Buying guide for Qatari investors in London property

Planning your finances

Proper financial planning is essential for a successful property purchase in the UK. As a Qatari investor looking to buy property in London, you should

• Set a budget and determine whether to purchase the property outright or through financing
• Carefully choose between ready-to-move properties or off-plan projects that allow for staged payments
• Clarify the purpose of the purchase — whether for personal use or rental income, as this decision can impact mortgage terms

Buy-to-let mortgages typically require higher deposits and are structured differently from residential mortgages. If buying with cash, it's essential to provide evidence of the funds' source as per UK legal requirements.

Mortgage eligibility for Qatari investors

Qatari investors can take advantage of UK mortgage loans for property purchases, but eligibility depends on various factors such as loan-to-value (LTV) ratios and annual income. Lenders will assess your ability to repay the loan based on rental income or salary. Remember, making a larger deposit can speed up the mortgage process. Typically, developers accept deposits ranging from 10-15%, though offering a larger deposit reduces the lender's risk.

Note Working with a reputable UK mortgage broker can simplify the process and ensure you meet all requirements for securing a loan.

Necessary documents and paperwork

To initiate the property-buying process in the UK, you will need to prepare and submit the following documents

• Proof of identity
  A valid passport
• Proof of address
  Utility bills, bank statements or a driver's license issued within three to six months
• Proof of funds
  As per UK anti-money laundering laws, you must show proof of funds along with evidence of their source (e.g., bank statements, tax returns, business income records)
• Certification of documents
  All documents must be certified by a UK-based solicitor, accountant or authorised notary

Narrowing down your property search

Once the finances are in order, the next step is to find the right property per your budget and preference. London is filled with diverse real estate options — modern apartments in the heart of the city and family homes in more suburban areas. Consider the following steps to streamline this process

• Purpose of purchase
  Decide whether the property is for personal use or as an investment for rental income
• Location
  London has 32 boroughs, each with distinct characteristics. Popular areas include Knightsbridge, Mayfair and Chelsea for prime central locations and Canary Wharf for tech and finance professionals
• Property type and size
  Whether you're interested in a studio apartment, a larger family home or a high-yield rental property, consider the specific amenities and surroundings that match your goals

Understanding property ownership

In the UK, property ownership is divided into three main types. Understanding different ownership structures is crucial to making the right investment decision.

• Freehold
  Full ownership of the property and the land it is on
• Share of freehold
  Ownership shared among several parties, usually in apartment buildings
• Leasehold
  Ownership for a set period, typically 99 or 125 years, with the freeholder owning the land

Calculating your budget

In addition to the buying price, Qatari property investors in the UK should account for different additional costs, such as

• Legal fees
  Generally between £1,800 to £4,000, these fees cover solicitors for conveyancing
• Stamp Duty Land Tax (SDLT)
  Non-UK residents are subject to SDLT, with rates that vary based on property value
• Mortgage fees
  If you are securing a mortgage, this includes processing and valuation fees
• Maintenance charges
  Applicable for leasehold properties, covering service and ground rent fees
• Miscellaneous costs
  Set aside approximately £500 to £700 for insurance, legal paperwork and other administrative expenses

Viewing and shortlisting properties

As an overseas property investor, viewings- in person or virtually- are essential once you have a shortlist of potential properties. At Benham & Reeves, we offer our domestic and foreign clientele with

• Physical viewings
  In-person property tours with tailored itineraries for your selected properties
• Virtual viewings
  Conducted via Zoom or WhatsApp, offering detailed insights into the property through photos, videos and floor plans

These tours are carried out to ensure that you completely understand the property before committing.

Making an offer and reserving the property

Once you finalise a property, submitting an offer is essential. This process differs depending on the type of property

• Ready properties
  For completed properties, you may need to pay the total amount after submitting your offer
• Off-plan properties
  A small upfront deposit reserves the property, with further payments tied to construction milestones

Backed with over six decades of experience, the Benham & Reeves offices' agents in Qatar and London can guide you through the negotiation and reservation processes.

Engaging a solicitor

In the UK, property transactions require a solicitor or conveyancer. We work closely with some of the best solicitors in London to ensure a smooth buying process. Your solicitor handles

• Legal documentation, including proof of identity and funds
• Contract reviewing and managing all conveyancing requirements

Exchanging contracts

Once the seller accepts your offer, contracts will be exchanged within 28 days of the property reservation. At this point, the property transaction becomes legally binding and the buyer must pay a deposit (usually 10-20% of the purchase price). Note: For off-plan properties, payments are staged based on construction milestones.

Snagging

Before completing the purchase, we recommend all our clients inspect the property thoroughly for any defects. This process is called snagging and ensures issues are addressed before final ownership. The developer will typically guide the buyer through the property and demonstrate its amenities and features, such as appliances and utilities.

Completion of purchase

At this stage, the remaining purchase price balance is paid upon completion and ownership is transferred. Your solicitor will handle the funds transfer and once complete, you officially own the property. Congratulations on finding your real estate investment in London!

Stamp Duty payment

You must pay HMRC (HM Revenue & Customs) the Stamp Duty Land Tax (SDLT) within two weeks of completing the purchase. Non-UK residents are subject to an additional 2% surcharge, but exemptions apply if certain residency requirements are met.

Ongoing services

At Benham & Reeves, we offer a range of post-purchase services to support Qatari investors

• Through our sister company, InStyle Direct, we provide interior design and refurbishment services
• We assist clients with tenant search, rent collection and property management
• We pay service charges, ground rent and utility bills on your behalf, ensuring that these essential expenses are managed without any hassle
• We help non-resident investors with tax returns to ensure compliance with UK regulations

With offices in London and Qatar, we offer seamless support, bridging any gaps you might experience as an international buyer.