It wont have escaped you that the UK government introduced a new route to UK citizenship for British Nationals Overseas (BNO) in January 2021. You can find more information on the UK government website here.
If you’re applying for a BNO visa with a route to citizenship your ultimate goal, then housing for you and your family will of course be a priority as part of your planning.
This is of course a complex path and can’t be covered one short article. So as a starting point, we’ve listed the top 10 tips to help you with your preparation.
BNO – TOP 10 TIPS
- Understand the differences between the UK and Hong Kong buying process.
Our comprehensive Buyers Guide to the UK will help you understand the process in detail, so there are no surprises and you know what to expect. If you’d like a copy of our guide just email me at [email protected].
- Think carefully about why you want to buy. Are you buying a home to live in, or as an investment property?
Your criteria will be very different and if they aren’t different, they should be! Only you know what your criteria are if you’re buying a home. If you are buying a property for investment, check out our articles which will illustrate what your investment criteria should be.
- Make sure you understand all the related costs to your purchase.
When you buy a property, you have to pay for more than just the property. You’ll incur additional costs and on-going operating costs. Make sure you are clear on all of these before you commit to buying a property. Our Buyers Guides to the UK has a lot of detailed information.
- Stamp Duty Land Tax (SDLT) Applies to UK property purchases.
Similar to the Hong Kong, stamp duty in England and Northern Ireland is a progressive tax. Additional surcharges apply depending on whether you are purchasing a second home or investment and if you are a foreign purchaser or not. More information can be found in our Buyers Guide to the UK.
- Sales fees are paid by the vendor
Unlike Hong Kong, if you are buying a second hand or new build property in England, the sale fees are paid for entirely by the Vendor.
- You can borrow from UK banks
Some banks in England will lend to foreign purchases on many UK properties. This will of course be subject to you and the property meeting their criteria, but speak to a reputable independent mortgage broker who has access to lenders in Hong Kong, the UK and other parts of the world so you get the best deal.
- UK banks allow interest only payments
Some types of mortgage in the UK allow you to repay only the interest each month, with the capital being paid at the end of the term. This could help to reduce your monthly payments. Speak to a reputable independent mortgage broker to find out more.
- Should you buy second hand or new build property?
Second-hand properties can be cheaper than new build properties, because they do not have the ‘new build premium’ attached to the price. Whilst this can save money in the short term, this may be a false economy – if you purchase a second hand property, you will most likely incur higher property management and maintenance costs. You may find renovation costs to bring the property up to date are substantial and time consuming. Will the costs of renovations, repairs and time be offset but the initial price you paid for the property? Read more about this our article here…
- Check the track record of the developer.
If you are buying a new build property, be mindful that the quality varies between developers. Buy from a reputable developer through a reputable agent. Pay attention to their track record and follow our Buyer’s Guide to make sure you’re buying a new build property that comes with all the relevant protections in place. A good way to see how happy customers have been with developers are review websites. Trust Pilot is a great place to start – you can access their website here.
- Be mindful of introducers and referrers
If anyone is ‘referring’ you or pushing you to a particular property or development, ask them what fee they are receiving from the developer or agent. If they are being paid a fee (which can be up to 5% of the purchase price) this is 5% that you will not be to negotiate from the asking price when you buy the property. If you’re buying a property worth £500,000 – the refer could be being paid £25,000. That’s £25,000 you could have negotiated from the sale price if the referrer wasn’t involved. Would you rather pay £500,000 for the property or £475,000? Your associated costs will be less too, including your stamp duty and possibly your conveyancing fees. It’s worth asking the question!
We hope you’re found our top tips useful and let us know if you have any questions! If you’d like impartial expert advice or a copy of our Buyer’s Guide to the UK, you can email me at [email protected].