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Buying a property outside the UK

If you're looking to buy a property outside the UK, it pays to do plenty of research.

Whether you're thinking of Adelaide or Abu Dhabi, here are some things to consider before you go ahead.

Get independent advice

From tax and planning to outstanding utility bills, there's a lot to think about when buying a property outside the UK. The process for buying a property may be quite different. Your mortgage provider, financial adviser or lawyer may be able to offer help. But even so you should budget more time, energy and extra money than you would for buying a home in the UK.

The Foreign, Commonwealth & Development Office (FCDO) recommends that you get independent legal and financial advice at every stage of the buying process. It provides a list of English-speaking lawyers and interpreters and translators in different countries to help you.

Your adviser can help with more than just the paperwork involved in buying a property outside the UK. They can also give you valuable insight into the region and potential pitfalls of local ownership. You should use a lawyer who is familiar with local property law, fluent in the local language (and English), and completely independent.

Protections and laws may be different

When you're buying property outside the UK, make sure you've got the legal protections you need. You won't be covered by the Financial Ombudsman Service or Financial Services Compensation Scheme so you'll be relying on the local legal system and any extra protections your lawyer may negotiate for you.

Inheritance laws may be different to the UK, so you may want to draw up a will in the country or region where you're buying a property. That means it will be inherited according to your wishes. It's also worth looking at how an inherited property may be taxed, so you can consider the longer-term impacts.

Ways to fund a property outside the UK

There may be different options for you to fund a property outside the UK, whether it’s a holiday home, an investment or a place to retire to. 

Arrange an international mortgage

This is a type of mortgage you take out on a property that’s not in the UK. 

If you want to use the property itself as security, you'll probably need to get a mortgage from a bank or other lender in the country you want to buy in. You could also use a specialist broker.

Buying a property outside the UK is likely to be very different to doing so at home. Non-residents may need to put down a larger deposit for a mortgage, compared to residents.  

Bear in mind the extra risks. For example, if your income is in a different currency to your international mortgage, there’s a risk that exchange rate fluctuations could affect your ability to pay. And, if you're letting the property, you’ll need to cover your mortgage payments, even if your property is empty.

Some UK banks, including HSBC, offer international banking services to help make the process easier. If eligible, you may be able to apply for an international mortgage. You’ll need to check that we support your chosen country. 

Explore: International property mortgages with HSBC 

Release equity from your UK home

Home equity is the value of your property, less the amount of any outstanding loans secured on it, such as a mortgage. For example, if your mortgage balance is £100,000 and your home is worth £400,000, you have £300,000 equity in the property. 

If you can afford to, you may consider releasing equity from your UK home, and using that money to pay for a property outside the UK.

But you need to think carefully about doing this. 

When you borrow more money against your home, the size of your mortgage – and your monthly repayments – will increase. You need to make sure you can afford the repayments to avoid your UK home being repossessed. 

House prices can go down as well as up. If the value of your UK home falls, you could go into negative equity – where you’ve borrowed more money than your home is worth. A change to exchange rates could also affect the value in pounds sterling of your purchase outside the UK. 

Please note – we don’t provide equity release to buy a property outside the UK. 

Use savings to buy a property outright

If you have the funds already, buying a property outside the UK in cash can overcome the challenges of borrowing money. It’s important that you can afford the property and have enough savings to cover expenses, such as: 

  • international bank transfer fees
  • tax and legal fees
  • translator fees
  • furniture, shipping and insurance costs
  • home insurance
  • landlord insurance (if buying an investment property to rent out)
  • ongoing costs to maintain the property