properties in UK

How to buy an investment property in the UK

Your questions about investing in the UK answered by the experts.

Investment properties can be one way to increase your wealth and this isn't restricted solely to Australian properties. The global economy has made it possible for Australians to invest in other countries and net strong returns, but these kinds of investments might not be for those who aren't willing to put in the extra time required. There are many additional requirements you need to think about when investing in overseas property.

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What you should know before starting

Buying an investment property in Australia has a number of challenges. You will need to have very good knowledge of the market you're investing in and need to have a clear plan outlining what you want to achieve with the property. You will also need to sort out your finances. Then there are the different taxes you'll pay, such as capital gains tax, as well as the extra time you'll need to put into both the property itself and its management.

Investing overseas magnifies some of these challenges
  • You don't know the market. If you haven't lived in the country where you plan to invest, you'll have to carry out thorough research on the location. Many experts strongly recommend you visit the location where you intend to buy to ensure the area is one you like and, more importantly, so you can research the claims of the person selling the property. Also remember you won't be able to regularly visit your investment if it's overseas.
  • Finance is harder to obtain in a foreign country. Obtaining finance in some nations is more difficult for foreigners and may have several extra requirements you'll need to fulfil.
  • Managing your property can be more difficult. There's also the issue of having to manage the property from Australia. The distance might make it more difficult to find a good property manager and tenants.
  • Exchange rates play a part in returns. There's an extra risk related to exchange rates when investing in a foreign country. If the Australian currency continues to rise, then your investment might lose value.
  • The applicable tax structures. Considering these points, it's never a bad idea to enlist a team of professionals, such as buyer's agents, tax specialists and financial planners to help you along the way.
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Why invest in a UK property?

The main question you might have as an Australian investor is why you should invest overseas instead of investing back home? This is an important question, especially when there are many spruikers who are trying to encourage Australians to invest in properties abroad. Many people believe investing in the UK can be beneficial for the following reasons:

buying a uk property

  • It has a developed property market. The UK is a broad market with many different property options.
  • UK property values have fallen dramatically. This has happened steadily over the last five years. In fact, the Halifax Bank released a report in the middle of last year stating the average home in Britain had fallen by £40,000 over the last five years.
  • The Australian dollar is strong. While this means it's harder for those exporting out of Australia, it's cheaper for Australians buying in overseas markets.
  • The British pound is weak. The British pound has taken a nosedive over the last ten years. Ten years ago, AUD$1 bought 40 pence, whereas now it's recently been as high as 69 pence. This means it can be cheaper for Australians to buy investment properties.
  • Your investments are diversified. Having a diverse pool of different assets in different markets and classes protects you in the event one market collapses. Having a property in the UK is separate from the Australian market, so if one collapses the other won't necessarily follow.
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How to find the right property

Finding the right investment property in the UK is much like finding the right property anywhere in Australia or around the globe. This section will give you some tips on how to find the right investment property in the UK.

1. Inspect the property

Once you have identified a property that you're interested in purchasing, travel to the UK and inspect it. Photos can be misleading and can make rooms appear larger than what they are. In addition, you can never be sure of the area the property's in until you visit it yourself. Failing to look into all avenues might result in you purchasing a property which isn't attractive to renters and may affect the return that you receive.

2. Look into demographics

To find the right property to invest in, you must first look at the demographics of the area. Choose areas with high property ownership where the people are mostly working professionals.

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What else do I need to consider when investing in the UK?

Pulling off a successful investment strategy in the UK will rely on a number of predictions. Namely that the Australian dollar will eventually become weaker once again, the British pound will lift in value and UK property values will increase.

If you have no idea whether this will occur, then it's crucial that you conduct thorough research of trusted sources and consult the right professionals before buying an investment property in the UK.

Read on below to learn from investment expert Chris Gray

Chris Gray

Chris Gray

  • Chris Gray is a leading investment property expert.
  • He hosts Your Property Empire on Sky News Business Channel.
  • He is the CEO of Empire, an independent consultancy for investors who want to build their property portfolio.

Is there a high return from investing in UK properties?

