First-time London property buying guide

We understand the importance of getting it right when buying a new property in a foreign country and the concerns of a first-time London property buyer from India. Our step-by-step guide will make this process easy with valuable information and advice for a smooth and successful property-buying journey in the UK capital.

Step 1 Arranging your finances

To kick off your home-buying journey on the right foot, it’s a good idea to sort out your finances before looking at properties in London. This could involve finding a suitable lender and securing a mortgage agreement in principle, or simply making sure you have your funds ready for a purchase. Knowing your financial situation early on will help you set a realistic budget and guide your property search.

As an Indian resident, you might need to follow the remittance rules of the Reserve Bank of India (RBI). The Liberalised Remittance Scheme (LRS) allows residents, including minors, to send up to $250,000 per person per financial year (April to March) for approved transactions, including buying property abroad. You can combine the LRS limits of up to four people, allowing a joint purchase with a total remittance of $1 million per financial year.

Step 2 Checking mortgage eligibility

The Foreign Exchange Management Act (FEMA) restricts Indian residents from borrowing against property abroad without permission from the Reserve Bank of India. However, there are exceptions to this rule. Indian citizens or foreign nationals residing in India who own property abroad may be exempt, as well as residents who acquired property before 8th July 1947 or those buying a leasehold property for five years or less.

Non-resident Indians (NRIs) can purchase and hold property overseas under Section 6(4) of FEMA. Residents of India may also have, transfer, or invest in overseas property if they were NRIs at the time of purchase or inherited the property from someone living abroad.

Step 3 Arranging documents

If you’re an Indian investor buying property in the UK, you’ll need a few key documents with the names of all buyers

Proof of Identity A valid passport (a UK visa is not required).
Proof of Address Recent utility bills, driver’s licence, bank statement, tenancy agreement, or similar (dated within the last three months).
Proof of Funds Bank statements from the past 3–6 months showing where the money will be coming from.
Source of Funds Documentation showing how the funds were obtained, such as salary, business income, property sale, gifts, or inheritance.
Form A2 (Annexure 1) A declaration of remittance, along with any forms needed by your local bank in India.

All these documents need to be certified by a practising professional, such as a licensed conveyancer, solicitor, chartered accountant, lawyer, or notary.

Step 4 Finding the Right Property

With 21 branches across London, our team of experts in Delhi and Mumbai can help you find the perfect London property. To get started, you only need to provide a few details, including

Purpose Are you buying for personal use or as an investment?
Size How many bedrooms and bathrooms do you need? (For investment, one- and two-bedroom flats are easier to rent out and tend to offer better rental yields.)
Location London has 32 different boroughs, so it’s important to decide which area you want to buy in. This could be central London or one of the outer areas.
Type of Property Do you want an older property, a newly completed one, or something off-plan that’s still being built?

Many properties in London are leasehold, which means you don’t own the land, but you do own the property itself. Leasehold properties often come with shared responsibilities, such as maintaining the building’s roof and common areas. Lease terms can vary, but many new developments offer leases lasting between 125 and 999 years.

Step 5 Understanding the extra costs

Once you’ve set your budget and are ready to remit funds from your Indian bank account (under the LRS), it’s important to consider the additional costs involved in buying a property in the UK. Here’s a breakdown with approximate values

Purchase Price The agreed price after any discounts.
Legal Fees Around £1,800 to £4,000 (approx.), depending on the property’s size and value. All property documents must be prepared by a UK solicitor.
Property Maintenance Fees These include annual service charges (est. £3–6 per sq ft) and ground rent (est. £200–600), paid to the developer. For the first year, these must be paid upfront along with the property purchase price.
Stamp Duty Land Tax (SDLT) For non-UK residents, SDLT rates range from 6.67% on properties valued at £300,000 (£20,000) to 8.57% on properties worth £700,000 (£60,000) or more. Use our stamp duty calculator to calculate the applicable SDLT.
Miscellaneous Costs Around £500 to £700 (approx.) for transaction fees, insurance, search fees, etc.
Mortgage Lender’s Fees Approximately 1% of the loan amount if you need a mortgage.
Furnishings (Optional) We also offer a full range of furnishing services through our in-house company, InStyle Direct.

Step 6 Viewing and shortlisting properties

While online photos can give you an idea, seeing a property in person is the best way to get a proper feel of your future asset. Once you've shortlisted your choices, our team can arrange special viewings.

