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The rise of a new industry owing to the UK house purchasing trend
HONG KONG SAR - Media OutReach - 23 March 2021 - Different from other agents, BNOOK Property Limited (BNOOK) does not only source properties for clients, but also follow-up all the search documentations as well as surveyor reports, handling and advising any critical matters that possibly happen in purchasing a property. No matter for clients planning to relocation or buy-to-let, the whole BNOOK team assists all buyers from the beginning to completion, walking through all this uneasy UK property purchase journey with clients.
As a registered company in both HK and UK, BNOOK specializes in searching for second-hand brick and block properties. The service locations cover from the South (such as Southampton) to the North (Scotland). BNOOK is a Property Consultant who almost covers the largest number of areas in the UK.
Top 10 potential risks when purchasing UK properties
Everyone especially for the Hong Kong (overseas) buyers seem to be fancy about properties in the United Kingdom lately. Some of them aim at investing for stable cashflow returns; while some of them are for living because of relocation to the UK. The new demand leads the rise of a new industry. Nowadays, there are people claimed to be Property Sourcing Agents. However, some of them are one-man-band; while some do not even own a company, but are helping Hong Kong people to do "viewings" only as part-time "viewers".
Below are the top 10 potential risks that overseas buyers must pay attention to. These are gathered by BNOOK which is founded by a group of experienced UK property investors. BNOOK reminds all overseas buyers should carefully select a reliable UK Property Consultant who helps to avoid all these traps.
1) New-built property, Property under construction, Second-hand property, Auction House, Retirement House, etc. There is a huge variety of UK properties.
It's not like all the apartments in HK, there is a huge variety of UK properties. For example, an "Auction House" is immediately exchanged (must be completed) once the buyer wins the bid, even though there are any defects after reviewing the Home Buyer Report. BNOOK provides due diligence service of filtering all these properties for clients and to make sure that there are no tricks before recommending and putting offers.
2) Title and ownership are not just a fine line in between
In the United Kingdom, purchasing a house is usually with the land. Some of them are Freehold, Leasehold or even Shared Ownership. There was a case happened to one Hong Kong buyer who was originally looking for a Freehold property, unfortunately the previous owner had ceded certain part(s) of the territory for building one another house and sold it for profit. Eventually the buyer had lost the part of the territory. Therefore, an experienced Solicitor / Conveyancer as well as a Property Consultant (but not the part-time Sourcing Agent) who are proficient in UK properties would be helpful to the buyers to figure out and advise whether the property is worth purchasing at no risk.
3) The complexity of a Home Buyer Report
A full Home Buyer Report is conducted by a professional Surveyor. The report contained more than 30 pages that listed the conditions of structural problems, any signs of damping, any potential risk of asbestos, and all of these conditions will be labelled with 3 levels of urgency. The report is explained with many technical terms and jargons that are not easily understood merely by a "Google Translate" tool. BNOOK's service includes reviewing and analysing the details of the report, help judging whether this property is worth purchasing, and these are more than just a "property seller" can handle.
4) The solicitor disappears or neglection after engagement
In terms of working attitude, there is a cultural difference between Hong Kong and the United Kingdom. The former one used to be fast-responding, efficient, and more flexibility in work; while the latter one is rather following the prescribed route and not to be too aggressive. There was a case of client's previous experience before reaching BNOOK Property Limited - there was no news in 2-3 months after engaging the solicitor, and it was found that the solicitor did not even started any searches after the mortgage has been offered. As a result, the seller was not willing to wait anymore and terminated the sale. What the client had lost was not only the time, but also the surveyor fee of that property as well as the solicitor deposit. Hence, choosing the reliable solicitor is critical. One of BNOOK's services is to recommend the reliable solicitors with reasonable price that could contribute in completing the property smoothly.
5) Earning stable and high salary does not necessarily mean that the mortgage application will be successful
Unlike HK, there is no so-called "stress-testing" in the UK. Earning high annual salary and stable employment may also result in a failure in mortgage application because of the applicants' large amount of spending and private loan. Each bank has its own formula of calculation. Mortgage brokers are here to explain to the applicants on the requirements of the lender, and select the most suitable lender based on the applicants' financial situation. It is always recommended to declare all the items that are required. The case might still be disapproved even though the Approval in Principle has been obtained. BNOOK refers experienced mortgage broker with large bank network which can help finishing the property purchase.