I think there's a potential to get a high return from property pretty much anywhere in the world. It's really a case of understanding the market, having the right contacts, doing the analysis and then being able to understand the cash flow in the properties for the medium to long term. I bought half my current property portfolio in the global financial crisis (GFC) in Australia, and in one case made $1,000,000 profit in four months on a block of units purchased for $1,900,000. I bought two properties in the UK for GBP£80,000 in 1993 and 1994 and they've both just been re-valued at GBP£325,000,000. So even though the UK has supposedly had some major issues, both these properties have doubled every 10 years and have been positive in cash flow from day one.

How can someone find the right property in the UK?

You've really got to be on the ground to understand the market and see what's happening at open homes and auctions. Whilst it can be done over the phone and Internet, personally I wouldn't do it. You really need to find a professional buyer's agent that does it all day, every day and specialises in one or two areas. They have an unemotional view on the market and as they're inside the industry, they often have access to deals that the public doesn't get to see. Even when I buy interstate in Melbourne for clients, I use buyer's agents. I might have the investment knowledge, but I need local agent contacts that can help me to get deals over the line.

I think there's a potential to get a high return from property pretty much anywhere in the world. It's really a case of understanding the market, having the right contacts, doing the analysis and then being able to understand the cash flow in the properties for the medium to long term.
Chris Gray

Who is best suited for investing in property overseas?

Those that want to diversify their portfolio geographically so that they're not all concentrated on one market. In reality, most overseas investors are often the people that are trying to become overnight millionaires and think that just because it's exotic, it's going to create more profit. Having lived in the UK, Australia was exotic. Now I live in Australia, everyone thinks Europe is exotic! There's plenty of profit to be made in Australian property right now, so why risk exchange rates, not knowing what you're doing and probably only being able to borrow 50% over there when you can have much more knowledge and leverage over here. Investing overseas is for the experts or the foolhardy!

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How to finance your property overseas

Financing your investment property across borders doesn't have to be difficult if you have the right advice. The same rules apply wherever you are around the globe. With any sound investment strategy, you'll need an A-team of professionals helping you along the way.

Similar to when you're buying a place in Australia, you can use the expertise of a local buyer's agent to help you find the right property and a mortgage broker to help you find the right home loan.

Getting a loan

Unfortunately, Australian lenders will not allow you to use a home loan in Australia to purchase a property overseas. This is because Australian home loans require Australian property as security, otherwise a lender cannot legally recoup their losses in the event that you default.

The exception to this is a line of credit loan, which allows you to borrow using the equity in your home loan in Australia to use for whatever reason you see fit.

This means that for many thinking about buying a property in the UK, a loan from a UK-based lender might be the only option.

Currency considerations

With overseas investments, you'll need someone with macroeconomic knowledge. After all, you'll now be dealing with two currencies instead of only one. This is when a currency provider can be a great addition to your team.

"Dedicated account managers can inform clients about forthcoming market data which can affect the currency rate prior to any transactions to ensure they maximise their return," says Ian Cragg, Business Development Manager of TorFX.

Economic market data has a huge impact. Countries that have been heavily affected by the GFC, such as the US and some countries in the Eurozone, have seen property values drop by over 50% in recent years.

It's important to consider the services of a good currency provider because you are dealing with large sums of money where exchange rates do make a difference. The amount you could potentially save from exchange rates could fund your next renovation or investment. And according to Mr. Cragg, currency providers can help you determine the best time to exchange your money depending on your financial situation.

"Every client scenario is different from the next. We have clients approach us up to a year before they need to complete a transfer and are looking at options such as forward contracts to secure the rate there and then if it is good. Alternatively, we have some who leave it until the last minute and need to transfer their funds on the same day," he adds.

No matter what your foreign exchange needs are, be mindful that a good currency provider will always keep your interests as a priority and give you important guidance along the way. You can compare international money transfer providers with our comparison table.

Buying an investment property in the UK can potentially generate you good returns, but it is not an armchair investment. In addition to your financial investment, you will need to invest a lot of your time. Be sure you're up to the task before making any moves.

