A Complete Guide for UK Citizens Buying Property in USA

Property prices in the UK have risen steadily in the past decade. Unfortunately, this price increase has not accompanied the rise in wages and yearly salaries, which left a lot of people unable to purchase property in the UK. 

For those reasons, many UK citizens are looking at foreign countries, particularly the US, to purchase real estate for investment and primary residences (for those looking to make a permanent move from the UK to the US).

In this article, we’ll deal with some of the most pending questions and concerns UK citizens might have about buying a house in America. We’ll also share some of the main reasons why buying property in the USA as a UK citizen can benefit you, along with the top things you should consider before buying US real estate from the UK. 

Let’s begin. 

Can a UK Citizen Buy a House in USA?

Yes, they can. There are no laws preventing UK citizens from buying and owning property in the USA. Because of how the UK and US are connected (in both economic and cultural terms), UK citizens can much more easily buy US property than many other foreign nationals. 

Buying Property in USA as UK Citizen: Required Documentation

UK citizens who want to buy property in the US will, for the most part, require the following documentation:

• A valid UK passport;
• Citizenship or residency documents ;
• Social Security Number (SSN);
• Individual Taxpayer Identification Number or ITIN (for those who can’t get an SSN)
• Valid US visa;
• Various financial records (including job history, bank statements, copy of UK credit report, pay stubs, etc…)

Buying a House in America From UK: Most Popular Places for British Citizens

According to the most recent 2023 US real estate statistics, UK citizens were amongst the top 10 foreign buyers of US property and represented around 3% of all foreigners that bought US real estate in said year. Collectively they have invested just under a billion dollars. The most 

popular places for UK citizens buying real estate in the US include:

• Florida
• New Jersey
• California
• Texas
• North Carolina

Top 3 Reasons for Buying Property in USA as UK Citizen

There are around 700,000 UK citizens currently living in the US. A lot more of them visit the US every year for various different reasons, such as: 

• To study, 
• For work, 
• To go on a vacation, 
• To make a permanent move to the US, 
• Or, even buy a property. 

The main reasons why UK citizens buy US property include:

Buy a Primary Residence

The US is a land of opportunity and it attracts millions of immigrants each year, who are all in pursuit of a better life, more options for employment, bigger salaries, and similar. And, because moving from the UK to the US is relatively simple, a lot of those immigrants are from the British Isles. Once they move to the States, settle in their jobs, and save up some money, many choose to buy their main residence in the US.

Buy a Rental Property

There are a lot of UK citizens who choose to invest in US rental property. One of the primary reasons for this is that the US real estate market is much larger than the UK’s market and offers many more opportunities for different types of investors ( including both beginners and experienced investors looking to diversify their portfolios). 

To give you an example of how large the US real estate market is, the current estimates put the value of the entire US market at around 95,7 trillion dollars. In comparison, the UK real estate market is worth around 360,27 billion, which makes the UK market just about 260 times smaller than the US real estate market. 

A massive problem with the UK’s real estate market is that the demand is high, and supply is low. This artificially increases property prices in the UK and makes it difficult for people to begin investing in real estate. On the other hand, in the US, supply, and demand are mostly balanced out, which allows even newcomers to the real estate game to find cheap properties in the US that they can then purchase and rent out to generate income. 

Buy a Vacation Home

The United Kingdom is a nice place to live, but it’s not famous for having great weather. On average, the country has just around half a year of rainy days. That’s why many UK citizens spend their vacation days abroad, visiting countries like Spain, France, and the US. And, a lot of those that come to the US, choose to buy a vacation home there. The most popular places for UK citizens to buy a vacation home in the USA include:

• The state of Florida
• The state of Texas
• The state of California 
• The state of North Carolina

How Can a UK Citizen Buy a House in USA?

There are two main methods through which UK citizens can buy a house in the USA. They are:

• Via US mortgage loan for UK citizens
• Or, by an all-cash purchase

Each of those two ways has its own merits. The latter is for those UK citizens who have enough cash on hand to buy a property outwrite and who don’t want to deal with additional paperwork that comes with applying for and getting a mortgage loan as a foreigner. But, this method is not for everyone, as many people don’t have access to large quantities of cash needed to purchase a US property. 

On the other hand, mortgage loans allow more people to buy properties in the US by requiring them to only have enough cash to cover the down payment. Additionally, some other benefits come with purchasing a US property with a mortgage loan, including:

• Allows buyers to look at properties outside of their immediate price range — Not everyone who wants to buy a US property will have enough cash on hand. By financing a property through a mortgage loan, potential buyers can purchase real estate at a much higher price point than the all-cash option would allow them to do.
• Buying real estate with a mortgage loan comes with tax benefits — The interest payments on mortgage loans can be deducted from taxes. And, depending on the exact US state, there might be some more tax benefits that buying a house via mortgage loan can bring to the buyer.
• Builds credit history — Newcomers to the US, and UK citizens that have a temporary or even a permanent residence in the States, all want the same thing: to build their US credit history. Paying off a mortgage loan can positively affect both credit score and credit history, allowing UK citizens more access to various financial services available in the US.

