Selling a UK Property While Living Abroad
The transparency and convenience of an auction sale makes it an ideal choice for UK property owners living overseas. Auction is a reliable method of sale for both vacant and tenanted properties.
How to sell a UK property while living abroad
This article is intended to help property owners who live a long distance from their UK property (e.g. expats) and want to know the best way to sell a UK property from abroad. It covers the main routes to selling and pays special attention to the benefits of selling a property at auction.
Last updated by Mark Grantham on 13th May 2022
If you thought auction was only suitable for properties in poor condition, you’re in for some news! Virtually any type of property can be sold by auction, including properties in good condition. Property auctions in the UK have evolved to cater for the more “average” property seller.
Why sell by auction?
✔ Sell to the highest bidder
✔ Sales don’t fall through
✔ Suitable for any property
Why not request a free pre-auction appraisal for your property? It only takes a few seconds. Or feel free to call us on 0800 862 0206 if you have any questions. Or if you’re calling from outside the UK, please dial 0044 800 862 0206 or 0044 20 7183 2623.
“…it’s the transparency of an auction sale that makes it an ideal choice for UK property owners living some distance away from the property “
We’ve written this article because of the surprisingly high number of enquiries we receive from UK property owners living overseas, who are researching the best routes to selling their property in the UK. In the majority of cases the owner has rented their UK property using a local letting agent, and now the time has come to sell the property.
Owning and managing a property whilst you’re living overseas can be difficult. Whilst there’s nothing to stop an overseas property investor from successfully operating a portfolio of properties in the UK, it does come at a financial cost. For example the many Chinese and Russian investors pay generously to local agents for the privilege of their bricks and mortar investment in the UK to be fully managed. For property owners who have one or two properties it’s quite different.
Calling from outside the UK? Please dial 0044 20 7183 2623 or send us an enquiry.
When you’re living hundreds of miles away from the property, unless you have a reliable contact “on the ground” in the UK, you might feel disconnected from what is actually happening. We’ve seen cases where letting agents have been letting 3 bedroom houses to 5 separate parties by converting the reception rooms into bedrooms, and the income they receive is 3 times the amount they’re reporting back to the landlord! This is commonly known as rent-to-rent, where the letting agent agrees to pay the landlord a guaranteed income. If you don’t mind the fact that the letting agent is using your property as a mini-hostel then that will not necessarily a problem, until it comes to selling the property. When the letting agent is making a healthy profit from renting your property it can all of a sudden become quite difficult to arrange a sale!
This is quite an extreme case, but worth bearing in mind when considering your sale options. In other words, how do you ensure a transparent property sale, with no hidden agendas?
If you’re living away from the property, it can be a good idea to sign up to the Land Registry’s fraud alert service. The service alerts you by email to any new changes to the title, for example if someone is applying for a loan to be secured against the property or even attempting to sell the property without your consent, then the alert service will send you an email notifying you of the change.
In the event of receiving an email stating that there has been a change to the title you should contact the Land Registry and your solicitor as soon as possible.
Ordinarily Land Registry would send a letter to the property address notifying the owner of a change to the title, but if you don’t live there then you won’t receive the letter. If you’ve moved away from the property permanently you should also advise the Land Registry of your new correspondence (postal) address.
More about the Land Registry’s fraud alert service.
Australia is the most popular destination in the world for UK expats. According to the Australian Governments’ Department for Home Affairs, at the end of June 2019, almost 1.2 million people who were born in the United Kingdom were living in Australia. This makes UK expats’ the largest migrant community in Australia, equivalent to 15.7 per cent of Australia’s overseas-born population and 4.7 per cent of Australia’s total population.
One of the difficulties of selling a property on the other side of the world, is the time difference. Living in a different time zone can add delays to the negotiation and conveyancing process, when selling with an estate agent.
Most of the Australian expats that we talk to are familiar with the benefits of selling at auction, because it’s the primary method of selling properties in Australia! And they’re interested to learn that auction has become more popular in the UK in recent years. The traditional “in-the-room” auctions still cater for run-down and dilapidated properties, but there are modern-style auctions that cater for all property types.
When selling your UK property while living overseas, it’s worth considering the following points:
- Obtaining an independent/unbiased property valuation.
- Selling tenanted? Keeping your tenant updated.
- Selling vacant? Appointing a local keyholder.
- Exchange rate (timing for a favourable rate).
- What tax do you need to pay?
- Finding legal services in the UK and locally.
- Appointing the best suited auctioneer or estate agent.
Preparation is key to a successful property sale. And an important start is to compare your options before rushing in to accept the first offer you receive. Read on for more information about the benefits of selling by auction.
Selling a property by auction is very straightforward. There are 2 key features of an auction sale that make it a good choice for selling a property in the UK when the owner lives overseas:
1) Transparency – Not being local to the property can make it difficult to know what’s really happening. And selling by private treaty (estate agency) doesn’t help. A private treaty sale relies on negotiating with the one (and only one) prospective buyer who’s offer you have accepted. If the prospective buyer’s surveyor or builder identifies a problem with the roof, damp issues, or a problematic neighbour, it’s difficult to know the truth if you can’t see it with your own eyes. Surveys and “final inspections” usually come late in the sale process, sometimes many months after an offer price was initially agreed. And so unfortunately, buyers often attempt to re-negotiate their purchase price late in the process. It’s not the fault of the estate agent, or the surveyor, it’s just the system we have in England and Wales is designed to protect the buyer. This often means the seller loses out.
The process for selling at auction is different. Auction buyers don’t have the opportunity to take advantage of last-minute price negotiations. With an auction sale, the property is sold to the highest bidder. The transparency of an auction sale provides peace of mind to the seller, knowing they’re not being backed into a corner or making a decision based on information they’re not truly sure about.
2) Convenience – The reliability and speed of an auction sale make it a good option for overseas property sellers, looking to maximise the sale price of their UK property. The rules of auction put the seller in control of the sale; the seller just has to agree to the minimum sale price they are prepared to sell for (the reserve price) and help with preparation of the auction legal pack. The auctioneer takes care of everything else, and the market decides what your property is worth – the property is sold to the highest bidder. There are no protracted negotiations, sales falling through or late-stage price re-negotiations.
If you live overseas and are selling a property in the UK, you will need to appoint the services of a UK based solicitor to help with the sale of your property. A good starting point for finding a suitable solicitor is the Law Society website. The UK based solicitor will need to verify your identification documents, but this can usually be done by a solicitor/ notary in your local country, so that saves having to post originals of you ID documents by overseas courier.
You may be liable to payment of Capital Gains Tax when selling a property that is not your own home, that’s regardless of whether the property is has been tenanted or not.
Capital Gains Tax is based on the difference between the amount you paid for your property and the amount you got when you sold it. There may be an exemption, or partial exemption if you previously lived in the property as your own home.
If you sell a UK property while you are living outside the UK, you may have to pay a foreign tax on any gain that has arisen. Each country has its own rules on capital gains tax and it is advisable to to take advice locally.
You may be able to claim double tax relief, if you are liable to tax on the disposal of the asset in another country as well as the UK.
Why is auction well suited to selling a UK property when the owner lives overseas? Auction provides a prompt and reliable way to sell for a fair price. The auction process not only reduces the influence and control from the buyer, but also from the estate agent.