Due to the current turbulence in the market, some people predict that property investments from Asian buyers will decline in the United Kingdom, but reality shows something else. Amid the Covid-19 crisis and post-Brexit situation, Asian buyers managed to retain a stronghold in the property market of the UK. Among them, Malaysian buyers manage to retain a stranglehold in the UK property market.
Real estate in the United Kingdom is highly favoured among Malaysian property investors, driven by stable rental income and accommodation for their children pursuing their studies in the UK. However, uncertainties over UK’s withdrawal from the European Union (Brexit) has put a slight damper on investor confidence. Brexit has caused many investors to adopt a wait-and-see stance. Nevertheless, the general interest in UK properties has not waned yet.
Most Malaysian investors comprise the upper-middle class, with 60% buying for investment and 40% for their children studying in the UK. Around 64,500 people born in Malaysia live in England and Wales, and a third of these are residents in London. Just over 17,000 students originating from Malaysia were studying at the UK’s higher education institutions last year, making Malaysians the fourth-highest non-EU group, after the far more populated countries of China, the USA and India. Five British universities have set up campuses in Malaysia, and there are dozens of British International Schools throughout the country. Aside from the strong educational links, London’s role as the heart of the financial services of Europe also provided the impetus for Malaysian companies to invest.
Asian investors have no restrictions to purchase and to get full freehold ownership of property in the UK.
The UK is the first choice for many Asians, especially from Hong Kong, Singapore, and Mainland China, as they look for a stable place to store their assets. Overall, the buying process is simple, and there’s no need to open a local limited company or set up complex contractual agreements with UK citizens.
Asian investors have no restrictions to purchase and to get full freehold ownership of property in the UK.
The UK is the first choice for many Asians, especially from Hong Kong, Singapore, Malaysia and Mainland China, as they look for a stable place to store their assets. Overall, the buying process is simple, and there’s no need to open a local limited company or set up complex contractual agreements with UK citizens. Moreover, foreigners are not required to have UK citizenship to buy and own land, like in many developing countries, which gives you plenty of options and opportunities. That means, as a foreign investor, you are eligible to purchase all types of properties, whether under-construction, new or resale.
As a foreigner, you need to do certain things to buy a property in the UK, including the recruitment of an experienced lawyer.
Legal fees, lender fees, removals and broker fees – it soon adds up. Work out how much this move will cost now, so there are no nasty surprises down the line. Your Move has partnered with Embrace Financial Services, and their professional financial consultants can help you calculate the costs involved in the house buying process.
You should check what kind of mortgage you can afford. Often with access to a comprehensive range of mortgages across the market, the mortgage advisers are in a fantastic position to advise you on various options. Usually, the advisers will help you obtain a 'Decision in Principle from a suitable lender, which will give you the confidence to start looking for a property.
Now you have an idea of what you may be able to afford, and it’s time to start looking for a house to buy. Estate agents and property portals allow you to register for daily updates of new properties. It’s worth contacting estate agents in the area you are looking to, to get some advice. Looking further afield at surrounding commuter towns, for instance, could save you money.
Once you’ve found a property you’re interested in, it’s time to book a viewing. Please take a look at our house viewing tips before you go. Most estate agents now offer virtual viewings and physical viewings so you can get an idea of whether or not you like a property before taking the time to visit it in person.
You have been provided with a ‘Decision in Principle, which means your lender is prepared to consider a mortgage application from you for up to a stated amount. You could have your solicitor at the ready too. It’s time to make an offer. Don’t be perturbed if your first offer isn’t accepted – remember both you and the seller are negotiating for the best price.
When the seller’s estate agent has the details of both parties’ solicitors, they will confirm that the sale is agreed, subject to contract. You will receive a Memorandum of Sale to confirm this.
‘Conveyancing’ sounds like boring legal stuff, but it’s everything that needs to happen to make the property officially yours. It can be a confusing process, and you need a solicitor to make it happen. Your Move can introduce you to a solicitor and offers a no sale no fee conveyancing service with a guaranteed fixed price (this excludes disbursements) to keep everything easy.
Now is the time to get back in touch with your mortgage adviser to agree on a suitable mortgage deal for you and complete the application. This is a good time to consider how to protect your mortgage. What if the worst should happen? If you weren’t around to support them financially – due to illness or death – your family could be under pressure to meet your mortgage payments, or the lender could seek to gain possession of the property.
In most cases, your mortgage lender will arrange this valuation, which merely confirms to them that the property is worth what you are being lent. It will not give details on the property's condition, and for this, you should book a house survey. Our sister company e.surv can advise you on a suitable survey for the property. Without a survey, you may not be aware of costly work that needs to be done.
Once you’ve had an offer accepted, it’s time to get the ball rolling on all the complicated legal stuff by instructing your solicitor.
The seller’s solicitor will receive the title deeds from the seller and draw up a contract. This will be sent to your solicitor.
Your solicitor will contact the seller’s solicitor to confirm exactly what is included in the sale. Your solicitor will enquire about things like the boundaries, any disputes and any alterations that have been made.
Your solicitor will perform searches of Land Registry and Local Authority information. They will be checking for planning history and any potential developments around roads, drainage and mining near the property.
Around this time, you should receive your mortgage offer, along with all the terms and conditions surrounding your mortgage. You will need this before you can exchange contracts.
You’re close to completion, so it’s a great time to get quotes for your building and contents insurance. Your Move has an Insurance Services department that offers a range of competitive products from a panel of insurers. To keep things easy, we’ll be in contact with you to discuss your needs. Don’t forget; you need all relevant insurance policies to begin from the exchange of contracts date.
Your solicitor will advise you when it’s time to sign on the dotted line.
Your solicitor and the seller’s solicitor will agree on a date for exchanging contracts and completion (i.e. move-in day). It’s a good time to start getting quotes for removals, too, as you can set a provisional moving day.
Your deposit will be sent to the seller’s solicitor, along with the signed contract. You are now legally bound to the purchase. All relevant insurance contracts should now be put into force.
Your solicitor will pay the balance of the purchase price to the seller’s solicitor. Once the money is received, the seller’s solicitor will inform the estate agent, and the keys will be released. The property is now yours. Success!
A lawyer plays a significant role in buying or selling a property. Once you have found a property you wish to commit to, you should hire a lawyer before entering into a binding contract with the seller. The lawyer will be able to do due diligence to ensure that the property deal is legitimate and look through your contract to protect your interests. Upon signing the contract, you will usually be required to pay a deposit. This is most commonly 10%, but it can sometimes be just 5%. Your lawyer will handle the paperwork and alert you to any sums of money to be paid by the requisite deadlines. A resale property transaction can take a few weeks to reach the completion stage.
Property in the UK can be freehold or leasehold, with the typical lease being 99 or 125 years, although shorter leases can also be found, particularly in London. If you are hoping to finance your property with a bank loan, it is advisable to avoid leases of less than 60 years.
You can either take out a mortgage from a bank in Malaysia or a bank in the UK. Should you choose a UK bank, be aware that you will typically have to take out a GBP loan. This could expose you to foreign exchange risk in the event of any currency fluctuations. Qualifying for a loan from a UK bank is also likely to be more difficult for foreigners than locals, and you may be excluded from the lowest interest rates or face more stringent income requirements. However, be aware that investing in overseas property requires a lot more due diligence. You should ensure that you thoroughly research the location and the property itself before committing to a purchase.
Looking for the perfect investment in the United Kingdom? Please have a chat with our esteemed professional team, and allow us to help you find the one called home.
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