Buying a House in America From UK: Financing Options

We’ve talked a bit about why mortgage loans are a good option for many UK citizens who want to buy a property in the US. Due to how connected the UK and US are (economically, culturally, etc), UK citizens can get mortgage loans even without having a US credit score or history. Now, let’s mention some of the most popular mortgage loans for UK citizens buying a house in America:

• Foreign national mortgage loans
• DSCR loans
• Conventional mortgage loans
• Hard-money loans
• Commercial loans
• Portfolio loans

Want to get the best deal on mortgage loans as a UK citizen? Book a free call and find out exactly how we can help you.

Buying Property in USA as a UK Citizen: Two Options

When it’s actually time to buy a US property and get the deed to the house, there are two main ways you can go about doing this:

• Opening an LLC and putting the deed to the house under the company’s name
• Buying a property and putting the deed under your own name

For those UK citizens who are looking to purchase their main residence or even a vacation home in the US, there’s no particular reason to open an LLC. The benefits in this case, don’t outweigh the costs, or even if they do, it’s not by much. 

On the other hand, if your main goal is to invest in rental property, opening an LLC and putting the deed to the property under the company’s name has a lot of different benefits, including:

• Various tax benefits
• Protecting yourself from liability
• Protecting your other assets 
• Allows you to safeguard your anonymity

4 Main Things to Consider When Buying a House in America From UK

Here are some of the main things UK citizens should consider when buying a house in America:

Why Do I Want to Buy Property in the US?

The reason why will influence all other aspects of your journey to buy a property in the US as a UK citizen. If you want to buy a primary residence, the main question you should ask yourself include:

• What are the prices like in the area you’re interested in?
• Do you have enough money for the neighborhood that drew your attention, or should you be looking at a different part/parts of town?
• How close is the property to your job? 
• What’s the school district like (if you have a family)?
• Is the neighborhood safe or not?
• How is the traffic in the area?

Now, if you’re looking to buy a rental property, the above questions will still be important but less so. The primary question in that case will be — what are the numbers? What sort of return can you expect on your initial investment? Luckily for you, the US has a lot of places that offer high returns on real estate investments. As an example, let’s briefly look at the city of Milwaukee and the real estate opportunities it provides. The average house cost in this state is just around $185,000, with the average rent for a four-bedroom house (2000 square feet or 185 square meters) being just under $1,900 per month. With these numbers, you can expect a full return on your investment in about ten years or so, which is much better than in most European countries (including the UK).

Location, Location, Location

Location is an important thing to consider when buying a house in America from the UK. It doesn’t only affect the price (the more prime the location is, the higher the price will be) but can also impact how much money you can make from said property (in the case you’re interested in buying a rental property). 

For example, if you’re looking to purchase a short-term rental and become a part of the vacation industry, the process of finding the best city to invest in US real estate can have a huge impact on where you ultimately end up buying the property. To make the most out of your investment, look at places that attract a lot of tourists and have been popular for a long time (usually more than a decade indicates longevity). 

Property Management 

Property management is one of the main concerns of anyone investing in US real estate from abroad. The problem is a bit smaller for UK investors as the two countries are pretty well connected and have a similar culture (meaning that it’s not difficult for someone from the UK to regularly visit the US). Nevertheless, if you are a UK investor, property management is still an important factor in real estate investing and can make or break your entire endeavor. 

Managing a property remotely can give rise to many issues, including:

• Tenants that don’t pay rent regularly
• Maintenance
• Emergency repairs
• Stay compliant with all the local laws that regulate property rentals

The role of property managers or property management agencies is to solve all of those issues for you, usually for a small fee taken as a percentage of rent. 

Currency Exchange Rates

Currency exchange rates can have a huge impact on the amount of money you’ll have available to purchase a US property as a UK citizen. At the time of writing this article, rates are favorable to UK citizens, but that doesn’t mean the situation will stay like that forever. So, before making a move on the US real estate market from the UK, make sure to consider the currency exchange rates and fluctuations between the economies of these two respective countries. If you do it right and choose the right time, you can end up making a lot of money. Conversely, if you make a mistake and start selling the UK pound for US dollars at the wrong time, you can end up having big losses.

Additionally, by buying US real estate, you’re actively investing in the US dollar. This will allow you to diversify your portfolio and not have all your assets tied up in a single currency (i.e., the British pound).

FAQ

Can I buy a house in America if I live in the UK?

Yes, you can. In the US, foreigners can easily purchase US property. There are no restrictions that prevent foreign nationals from owning real estate in the US.

Does buying property in the USA give residency to UK citizens?

Buying property in the US as a UK citizen does not grant permanent US residency. How long you can legally stay in the US will depend on the duration of your visa, and not on whether or not you own property in the States. Although, it’s important to note that owning US property can positively affect your Visa extension process, and can help you in gaining permanent residency (if you don’t already have one).