6) There is a "chain" on the property that delays a property completion
BNOOK has handled a real case: A client entered the UK via LOTR in September last year. They stayed in an Airbnb and in the meanwhile, they searched for houses by themselves which they thought would be at lower risk. However, 2 months after they have put an offer and proceeded the legal works, the seller kept rejecting the inspection appointment from the Surveyor. Finally, they discovered that there was a "chain" of buying this property because the seller had still not started buying his new property. Turned-out they had to move to another Airbnb for 3 times in total before they had their own property. They did not have an official proof of address for applying school for their children. Eventually, they contacted BNOOK which helped them to get a very lovely house with no chain, introduced a reliable and fast-responding solicitor, and followed up tightly on the schedule. During the purchase, BNOOK reviewed all the reports, arranged the exchange and completion. As a result, the property was completed in 1.5 month which was definitely the fastest case that have ever seen. Now the client had already moved-in and the children are attending school. At the most critical moment, a team of professional Property Consultant plays the most important role.
7) The ideal school and the house are very near, but they are from two different councils
Although catchment area is important when applying for school, only 0.1 – 0.3mile distance from the ideal school to the property does not guarantee a school offer. If the council of the property is not clarified, there may even has no eligibility to apply for the school just because they are not in the same council. Having a completed due diligence work to avoid such low-level mistake is the basis criteria of BNOOK as a professional Property Consultant.
8) Be aware of the high-flood-risk property
Some dishonest (or unexperienced) agents promoted some properties with high flood risk to Hong Kong people. As everyone knows, weather in the UK is always unpredictable and raining is common. Apart from inconvenience, the most concerned point is actually whether the insurance company would cover it, and if the insurance company does not cover the high-flood risk property, there may not be able to get any mortgage approval. The due diligence service of BNOOK can be able to acknowledge all these potential risk in advance so as to reduce the clients' potential risk.
9) The selling price is too aggressive
There is a difference in property market from HK and the UK. In Hong Kong, seller is used to place a higher price for the buyer to negotiate; in the opposite, in the United Kingdom, seller is always placing a guide price for all buyers to bid, and usually the buyer who placed the highest price got the offer. To be honest, this practice made the Hong Kong buyers quite anxious because they never know what is a reasonable bidding price. Of course, the seller will reject a price that is far below their expectation; but the buyer will never want to offer a price higher than the market value. BNOOK helps evaluating the marketing value of the property, listing all necessary expenditures of buying the property, addressing the potential risks, investigating and setting up an optimal ceiling price with the buyer and making offer to the seller agent. The advantage of setting up the ceiling price help control the budget and not to push up the market.
10) A mixed-population does not equal to high crime rate of the district?
United Kingdom itself is a diversifying country where people are from all over the world, such as European, Asian, Indian, Middle Eastern, Jewish, etc. A community with a mixed-population does not definitely equal to high crime rate. Talking about Reading where is located in the Southern part of England as an example, many international companies set up their headquarters here, and thus there are many people from different countries relocated to this beauty place. They are young, lively, educated and polite as we can see. Immigrant who wants to integrate into the UK and start a new life more easily, it's also a good choice to stay in a community with mixed-population. Therefore, looking only into the figure of crime rate is always more representable than looking on the data of culture diversification when choosing the location to settle. The team of BNOOK who are based in the UK can reduce the risk of remote purchase, having physical visit to the place for client. This can be done by live time conference and video, feeling the environment and security level of each district.
In a nutshell, purchasing UK second-hand property is not as difficult as imagine, but there are many hidden details that requires professional advice and follow up. When it comes to a trend of purchasing UK properties, it is always recommended to select the Property Consultant who are experienced in second-hand brick and block houses rather than the general property seller. The former one provides professional advice, follows up with the who purchase procedure until the property is exchanged and completed; while the latter one (especially for those part-time viewers who may not completely familiar with purchasing second-hand property) requires the clients to handle all the documentations and communications by the themselves.
Founders of BNOOK Property Limited are a group of experienced UK property investors located in the UK. Any property that they recommend to clients are up-to-the-standard of what they would also live or invest, while the buyers will be well-prepared and rest assured by advising every step and any risk of purchasing UK properties.
Understanding BNOOK Property Limited in 3 minutes: https://youtu.be/GfufaIIZziI
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