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Compare mortgages for property investment

Rates last updated August 17th, 2019
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
$0 p.a.
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
$0 p.a.
A competitive variable mortgage for investors looking to refinance. Principal and interest repayments. Refinancers only.
$10 monthly ($120 p.a.)
Investors can get a low variable rate loan that's available with a 10% deposit. 100% offset account attached.
$6 monthly ($72 p.a.)
NSW and ACT customers only. A 3 years fixed rate investor which allows extra repayments to be made.
$0 p.a.
A low interest only variable mortgage for investors who wish to refinance to a lower rate. Refinancers only.
$0 p.a.
A flexible variable rate mortgage for investors. Available with a 10% deposit.
$0 p.a.
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
$500 (if over 80% LVR)
$0 p.a.
A variable investment mortgage with flexible repayments and an optional redraw facility.
$0 p.a.
Investors can borrow up to 90% with this variable mortgage and get an offset account.
$10 monthly ($120 p.a.)
This is a competitive, flexible variable rate suitable for borrowers with a good credit history. Borrow up to 80%.
$0 p.a.
Variable investment loan with low fees and an offset account. Face-to-face consultations available for NSW and ACT customers.
$10 monthly ($120 p.a.)
A competitive rate offered to self-employed borrowers.
$0 p.a.
Pay no ongoing fees on this investment loan fixed for 3 years.

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17 Responses

  1. Default Gravatar
    chrisNovember 18, 2017

    I not lived in UK for 20 years but I wash to come back to live and buy a house can you tell me how I would do it pleas as I’m not sure I was born in uk

    • Avatarfinder Customer Care
      JoanneNovember 18, 2017Staff

      Hi Chris,

      There are certain matters that require your attention before you move overseas permanently. This page will also outline for you several tips you can take while relocating overseas.

      For investing on properties abroad, you may also see this page as it will give you additional information. A loan from a UK-based lender might be the only option for buying a property in the UK. You may also want to seek advise from an expert or mortgage broker to get additional information on how you can go about in purchasing a home in the UK.


  2. Default Gravatar
    NicholasMarch 21, 2016

    Hey there, great article!

    I’ve been told by some UK Real Estate professionals that it is possible to get asset-based lending (meaning they look at the property’s financials rather than your own), if you have set up a Limited Company in the UK (which Australians are allowed to do).

    They’ve also mentioned that you have to physically go into the UK and prove your identity with passport etc – does anyone know to whom I might report to with this information? I’m planning my trip over there now as we speak.

    • Avatarfinder Customer Care
      BelindaMarch 29, 2016Staff

      Hi Nicholas,

      Thanks for reaching out.

      While investing in an overseas market can be beneficial if you find a property with capital growth potential and if you surround yourself with the right experts, keep in mind that it can be a risky strategy. In particular, a lack of local knowledge, additional costs (e.g. extra administrative costs and exchange rate risk) and finance restrictions for foreigners can be problematic.

      However, you might be interested to read our guide about the benefits and risks of investing in overseas property on this page.

      Your best course of action would be to speak to a local buyer’s agent, a tax accountant and a lending specialist in the UK. They will be able to help you understand your options in terms of asset-based lending. Generally, you’ll need to set up a bank account in the UK and to verify your ID, you’ll need to do this in person.

      All the best,

    • Default Gravatar
      NicholasMarch 29, 2016

      Thanks Belinda! Very helpful, thank you!

  3. Default Gravatar
    GordonMarch 21, 2016

    Hi Marc,

    I am from Glasgow in Scotland but I have been living in Sydney Australia for over 5 years now. My partner and I would like to buy an apartment back in Glasgow as an investment property. Basically it’s a way for us to secure our futures while we have the expendable income. House prices here in Sydney are ridiculously high so rather than rent here and waste our expendable income we plan to buy overseas instead. I have all my family back in Glasgow and we visit once per year so I know the area and the market quite well. I was just wondering if there is any advice you could give me on how to start the process. Australian Banks will not lend for overseas property and I am not too sure if its worth my time contacting Scottish banks until I have enough of a deposit saved ? What would be a good deposit to save 10%, 20% or 30% of the property value ? Will lenders expect a larger deposit amount because we don’t actually live in the UK. Any help would be great.

    • Avatarfinder Customer Care
      BelindaMarch 22, 2016Staff

      Hi Gordon,

      Thanks for reaching out.

      Please note that investing in overseas property can be risky so it’s worth doing extensive research into the local property market and trends (e.g. price growth trends, capital growth potential, and local interest rates). However, if you have friends and family in Glasgow who can help give you insight into different properties and locations, this will be helpful.

