ANGLODAN PROPERTIES LTD - Your Partner for U.K. Property Investments

Other Advantages

Lower Transaction Costs
Active Property Market
No Property Taxes
No Rent Control
Straight-forward but Flexible Financing Options

In addition to the advantages mentioned in the Factors section, there are a number of other advantages particular to the British property market:

Lower Transaction Costs

The total buying costs in England and Wales are roughly around 4% of the property value for a property worth £100,000. Sales costs are roughly around 3.5% of the sales price for such a property. See also the sections on Buying Costs and Sales Costs.

Active Property Market

In November 2003 it took just over five weeks on average to find a buyer for a property and the seller achieved 95.2% on average of the advertised selling price (Source: Hometrack market report, November 2003). It should be added, however, that in spite of the speed at which a buyer is found, the entire process from when an offer is accepted to the time when the keys are handed over typically takes 1-6 months. This is rather long by European standards.

According to the National Association of Estate Agents (NAEA), the average period from when a sale is agreed to contracts are exchanged is nine weeks. (Source: NAEA monthly survey for August 2003).

No Property Taxes

The British government does not impose any annual property taxes on residential property. A council tax is levied on the occupant(s) of the property. This tax is determined on the basis of the size of the property and the individual circumstances of the occupant(s). If the property stands empty for a given period, the Owner must pay half the Council Tax that would otherwise have been applicable for that period. See also our section on Taxation.

No Rent Control

Rent is determined by supply and demand and is in principle not subject to any restrictions set by the government. There are, however, certain statutory standards that apply to tenancy agreements. The agreement or contract will usually be an ‘Assured Shorthold Tenancy’ valid for a minimum of six months and a maximum of one year (with an option for extension). During this period the tenant is guaranteed a minimum of 6 months in the property at a fixed rent, provided he honours his obligations as outlined in the contract. After the initial six months the landlord will usually be able to give the tenant two months notice of the termination of the tenancy agreement, whereas the tenant may give the owner a one-month notice.

Straight-forward but Flexible Financing Options

British mortgages are traditionally provided by building societies but are also provided by banks. The standard period of a residential mortgage is 25 years but shorter or longer periods are also available. There are various repayment profiles to choose from but the most common one aims to provide a stable monthly payment which includes both interest and repayment. At the beginning most of this amount consists of interest whereas it mostly consists of repayment at the end of the mortgage period. However, the interest part of the payment may vary according to fluctuations in interest rates.

In case the buyer is expecting interest rates to increase, it is possible to fix the interest rate for up to five years and in some cases even longer. If done at the outset, this would guarantee that interest payments will not increase for the period where interest payments constitute the largest share of the monthly mortgage payments.


	Other Advantages Lower Transaction Costs Active Property Market No Property Taxes No Rent Control Straight-forward but Flexible Financing Options In addition to the advantages mentioned in the Factors section, there are a number of other advantages particular to the British property market: Lower Transaction Costs The total buying costs in England and Wales are roughly around 4% of the property value for a property worth £100,000. Sales costs are roughly around 3.5% of the sales price for such a property. See also the sections on Buying Costs and Sales Costs. Active Property Market In November 2003 it took just over five weeks on average to find a buyer for a property and the seller achieved 95.2% on average of the advertised selling price (Source: Hometrack market report, November 2003). It should be added, however, that in spite of the speed at which a buyer is found, the entire process from when an offer is accepted to the time when the keys are handed over typically takes 1-6 months. This is rather long by European standards. According to the National Association of Estate Agents (NAEA), the average period from when a sale is agreed to contracts are exchanged is nine weeks. (Source: NAEA monthly survey for August 2003). No Property Taxes The British government does not impose any annual property taxes on residential property. A council tax is levied on the occupant(s) of the property. This tax is determined on the basis of the size of the property and the individual circumstances of the occupant(s). If the property stands empty for a given period, the Owner must pay half the Council Tax that would otherwise have been applicable for that period. See also our section on Taxation. No Rent Control Rent is determined by supply and demand and is in principle not subject to any restrictions set by the government. There are, however, certain statutory standards that apply to tenancy agreements. The agreement or contract will usually be an ‘Assured Shorthold Tenancy’ valid for a minimum of six months and a maximum of one year (with an option for extension). During this period the tenant is guaranteed a minimum of 6 months in the property at a fixed rent, provided he honours his obligations as outlined in the contract. After the initial six months the landlord will usually be able to give the tenant two months notice of the termination of the tenancy agreement, whereas the tenant may give the owner a one-month notice. Straight-forward but Flexible Financing Options British mortgages are traditionally provided by building societies but are also provided by banks. The standard period of a residential mortgage is 25 years but shorter or longer periods are also available. There are various repayment profiles to choose from but the most common one aims to provide a stable monthly payment which includes both interest and repayment. At the beginning most of this amount consists of interest whereas it mostly consists of repayment at the end of the mortgage period. However, the interest part of the payment may vary according to fluctuations in interest rates. In case the buyer is expecting interest rates to increase, it is possible to fix the interest rate for up to five years and in some cases even longer. If done at the outset, this would guarantee that interest payments will not increase for the period where interest payments constitute the largest share of the monthly mortgage payments.