Taking an extended vacation? Continuing your education? On temporary work assignment? Whether you’re considering investing or moving to the UK permanently or for a shorter term, you’ll appreciate our guide to renting and buying property in the UK.
Know your terminology
In the UK, trash cans are bins, paper towels are kitchen paper, chips are crisps, and the list goes on. Just as you’ll want to familiarize yourself with new names for certain items, you’ll also want to learn about some of the similarities and differences between UK and US real estate terminology. Here’s a brief sampling:
|US term||UK term|
|Realtor or real estate agent||Estate agent|
|Finance charge||Total charge for credit|
Renting in the UK
Can American citizens rent apartments in the UK? The short answer is yes. If you’re simply looking for vacation accommodations, you’ll want to look into short-term let, which basically means finding rentals offered on Airbnb and similar sites or going through an Airbnb management agent. You’ll need to have an appropriate ID and follow the site’s booking guidelines. Be sure to ask questions if you’re uncertain about anything at all.
While you might like the idea of moving from one short-term rental to another and experiencing different neighborhoods along the way, long-term rentals are also available.
In London, for example, laws place limits on the amount of time a landlord may offer a rental property over the short term, so long-term rent might be preferable. Houses, cottages, semi-detached homes, and flats are available in many areas, so your needs and preference will be met.
You’ll find that many UK rental properties are fully furnished, which makes the prospect of renting even more convenient.
Whether you’re searching for a short- or long-term rental, you’ll want to remember that in the UK, the differences between flats vs apartments are minimal. In addition, you’ll want to check average UK rental costs before making a decision.
What you need to rent a home in the UK
Most UK rental contracts are for six months to one year, often with the option to extend tenancy. It’s likely that if you go through an online letting agent or a private landlord you’ll be asked for rental references and a security deposit. As in the US, this is likely to be equivalent to one month’s rent. You might also be asked to provide:
- Identification / passport
- Visa or work permit
- Employment contract or letter from your employer
- Proof of income
Ask the letting agent or your potential landlord for a complete list of what they’ll need so that you have it on hand when the time comes.
What you need to buy a home in the UK
While it’s true that American citizens can buy homes in the UK, you’ll eventually need to change your citizenship if you plan to live there full-time.
Many of the same common-sense principles that apply to real estate transactions are applicable to property purchases in the UK. For example:
- Maintain a good credit rating
- Set a budget
- Learn which neighborhoods you’re most interested in
- Have a down payment and proof that it’s ready to be spent
- Have your passport ready
- Have at least three months’ worth of bank statements
- Have at least three months’ worth of pay stubs
In addition, you should seek outside assistance. Until you’re familiar with the ins and outs of UK home buying, it’s a very good idea to find:
- An independent financial advisor (IFA)
- A conveyance solicitor (that’s a lawyer, in American terminology)
- An estate agent
Together, these professionals will help pave your way toward owning a home in the UK.
Leasehold vs. freehold
If you’ve ever purchased a home in the United States, then you know that most properties come with the land they sit on. This isn’t always the case in the UK, where there are two main types of property:
- Leasehold: You own the property but someone else (known as the freehold owner) owns the land.
- Leaseholders own their property only for a certain amount of time, which the contract defines.
- Freehold: You own the property and the land
Property taxes in the UK
Just like Americans, UK property owners pay taxes. This means you’ll owe if you purchase a home instead of renting.
You will need to obtain a national insurance number to become a UK taxpayer, and you might need a tier 2 visa as well.
All things considered, it’s a very good idea to rent a home in the UK before you buy, as you’ll need a base of operations. You’ll get a better feel for different neighborhoods, and if your stay ends up being shorter than anticipated, you won’t have to worry about costs associated with selling the home.