Buying London - A Guide for American Expats and Property Investors in London

Whilst it hasn’t always been the case, the US and the UK have a ‘special relationship’ as coined by Churchill, cooperating on defence, economics, science, and a wide variety of other issues. Since fighting together during the World Wars, they’ve been close military allies, and NATO partners, and share many historical, political and cultural ties.

According to the last census there are around 200,000 American born residents in the UK, and undoubtedly many thousands more with second homes or who visit frequently for work. The United Kingdom is one of the top destinations for American expats. The ‘special relationship’ is also a term that could be applied directly to America’s love affair with London, given it offers US citizens superb opportunities for work, travel, and study, given its central European location. There are many notable US companies with offices in London, including American Express, Goldman Sachs, Expedia and Uber, meaning plenty of opportunities for travel or relocation for those fortunate enough to work there. Whilst Google’s huge new London HQ (longer than the Shard is tall, known colloquially as Platform G, will no doubt further cement its standing. And of course, there’s no major language barriers to contend with. Even though, as George Bernard Shaw noted, ‘ the UK and America are also two countries separated by a common language’.

It’s little wonder that many American celebrities call London their home. Kevin Spacey moved from New York to London in 2003, to become Artistic Director at the Old Vic. Massachusetts born TV Chef and presenter Lloyd Grossman, settled after studying at the London School of Economics. The American Director Tim Burton and his wife, renowned British actress Helena Bonham Carter, live in adjoining houses in Belsize Park. Brad Pitt and Angelina Jolie famously owned a home in Richmond before their split. And there are many others.

For US families, and those with an affinity with the US educations system there are several notable American Schools and Universities in London, including ASL (The American School in London) in leafy St Johns Wood, TASIS The American School in England, Richmond American University, ACS Egham, ACS Hillingdon and ACS Cobham. Whilst many more welcome American students with open arms.

London is now home to six restaurants with the coveted three-star Michelin rating (one more than New York City), as well as several more one and two-star restaurants, and as far as nightlife goes, it offers a wide range of options including theatre, art, live music and stand-up comedy.  As well as its own calendar of prestigious sporting events such as Royal Ascot and Wimbledon, plus the NFL, MLB and the NBA now all hold regular ‘sell-out’ season games in London arenas; the new Tottenham Hotspur stadium has even been built with a retractive pitch for this reason.

 

Top property spots for American expats

 

Incredibly, according to Forbes, there are 735 billionaires in the US and almost 22 million dollar millionaires. So, if you’ve got some serious money to invest, there’s plenty of desirable super-prime property available in London. It’s worth doing your research however, to understand current market trends, average property prices in your chosen area, and potential for future growth and return on investment. A good property agent can help. Of course, if you’re planning on staying at the property regularly or making a more permanent move, it’s not just about return on investment. It’s also important to consider factors such as proximity to work and schools, transportation links, and cultural and social aspects, before deciding which area to buy in.

The areas surrounding Hyde Park include some of the capital’s most exclusive neighbourhoods, offering a mixture of modern apartment complexes and large Edwardian, Georgian and Victorian houses, with excellent transport links and tree-lined streets. These areas include Knightsbridge, with an average property price of £3.2m, closely followed by Mayfair at £3.1m, Marylebone at around £1.7m and West Brompton at just under £1.1m. Although the American Embassy has now moved to a new location south of the Thames.

St John’s Wood & Maida Vale are considered ‘expat’ neighbourhoods, close to the American School in London and Southbank International School, indeed the American Ambassadors official residence is located nearby next to Regents Park.  Or you may wish to look closer to the financial district of Canary Wharf, home of several global banks such as Barclays, Citigroup and JP Morgan. Many city professionals choose to live near their offices here, with close proximity to world-class restaurants, bars, and entertainment venues.

 

 

How does the buying process differ in the UK?

 

If you’re an American buying in London, you might get a shock when you find out how long the process takes. In the US, sale agreements are typically locked in within 7-10 days, with closing around 45 days from offer acceptance. The process in the UK can take 3-6 months (or more!) and the sale doesn’t become legally binding until near the end of the process.

In the US, real estate agents are much more heavily involved in the buying process. Title companies ensure property titles are legitimate, and escrow accounts protect buyer and seller interests. In the UK solicitors or conveyancers oversee property ownership transfers.

Mortgages work a little differently too. The average mortgage deal term is only 3.5 years in the UK, Americans prefer longer last deals, often opting for 15 and 30-year fixed-rate mortgages. Unfortunately, your US credit score is unlikely to be considered in the UK. This is because lenders use the electoral register to validate your information in the UK, whereas in the US it’s based on your Social Security Number.

So if you’re an American buying in London, no matter how wealthy you are, you may struggle to get a mortgage approval with the mainstream UK High Street banks. A specialist high-net-worth mortgage broker has access to private lenders which can cater to a range of unique circumstances, with much more flexibility when it comes to nationality and foreign income streams. Often, they’ll take into account your overall financial standing, including all income and assets, rather than just focusing on credit score. They can also help navigate the application process on your behalf, a major benefit if you’re not familiar with how things work.

At Enness, since our founding in 2007 we’ve helped many American citizens buy property in London and the wider UK, as well as other global locations. We are deeply experienced in navigating all of the related nuances that need to be applied when the applicant is not a passport holder of the country where the transaction is required.  So please get in touch today to find out more about million plus mortgages for American nationals.