Your Guide to Buying UK Property as a US Citizen



Are you looking to buy property in the UK? Whether you’re an American expatriate living across the pond, have familial ties to the old country or simply recognise the value in investing in the UK property market, there are some key differences in the process between the two countries that you should be aware of.

In today’s blog post, we’ll be going over some of the most important of these differences and some of the growth that the Scottish property sector, in particular, has seen in recent years. We’ll also underline the importance of working with a local property professional to make your investment as profitable as possible.

A key difference in buying property in the UK vs the US

Typically, Americans are used to working closely with a real estate agent throughout the house buying process. This agent finds and shows buyers properties that fit their criteria, making the process of finding your dream property easier.

In the UK, however, it’s usually the buyer themselves who finds suitable properties for themselves and gets in touch with the property agent charged with selling it to arrange a viewing. This can be a considerable inconvenience for American property investors, especially if they have limited knowledge of the local property market or if they don’t live in the area themselves.

Luckily, more support for buyers is becoming available in the UK now, with property investment managers like those at Cox & Co able to help buyers by sourcing suitable properties for their investment and supporting them throughout the buying process. Working with a property investment specialist also ensures you factor in additional costs like stamp duty, land registry fees and more.

Additionally, working with a professional like this gives you access to great off-market investment properties and private sale opportunities you wouldn’t hear about otherwise, making them an indispensable resource.

Potential pitfalls of getting a UK mortgage

US citizens commonly face some additional hurdles when applying for a British mortgage –  even if they live in the UK. The 2010 Foreign Account Tax Compliance Act requires US citizens to report their non-U.S. financial assets annually to the IRS. The amount of paperwork involved with this can be daunting, and as a result, many British high street lenders have been even warier than before of granting mortgages to Americans.

However, there’s a good number of private lending institutions and non-bank lenders willing to submit the necessary disclosure agreements and offer Americans mortgages, even if their salary is paid in a foreign currency or if they don’t live in the UK themselves.

 Working with a specialist mortgage broker with strong relationships with these lenders is usually a requirement for getting access to these mortgage products, so you’ll need to find a broker willing to do the work and find you the best possible financing option for your investment. Cox & Co offers exactly that.

Growth opportunities in the Scottish property market

While many Americans tend to first think of London when considering UK property investment, there are several reasons to look up to the north instead. Despite the recent weakening of the pound sterling, London remains one of the most expensive cities in the world, and the most expensive one in the UK, so investing in the capital’s property market usually requires a hefty downpayment.

Meanwhile, England’s northern neighbour, Scotland, has seen steady increases in property values while London’s prices have stayed largely the same. The Scottish capital, Edinburgh, its close neighbour Glasgow and the commuter towns surrounding them provide a fast-moving property market, excellent growth opportunities and impressive rental yields for would-be investors.

Scottish property prices have risen impressively in recent years. In November 2019 it was reported that the average house price rose by 2.4% in Scotland while prices rose by 1% in England and fell by 0.4% in London in the past year.

Additionally, the average rental yield in Scotland is now over 5% higher than in London and rent is typically higher in proportion to property value in Scotland, which means it’s often easier for you to build a portfolio of buy-to-let properties in Scotland than in the south of England.

How we can help

Professional advice in the location you’re looking to buy in is vital for would-be American property investors. With so much complexity around the different aspects of buying a house in the UK, you need someone by your side who can support you through the whole process.

Cox & Co offers just that, with highly knowledgeable and fully customised support for your property investment every step of the way. We have strong experience working in the Scottish property market and with American investors. We also pride ourselves for our good working relationships with a host of private lenders to ensure you get the best deal possible.

To find out how our investment managers can help you, get in touch with us today to take the first step on your way to property investment in Scotland.

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