3 Common Pitfalls of Buying First-Hand Properties in the UK

In recent years, the UK has become the most in-demand overseas property hotspot for Hong Kong citizens. However, the long-distance has sometimes led to many victims falling into pitfalls when developers are unable to complete a development. In turn, this may result in financial losses and cause unnecessary stress. This article shall walk you through 3 common pitfalls when buying first-hand properties in the UK.

Case 1: Developer goes bankrupt and disappears

When some real estate agents promote a particular development, often they will emphasise all the positives such as financial rental returns, capital gain etc for an investor, in order for the prospective buyer to proceed with a purchase and place a deposit - however, investors ought to look into the financial backings of a property developer and whether or not there are any warning signs of bankruptcy or financial struggles. There have been instances where projects have been abandoned and left unfinished due to bankruptcy. As overseas property agents will not/are not responsible, buyers have nowhere to turn to.

Case 2: Ground Rent Affects Mortgage Approval

UK property requires payment of ground rent which will directly affect the resale potential of a property. Some local banks have clearly stated that they refuse to offer mortgages to buyers in case of an abnormal rise in ground rent. Since ground rent is not a necessary for Hong Kong properties, many Hong Kong buyers who need to apply for a mortgage are not aware of such importance.

Case 3: False Product and Unsatisfying Quality

It was reported that a Hong Kong buyer, who purchased a new UK property through a Hong Kong real estate agent, was cheated by a refurbished property. Another buyer who had purchased a student accommodation was notified by the management company that the flat is not permitted to be rented out. Other buyers have also been misled of the size of the property significantly smaller than the one specified in the contract. At those stages, even if the landlord willingly reduces rent or sells it at a lower price, he/she has no choice but to get stuck in capital lockup if the property management company opposes the acts since the flat has already been handed over to the company.

Buy Salboy Projects and Stay Away from Traps

Salboy, both a leading real estate developer in Manchester and one of the top ten developers in the UK, have more unique advantages compared to other local developers. With a sound financial background, we never rely on down payment from buyers as project funds and have no worry over development projects due to our sufficient funds.

We also provide one-stop services for buyers. The Asian headquarters strategically located in Hong Kong allows customers to directly purchase our development projects without going through third-party real estate agents and intermediaries. For any enquiries and support requests, we have a dedicated team to provide buyers with support and assistance.

In addition, Salboy works closely with professionals from different sectors to fully take care of your actual needs. These include: buyers can have direct meetings with British solicitors in our Hong Kong office, and entrust Salboy's leasing management company LOCAL on leasing and rent collection matters which offer peace of mind thanks to its considerate UK property purchase services.