In-person viewings With 21 local branches across London and a team of over 200 experts, we can organise guided tours of properties. Once we know your travel dates to London, we can plan an itinerary to show you the shortlisted options. These viewings will help you get a better feel for the properties, the amenities, and the surrounding neighbourhoods.
Virtual viewings If you cannot visit in person, we can arrange personalised virtual viewings via Zoom or WhatsApp. During these virtual tours, we'll show you the properties, including photos, videos, floor plans, and even views from different apartments so that you can make an informed decision remotely.

Step 7 Making an offer and reserving the property

Once you’ve found the property you want to buy, we’ll help you present an offer to the developer or seller.

A few things to consider before making an offer

For resale or completed properties, full payment is usually required when the offer is made and contracts are exchanged.
For under-construction or off-plan properties, you need to pay a reservation fee (sometimes called token money) to secure the property. You’ll then have 28 days to exchange contracts and pay 10% of the purchase price.

Step 8 Working with a UK solicitor

All property transactions in the UK must go through a solicitor. We can recommend independent solicitors or conveyancers experienced in handling such purchases. Once you’ve reserved your property, your solicitor will prepare all the legal documents and ensure your interests are protected throughout the purchase process.

The documents your solicitor will need include

Proof of Identity A valid passport (a UK visa is not required).
Proof of Address Utility bill, driver’s licence, or a bank statement dated within the last three months.
Proof of Funds Bank statements from the last 3–6 months showing where the money for the purchase will come from.
Source of Funds Supporting documents showing how the money was earned, such as salary, business income, gifts, property sales, or inheritance.
Form A2 (Annexure 1) A declaration of remittances or the purpose of the funds, along with forms required by your local bank in India.

Step 9 Offer Acceptance

Once your offer is accepted by the seller, you’ll need to pay the reservation fee and sign the reservation form. After this, your solicitor will prepare the documents for exchanging contracts.

Exchange of contracts This usually takes place within 28 days of the reservation or as agreed at the time of reservation. As the buyer, you need to ensure that the deposit is ready and available for the exchange.
Completion If it’s a completed property or the completion date is set for an under-construction property, you’ll need to ensure that you have the full purchase amount ready, minus the deposit already paid.

Step 10 Conveyancing

Conveyancing is the legal process of transferring property ownership in the UK. It involves the following steps

The seller’s solicitor provides your solicitor with a copy of the Title Deed and legal terms.
Your solicitor handles all the necessary documentation, ensuring everything is in order, and raising any questions or concerns on your behalf.
Your solicitor may also request local searches and details about any fixtures, fittings, or facilities included with the property.

Step 11 Exchange of contracts

Up until this point, neither the buyer nor the seller has been legally committed to the transaction. However, once contracts are exchanged, both parties are legally bound to the agreed terms and conditions. This typically happens within 28 days of reserving the property. At the exchange, the buyer must pay a deposit, usually between 10% and 20% of the purchase price. For off-plan or under-construction properties, payments are made in stages according to the agreed timeline.

Step 12 Snagging and property inspection

For off-plan properties, where you're the first owner, it’s important to have the property inspected before you take possession. This process, called snagging, involves checking for any unfinished or faulty work. A snag list is created during this inspection, which outlines any issues, from cosmetic defects like paint splatters to more serious problems like leaks or misaligned doors. During the inspection, the developer will also demonstrate how the property’s features work, such as heating, water systems, and electrical installations. Any issues can be flagged and fixed before you move in.

Step 13 Purchase completion

Completion occurs when you pay the remaining balance of the property price. The formula is simple Total Purchase Price – Deposit already paid = Balance payment

Your solicitor will then transfer this balance to the seller’s solicitor. Congratulations, you now legally own a property in the UK!

Step 14 Stamp Duty payment

After completing the purchase, you must pay stamp duty, which is a percentage of the property's value, within 14 days of exchanging contracts. Your solicitor will calculate the amount and prepare the stamp duty land tax return for you.

Use our Stamp Duty Calculator to help estimate the cost.

Step 15 One-stop service by Benham & Reeves India

Furnishing & refurbishment Instyle Direct, a sister company of Benham & Reeves, offers full furnishing and interior design services. Whether you need low-cost designs to attract tenants or a complete makeover for personal use, we have you covered. Instyle Direct also handles refurbishments, from repainting to full renovations like updating kitchens or bathrooms.
Lettings We find high-quality tenants willing to pay the best rent. With 19 offices across London, we cover all key areas that investors focus on for buying and letting properties.
Management We take care of everything, from collecting rent and paying it into your account to handling maintenance and ensuring tenants keep the property in good condition.
Bill payments We can manage all your bills, including service charges, ground rent, and utility payments, so you don’t have to worry about them.
Tax return service We help our Indian clients prepare and file their personal tax returns for rental income generated in the UK.