      Typically, banks impose stricter lending criteria for foreign investors (or those investing from overseas) so you may need to come up with at least a 20-30% deposit (but this will depend on the individual policy of the bank that is providing finance).

      It’s worth looking into the tax implications of receiving rental income from an investment property both here and in Scotland. As an Australian resident, you are taxed on your worldwide income, including income from offshore bank accounts, rental income from an overseas property and capital gains on overseas assets. You should visit the Australian Taxation Office (ATO) and the UK government website to understand your tax responsibilities.

      You’ll need to get in touch with a local buyer’s agent in Scotland as they’ll be able to facilitate the purchase process for you. I would also recommend speaking to an accountant and a mortgage adviser in Scotland to ensure that you make a sound investment decision.

      Keep in mind that you’ll most likely need to set up a Scottish bank account and a global money transfer account (if you haven’t already). Transferring funds to and from Scotland will add costs so it’s worth finding a company with minimal fees and a favourable rate.

      We have an article that explains the costs and process of investing in US property (while not applicable to Scotland, it may give you some insight about how to begin the process).

      All the best,

  4. Default Gravatar
    SarahFebruary 7, 2016

    If I wanted to purchase another property in the UK from Australia but I want to get a mortgage on the property how would that work from Australia? Would I have to get the loan here in Australia for it, is that possible ? What would be the tax implications on a mortgaged property? I currently don’t do tax returns as I’m an exempt landlord on a property I own outright which I would sell before I get this other property I’d rather not be doing UK tax returns as I declare everything here in oz. Thanks.

    • Avatarfinder Customer Care
      MarcFebruary 8, 2016Staff

      Hi Sarah,
      thanks for the question.

      Unfortunately most Australian lenders will not lend for an overseas property purchase. This is because they will want to secure it to a property in Australia which they can sell if they need to in the event of a borrower default.

      You can read more about the financing issues for property overseas in our guide here.

      Note that any income made from overseas property must be included on your tax return in Australia each year.

      I hope this helps,

  5. Default Gravatar
    JanineSeptember 14, 2015

    Is it legal for an Australian to purchase a UK property with cash (no loan required)?

    • Avatarfinder Customer Care
      MarcSeptember 15, 2015Staff

      Hi Janine,
      thanks for the question.

      It is legal to purchase a UK property if you’re an Australian buying with cash. You might also want to contact a property buying firm to help you with the purchase, and it’s always recommended you thoroughly research the city before investing in it.

      I hope this helps,

  6. Default Gravatar
    GraceJune 26, 2015

    Can you suggest broker to contact to remortgage property in Uk for Australian citizen living in australia

    • Avatarfinder Customer Care
      BelindaJune 29, 2015Staff

      Hi Grace,

      Thanks for your enquiry.

      Please note that is an Australian online comparison service so we cannot recommend any brokers that specialist in UK properties.

      Your best course of action would be to source a local UK broker to discuss your financing needs.

      Kind regards,

  7. Default Gravatar
    dianeMarch 3, 2015

    Ive recently been made aware that its best to buy investment properties via a discretionary trust in Australia.
    please can you tell me the best way to purchase in the uk ?
    e.g. n your own name , trust, company

    • Avatarfinder Customer Care
      ShirleyMarch 3, 2015Staff

      Hi Diane,

      Thanks for your question.

      Please note that is an online comparison and general information service and is not in a position to give investment advice. This enquiry is best directed at your accountant based in the UK if you would like to know more about tax implications.

      There are a number of interesting articles available online, I’ve emailed these to you.


  8. Default Gravatar
    VikkiOctober 27, 2013

    I’ve been looking at properties in Deighton, Huddlesfield, Yorkshire firstly out of interest and I noticed they are reasonably priced.

    How would I go about getting a loan to purchase a cheap investment property in UK?

    There was one I saw on the internet for GBP 59,000 and could be rented for GBP 91 pw.

    Thanks for your help.

    • Avatarfinder Customer Care
      ShirleyOctober 28, 2013Staff

      Hi Vikki,

      Thanks for your comment.

      If you currently live in the UK, it may be worthwhile to see a mortgage broker who is local in the Deighton, Huddlesfield area to help you find a suitable home loan.

      At the moment features loans within Australia.

      Hope this helps,

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