Buying in London: A Guide for International Buyers, Part 1: Pre-Purchase
In the first instalment of our two-part Guide for International Buyers, we hear from Jo Eccles, founder and managing director of prime central London buying agency Eccord.
Jo Eccles, Eccord.
At LA London, we undertake a large number of projects for clients from overseas – particularly at the moment India, the Middle East and the USA. Our understanding of the UK’s planning system, building regulations and other statutory duties means we can guide international clients through the various restrictions imposed by conservation areas, higher-risk buildings (HRBs), listed buildings and private estates.
Prior to any renovation or building project, however, buyers from overseas have to navigate the often-complex process of finding, financing and purchasing a property here in the UK. In the first instalment of our two-part Guide for Overseas Buyers, we sought advice from Jo Eccles, founder and managing director of prime central London buying agency Eccord. Jo generously shared her four key recommendations for clients buying in the capital.
1. Think long-term
The property market in London no longer offers a quick bang for your buck – or riyal, rupee or euro. According to Jo Eccles, “It’s incredibly rare these days for anyone to buy in prime central London purely for investment. Prices are still below the 2014 peak, and while rents have increased considerably in the last few years, so have landlords’ costs – including stamp duty, mortgage repayments and maintenance – meaning net yields can be as low as 1 to 1.5%.”
For that reason, Jo recommends that clients plan to own their property for at least 7 to 10 years. For those looking for a short-term home in London, it may make more sense to rent.
Of course, London and the UK offer benefits beyond ROI, whether it’s employment opportunities, the quality of education or the lifestyle. For American buyers, who represent a third of Jo’s client base, London offers a home from home in the face of political volatility, with US citizens increasingly relocating to the UK: “It used to be common for Americans to rent for long periods before putting down roots, but in the last 12 months that’s completely reversed and they’re committing to purchases straight away, or even before they arrive.”
2. Choose your location carefully
An LA London residential project in the sought-after area of South Kensington.
Like any large city, London is made up of dozens of distinct neighbourhoods, each of which caters to different buyer demands. American and European buyers seeking a family home, with great local shops, restaurants and schools, often choose “Quintessentially London locations like Chelsea, Kensington, Notting Hill, Primrose Hill, Hampstead and St John’s Wood,” says Jo.
If it’s space you’re after, St John’s Wood in particular offers a greater variety of architecture, including homes with off-street parking, larger gardens, and more lateral living space: “Many of the houses are laid out over just three floors, so a buyer wanting 5,000ft² or more can achieve it without the vertical living of Little Venice or Notting Hill,” Jo says. London’s typically vertical architecture “can be quite an adjustment after the spacious lateral apartments of Dubai or the vast, open-plan family houses of west-coast USA.”
Buyers from the Middle East who are spending time in London primarily for work or shorter stays may opt for the prestige and convenience of areas like Mayfair and Knightsbridge: “There’s always so much going on in Mayfair, so international homeowners who are flying in for a week can enjoy everything they need on their doorstep, from their member’s club to excellent local restaurants, elite gyms and the world’s best boutiques.”
LA London have completed many projects in the always-desirable Mayfair
Just as different areas of London offer different benefits, so buyers will encounter distinct “micro markets” in London, Jo explains: “The approach a buyer should take will vary enormously in an area such as Richmond or Barnes, where many vendors will be owner-occupiers selling much-loved family homes, versus discretionary sellers of pied-à-terres in Belgravia, for example.”
Understanding the nuances of different locations speeds up the search process and helps buyers to focus on the areas that offer the accommodation and lifestyle they seek.
3. Plan for high upfront costs
Now representing up to 19% of the purchase price, stamp duty is a major financial outlay for second-home buyers who are not UK tax residents.
“International clients are often shocked when we set out the figures for them before starting a search,” says Jo, “but putting this into context, property tax in the UK is a front-loaded, one-off payment on completion of the purchase. Aside from council tax, there are no ongoing property ownership taxes – unlike in many other countries with high annual property taxes.”
Jo also says it’s important for overseas clients to be aware that buyers and sellers in England can pull out of a transaction at any point before exchange of contracts. This can leave parties considerably out of pocket if they have already paid out on conveyancing and surveys.
LA London also have extensive experience renovating properties in Belgravia
4. Pick a reliable team
The most important aspect of any successful property purchase is the team you choose. Working with a buying agency like Eccord gives international buyers access to properties being sold off-market, of which there are many in prime central London:
“Over the last twelve months, 60% of the properties we acquired for clients were bought off-market,” Jo says. “We now typically speak to a minimum of 50 individual selling agents and brokers during a property search to ensure we have uncovered every potential buying opportunity.”
A good buying agent will also introduce you to areas of London you may not otherwise have considered. And once contracts have been exchanged, they can put you in touch with recommended removals companies and tradespeople.
It’s also important to appoint a reputable lawyer as early as possible – this will indicate to the selling agent that you are prepared to move quickly. And your chosen surveyor should have extensive experience with the type of property you’re buying, ideally in the neighbourhood in which it’s located, and Jo recommends a Level 3 Building Survey for high-value properties in London.
A Grade II-listed townhouse in Knightsbridge, converted by LA London from apartments into a family home.
If you’re planning to renovate or extend the property you’re purchasing, specialist London architects like LA London can advise you on potential planning challenges relating to listed buildings, conservation areas and higher-risk buildings.
Thank you to Jo Eccles for her invaluable insights on the property search and purchase process in prime central London. You can find out more and contact Eccord by visiting www.eccord.com
If you’re an international buyer planning a project in London, please do contact us for advice – we’d be delighted to help. And look out for the second part of our Guide for International Buyers coming soon.