Buying Property in the UK: My Clients’ Journey

It is a great privilege to work with my clients like you who specifically target Mayfair in London to make your next property investment.

Mayfair as an area in London was being developed comparatively only recently during the last couple of hundred years.

Historically, it was the place to be and make the mark with extravagant homes. Some proprietors in their pursuit of fortunes became insolvent as extravagant ideas are costly to fulfil. Also predicted fortunes may easily tilt.

It is still the place to be and embrace the extravagant way of living. 

7 Tips When Buying Property in the UK

1. What is the purpose of the property?

The purpose of the property is important as it will dictate the correct legal arrangements that may need to be made in order to secure the property long-term.

Usually, there are two main purposes for the use of a property: personal or investment.

You need to be clear at the outset whether you are going to use the property for your own use or this is purely an investment asset to be utilised as a long-term investment.

It is important to distinguish between these two uses as the legal arrangements will need to be considered and important choices will need to be made based on the primary use of the property.

Sometimes, the intended use is a mixed one or you have not really reached your decision. However, this decision is a very important one and will produce a number of outcomes going forward.

Therefore, you have no choice but to make up your mind and make this decision.

2. Freehold or Leasehold?

If your desired property is a flat and not a townhouse, it will be a leasehold property.

I leasehold property means that even if you acquire the piece of real estate, you will still be responsible for paying the annual rent and other charges to your landlord for the use of land.

It is common to have leaseholds for up to 99 years. However, you need to be very careful if the current property lease is expiring and you will need to take the necessary steps to secure the extension of the lease.

You need to be aware that sometimes these leases are no longer renewable. This is what you need to be fully aware of before you consider making the purchase.

For instance, most of the property in Mayfair is owned by Grosvenor Estates. You are likely to receive letters from your landlord to upkeep the property up to the standard and if you fail to do so, they are likely to take steps to take it away from you.

Freehold property means that the land also belongs to you as you buy the property and you own the property outright.

This type of property is not easy to come by especially in built-up areas. However, this may be worth the investment if you discover such opportunities.

3. Residential or Commercial Property?

The residential and commercial property both took a hit during the global pandemic. However, now both types of property are swiftly recovering and commanding great value.

Residential property whether it is for personal use or investment purposes is best described as the property that will be used as a private residence only.

A commercial property may have multiple uses. For instance, it could be a block of flats with a commercial outlet on the ground floor, such as Tesco, M&S or Waitrose.

You are likely to find that some banks are more eager to finance commercial property more than the residential one. 

You may also discover that lending terms are by far more favourable for commercial properties.

4. Do We Keep the Current Legal Arrangements in Place?

As you are making the offer the seller may often ask you whether you wish to keep the current legal arrangements in place.

Most of the property in the UK, especially the investment properties are held in onshore or offshore legal structures.

For instance, these may be English, BVI, Cypriot or Seychelles legal entities.

This is where being clear whether it is an investment property or a property intended for your own and your family’s main dwelling will dictate appropriate legal arrangements.

What you need to know is this:

• If the property is intended as your own and your family’s primary residence, the more appropriate legal ownership arrangement is trust. Depending on your circumstances this may be an English or an international offshore trust;

• If the property is an investment property and you are an international person, offshore corporate ownership may be considered. You will also need to be aware that offshore jurisdictions vary immensely. You will need to make sure that the current chosen jurisdiction is the right one for you.

5. What are Your Banking Arrangements?

Buying premier property in the UK may be one of the best investment decisions you will ever make.

Depending on your personal circumstances, network and the network of your professional advisors, you may be spoiled for choice as:

• Arrangements may be put in place to finance the purchase of the property in their entirety from overseas. Some banks in Liechtenstein or Singapore may be prepared to go the extra mile;

• Some of the Swiss private banks based in London may offer much better real estate financing options than their English counterparts both private and high street banks. Swiss private bank lending terms may be also more attractive when compared to Sharia law compliant Arab banks operating in London.

6. UK Tax Considerations and Reporting Requirements

In the past, offshore structures were used to by-pass a number of UK tax requirements that apply to the UK based persons.

HMRC made a big effort to catch up and apply equal or less favourable tax treatment to investments made in the UK when utilising offshore legal entities and trusts.

In certain circumstances, it may still be advisable to make investments in the UK through offshore corporate and trust structures. You will need to speak to your UK tax and international structuring advisor.

7. Who is Your Professional Advisor?

The choice of your professional advisor will make it or break your next UK investment decision.

I always encourage you to speak to expert UHNWI advisors like myself as you invest, operate or relocate to the UK.

It is more likely that you will speak to multiple advisors in the areas of their expertise. 

However, you need that additional layer of expertise and an advisor who will understand your personal circumstances, the investments you are going to make and the applicable UK tax, legal and regulatory requirements as well as any UK immigration concerns.

Professional Advisor Ensures Success

As you consider the different steps you need to take and the many considerations you may have as you invest, operate or relocate to the UK.

The choice of your professional advisor may be the only one to be able to guarantee your success.

Not only you will need to understand the specifics of the real estate market and property you are interested in buying, but also the steps that you need to take now in order to secure lasting results to withstand the test of time.

Book a call with me to discuss your Global Wealth Strategy and necessary onshore and offshore legal arrangements to protect your global wealth. You may submit your enquiry here.

You will be first guided to a payment page when you choose “book a call” option. After making the payment, you will be able to choose the most convenient date and time for our Zoom meeting. You can report a payment issue here.

Saule Voluckyte, M.A.E.S, LL.B, FAIA

I have been working exclusively with UHNWI in Mayfair, London since January 2008. I built specialist knowledge and expertise required to serve ultra high net worth individuals investing, operating and relocating to the UK or Switzerland.

Within the industry, I am the single adviser who is able to traverse the different areas of expertise and bring a comprehensive approach across: global structuring, UK immigration, international taxation and FOREX to develop their global wealth strategy, while they build, grow and expand their wealth worldwide.

Previous experience as one of the senior advisors for the government, made me a go-to person when delicate and uncomfortable scenarios involving heads of state need to be handled with care and preserve privacy.