Buying guide for Indonesian investors in London

Planning your finances

Set a clear budget to work around before beginning your property search in London — whether you plan to purchase outright or secure financing. As an Indonesian buyer, check with different banks to see if you can apply for UK mortgage loans. It's also essential to carefully assess the different financing options available. If you're buying to let, a buy-to-let mortgage, which typically requires a larger deposit, is an ideal option. If you are looking at purchasing property for personal use, a residential mortgage is best, though it often carries higher long-term costs.

Remember: In line with UK regulations, cash buyers need evidence of their funds' source. This step is crucial for ensuring compliance with anti-money laundering laws.

Mortgage eligibility

Your mortgage eligibility depends on the property's intended use. UK lenders assess overseas as well as domestic borrowers based on income, loan-to-value ratios and repayment terms. Many developers accept deposits as low as 10-15%; however, a larger deposit can reduce the lender's risk and speed up the approval process. Working with a reputable mortgage broker can simplify this process. As a general guide, aim to borrow around 4.5 times your annual income for manageable monthly repayments.

Documentation

When purchasing property in the UK as an Indonesian buyer, you'll need to present certain documents, including

• Proof of identity (a valid passport)
• Proof of address (utility bills, bank statements or a driver's license, all dated within 3-6 months)
• Proof of funds (bank statements covering 3-6 months and supporting documents such as payslips or business income records)

Please note All documents must be certified by a UK-based solicitor, accountant or authorised notary.

Narrow down your search

Once you clearly understand your budget and investment goals, it's time to search for properties. With London's diverse property market, you can lock in on a contemporary studio apartment in central London or a Victorian home in the suburbs—London has something to match everyone's aesthetic. We recommend narrowing down your options and considering factors such as the property's location, size and purpose.

If prime central areas attract you, look for interesting options in Mayfair, Knightsbridge and Kensington. Meanwhile, younger buyers tend to opt for hip areas such as Shoreditch and most professionals often prefer Canary Wharf or City areas for easy proximity to workplaces.

Property ownership

In the UK, property ownership operates under three main title types: freehold, share of freehold and leasehold. Ensure you understand the title that best suits your investment needs. You'll also need to decide whether to invest in a new-build, off-plan or resale property, as each has different benefits.

Budgeting for additional costs

When preparing your budget for property investment in the London market, you'll need to calculate several other expenses, including legal fees, mortgage fees, stamp duty and property maintenance charges. In most cases, legal fees range from £1,800 to £4,000, while stamp duty can add up depending on the property's value and whether you're classified as a non-UK resident. Budgeting for furnishing costs is also wise, especially if you intend to let out the property or use it as a second home.

Viewing & shortlisting properties

If you have shortlisted a specific lot of properties, Benham & Reeves can arrange physical and virtual viewings — regardless of whether you are in London or abroad. If you plan to visit London in person, our agents can schedule guided tours around the properties you're interested in, ensuring you get a feel for the location and its amenities. Alternatively, if travel isn't possible, we also conduct virtual viewings via Zoom or WhatsApp.

Making an offer & reservation

Once you've identified the right property, Benham & Reeves will handle the offer process and walk you through the reservation, ensuring everything runs smoothly. Our agents will submit an offer to the seller or developer on your behalf and walk you through the reservation process. Remember that different payment structures apply depending on the type of property (existing or off-plan). Sometimes, you may need to pay the full amount upon signing the contract for existing properties, while off-plan projects often offer more flexible, staged payments aligned with construction milestones.

Instructing your solicitor

A London-based solicitor is essential for any property purchase in London. Our experienced agents can connect you with trusted solicitors and conveyancers who will handle your legal paperwork and ensure the transaction complies with all UK regulations. Once the offer is accepted, you must submit your documents, including proof of identity, address and funds, for the solicitor to prepare the contracts.

Exchange of contracts

The contract exchange usually takes place within 28 days of making an offer. At this point, you will need to put down a deposit, typically 10-20% of the property's value and the contract terms will become legally binding. Additional payments may be tied to the development's construction progress with off-plan property purchases.

Completion and stamp duty

After exchanging contracts, you cannot step out of the deal! You must make the final payment and officially take possession of your new property. Stamp Duty Land Tax (SDLT) must be paid within 14 days of completion and non-UK residents are subject to a 2% surcharge on top of the standard rates.

Benham & Reeves's one-stop service

To ensure a seamless property buying experience in London as an Indonesian investor, Benham & Reeves assists you with a comprehensive range of services tailored to your needs. Whether you're buying for personal use or investment, we cover every aspect — from property management and rent collection to furnishing and refurbishment through our sister company, InStyle Direct. Our teams in multiple offices across London and Indonesia are on hand to guide you through every stage of the process, ensuring professional support at home and abroad and giving you peace of mind.

Investing in London real estate is an exciting opportunity and it can also be gratifying with the proper guidance. Get in touch with Benham & Reeves today to take the next step in your investment journey!