London property buying guide for USA investors

Can American investors buy property in the UK?

Yes, there are no restrictions on foreign ownership in the UK. Buying a property in London stands as a popular and safe investment decision for many savvy American investors seeking long-term growth, global asset diversification or a second home in one of the world's most stable property markets.

As the dollar strengthens against the British Pound, the UK remains a preferred destination for US nationals.

Arranging your finances

Before beginning your property search in London, it’s ideal to assess your financial capacity. American investors can typically take advantage of strong USD-GBP exchange rates, gaining better value for money in London compared to coastal US regions like New York or San Francisco.

To ensure this process is executed smoothly, it’s ideal to connect with both the UK and USA tax advisors to understand the implications of overseas property ownership and the impact of the IRS’s worldwide income reporting requirements.

Mortgage eligibility

An American buyer can take advantage of the UK’s buy-to-let mortgage schemes through an international or specialist UK lender. A mortgage broker who is well-versed in non-resident lending can guide the investors best through the different options.

Most lenders often require non-UK investors to put down a minimum deposit of 25%–30%, attached with proof of overseas income and a stable credit history. In most cases, mortgage rates will vary slightly from those available to UK nationals.

Documentation

To ensure a smooth property buying process in London, here is the list of documents you will need to prepare as an American buyer:

• A valid US passport
• Proof of address, along with a utility bill and bank statement
• Proof of income attached with W-2, tax returns or employment verification
• Bank statement, ideally of the past three to six months
• Credit report from a US credit bureau
• You may also need to submit a certified copy of these documents to solicitors and lenders

Narrow down your search

The United Kingdom offers a vast and varied property market – ensure you shortlist certain postcodes, areas and zones before beginning your property search. For instance, popular high-end investment areas among American property investors include Central London hotspots, such as Kensington, Marylebone and Mayfair. Well-connected areas like Canary Wharf, Battersea and Clapham are ideal for promising rental yield potential.

You can also factor in proximity to American schools, well-regarded universities, green spaces or business districts, depending on your investment goal.

Know your budget

A budget should be pre-decided and it’s crucial to include currency conversions, legal fees, Stamp Duty charges, mortgage arrangement fees, valuation fees and potential furnishing or renovation costs within it. It’s best to open a UK bank account or use a trusted currency exchange platform to manage international transfers effectively.

Viewing & shortlisting properties

Once budget and location are locked, Benham & Reeves agents can arrange virtual or in-person viewings for you. We also offer walk-throughs and 360° virtual tours for discerning clients unable to travel immediately.

Thanks to our six decades of experience in the London property landscape, we can help choose the options for those seeking capital growth, a consistent rental yield or lifestyle value.

Making an offer & reservation

Once you find a suitable property option in London, we will help you make a formal offer. If accepted, you will need to pay a reservation fee, usually £2,000–£5,000 to secure the property. For new build units, this fee will be deducted from the final purchase price.

Instructing your solicitor

This is one of the most important steps of the property-buying process in London. As an American buyer, you will need a UK solicitor or conveyancer to handle the legal aspects. In case you don’t have one, we can recommend independent solicitors experienced in representing overseas investors, especially US clients.

This solicitor will handle property searches, review contracts and liaise with the seller’s legal team on your behalf.

Acceptance of the offer

Once your offer is accepted and documentation is confirmed, the seller’s solicitor issues the draft contract. Your solicitor will review the paperwork, raise pre-contract enquiries and ensure all conditions are met before proceeding.

Conveyancing

Conveyancing is a process where the solicitor checks title deeds, conducts local authority searches and finalises mortgage details. This process usually takes six to twelve weeks.

As an overseas buyer, you will be asked to transfer funds to a UK client account to ensure compliance with anti-money laundering regulations.

Exchanging contracts

This step in the property buying process is when both parties are legally bound. At this stage, you are required to pay a 10% deposit, which can be a higher percentage for off-plan purchases.

At this step, the completion date is fixed. If you decide to withdraw from the purchase, you may lose the deposit amount, unless we reach an agreement otherwise.

Snagging (Inspection) of the properties

We recommend a snagging survey or inspection for new build properties before completion. This process helps identify any minor defects. For secondhand properties, a full structural survey is ideal.

Regardless of your location, the Benham & Reeves team can arrange either service on your behalf.

Completion of purchase

Congratulations on successfully acquiring your property in the UK!

On completion day, the pending funds are transferred to the seller and you legally become the property owner. The keys are handed over to you and the property is registered with the UK Land Registry.

Our experienced team of agents in London and over 14 countries can assist you with post-purchase services, including furnishing, tenant sourcing and property management.

Stamp Duty

All property purchases in England are subject to the Stamp Duty Land Tax (SDLT). A 2% surcharge, in addition to standard rates, is mandatory for non-resident buyers, including American citizens without UK residency.

You do not need to worry about the technicalities of this process, as we will guide you through the applicable bands and estimate the liabilities upfront. You must pay the SDLT within 14 days of completion of the transaction.

One-stop service

Benham & Reeves offers comprehensive services for US clients. We can help with property searches, legal introductions, mortgage support, furnishing solutions and long-term lettings.

With multiple branches in London and 14 international desks, we are equipped to support American time zones and ensure your investment journey is seamless and transparent.

Get in touch with us today and speak with our experts to begin your London property journey with confidence.