A research advice is sent across on email with the broker’s choice of the best lender and finance structure, followed by a client call to discuss in detail. The advice given depends on whether the client is purchasing in their personal name or that of a UK limited company.

After this, the broker prepares a presentation paper for the approved terms of the loan. An agreement or a decision in principle follows this.

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The process next moves forward to the stage of formal lending underwriting, which requires a series of documents from the borrower.

What documents are typically required from those seeking mortgage loans?

A buyer must prepare four documents when applying for a mortgage loan in the UK, according to Brooks.

The first document is a copy of an official ID, such as a passport. A lawyer in the domicile country must certify the validity of the ID using the exact words “certified to be a true copy of the original seen by me”. The lawyer also must have a presence on the internet to help establish their identity.

The other necessary documents are a proof of address, which also must be certified by a lawyer from the applicant’s country; bank statements showing income; and property portfolio, if any, whether in the UK or elsewhere.

“UK finance is not dependent on property experience, but it does help,” Brooks said. “First-time buyers are also welcome, and we can gain funding.”

Lenders will require a review of bank statements showing the full transaction history of the deposit funds from the domicile country to the UK and the accumulation of those funds.

What are the available mortgage loans available to foreign buyers in the UK?

“Lending options are based on lending amounts, property, letting structure and location,” Brooks said.

There are various mortgage options for those seeking a loan under their own name or that of a limited company.

Loans can range between £150,000 (US$187,000) and £1 million, with a tenor of between two years and five years for fixed-rate loans. Interest rates currently range from 5 per cent to above 6 per cent.

Loan amounts can be as high as 75 per cent of the value of the asset, which could be a single letting, a block of flats, a serviced apartment or social housing, among others.

What other tips do applicants need?

Brooks advises working with a broker who specialises in working with foreign nationals to “understand the administration requirements in detail”.

Buyers need to be prepared to go through the underwriting process with the specified documents and ensure that they reflect the circumstances in the fact-find documents they completed, Brooks said.

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“Understand that the UK lending environment is very different to anywhere in the world, in that the applicant covers all costs of the process: application fees, valuation fees and lawyer fees, including the lenders’,” he added.

Buyers should also know that each property they purchase in the UK will not follow the same process. There are multiple different types of property and locations to purchase in the UK, and not all are viewed the same by the lenders, Brooks said.

It’s also crucial for buyers to consider their UK inheritance tax (IHT) position.

Clients should consider mitigating their potential IHT liability by taking out life insurance, which an independent broker can also advise on, said Toby Downes, London specialist at property agency Haringtons. For non-UK domiciled clients, there are lots of life insurance options available both onshore and offshore.

“IHT is payable at 40 per cent on the value of UK assets above £325,000 on the owner’s death,” Downes said. “Owning the property in a company or a trust no longer protects against IHT.”

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In addition, if the buyer pays cash and a mortgage is taken out afterwards, this is not deductible for IHT purposes, Downes said.

Other tips include opening a UK bank account as soon as possible, and starting the application process early.

“Buyers should speak to a mortgage broker early to assess their borrowing capacity and how much they are likely to borrow to set their budget when searching for a property to purchase,” said Eli McGeever, director of research and technology innovation at One Global Labs.

For potential buyers from Hong Kong, Mandy Wong, head of international residential at JLL in Asia-Pacific, said that although the mortgage loan application could be similar to what they do at home, the time span to approval could be longer in the UK.

“We always ask buyers to start the application six months in advance of the expected completion date of the property,” she said.