need to pay any outstanding bills to the solicitor or lender at this point.

Building regulation changes

6. Transfer of ownership – title deeds

In the UK, all residential properties have title deeds, which are paper documents to show the chain of ownership, although they are now also stored electronically by HM Land Registry. Upon purchase of the property, the solicitor will register the transfer of ownership with the Land Registry.


7. What taxes will I need to pay?

The UK tax system can seem complex for anyone buying UK property from Australia. Essentially, there are three main taxes that you might need to know about:

– Stamp duty land tax (SDLT): This is a tax on any property purchased over £250,000, and the amount you pay depends on the value of the property. For overseas buyers, an additional 2% surcharge is also applied.

– Capital gains tax (CGT): If you sell a UK residential property that is not your main home, including if you are an overseas owner, it will be subject to capital gains tax, which is based on any increase in value of the property.

– Income tax: If you let the property out and make a profit, you may need to pay income tax on your earnings.

For more information on tax, view advice from our experts or visit the government’s website.

landlord insurance

8. Do I need insurance?

For UK property, buildings, contents and landlords’ insurance are not compulsory, but are highly advisable. Buildings insurance can cover any damage or repairs needed to the external or structural elements of a property; contents insurance can cover furniture or fittings and possessions; and landlords’ insurance can cover things like loss of rent or damage caused by tenants.

tax stamp duty

9. Do I need a UK bank account?

Opening a UK bank account can be complex if you’re an Australian citizen and you don’t reside in the UK, so it is best to seek independent advice in this matter. If you are planning to invest in a property to rent out, having a UK bank account can certainly be beneficial, as it makes it easier to receive rental payments, as well as to ensure you are paying the correct tax with HMRC.

Find the perfect UK property with BuyAssociation

BuyAssociation is a leading investment consultancy with offices in Manchester, London and Hong Kong. We have a wealth of experience in dealing with both resident and non-resident investors, along with a network of expert partners who can help with all aspects of your property purchase in the UK. Get in touch with one of our investment specialists to find out more.


Join over 26,000 property investors

Access advice and unique property investment opportunities directly from leading developers throughout the UK