London property investment guide for Indian investors

Organise finances

India’s foreign exchange regulations allow several routes for acquiring overseas property; however, these decisions need to be arranged in advance to avoid any sort of delay with remittance. Key channels:

1. LRS lets investors remit up to USD 250,000 per person yearly. Families can pool up to USD 1 million for a joint purchase.

2. Under FEMA 6(4), NRIs can freely buy and hold property abroad without any sort of RBI approval.

3. Gift or inheritance lets buyers receive funds as a gift or inheritance within LRS limits.

4. RFC Account allows purchases to park money in a Resident Foreign Currency account; can directly fund overseas purchases.

5. Joint ownership is when you buy the property with a close relative (LRS rules apply).

6. Indian Company Route allows companies with overseas offices to purchase property abroad for business use.

Understand mortgage eligibility

Indian residents face FEMA restrictions when applying for a mortgage overseas, unless they get RBI approval. However, several exemptions apply. The interesting part is these restrictions do not apply to Indian residents who are also foreign nationals, individuals who owned international property before 8 July 1947 or properties held on leases of under five years. NRIs have it much simpler. They can purchase, hold and manage property abroad without any RBI intervention. If they held NRI status at the time of buying the overseas asset, they can keep it or sell it even after they move back to India.

Preparing documentation

Both Indian & UK regulations require clear verification of the buyer’s identity, address and source of funds before a transaction can proceed. A valid passport is mandatory; however, a UK visa is not required to buy a property. You will also need to submit a recent proof of address along with 3–6 months of bank statements from the account used for remittance. Present evidence of the source of funds: salary, business income, gifts, inheritance or sale of assets. Indian banks require Form A2 (Annexure 1) under the LRS. Lastly, certify all documents by a solicitor, notary or chartered accountant.

Shortlisting a property

Investors in London can choose from a variety of properties. This is why it’s important to define whether the purchase is for personal use or investment. Most families prioritise good schools, parks, amenities and strong transport links (typically outer yet well-connected London zones). On the other hand, investors prefer one or two-bedroom apartments for consistent rental demand and stronger yields. Location also plays a major role in the deciding process. Most older properties in London offer charm but may require maintenance and modern or off-plan developments often offer better capital growth.

Calculating your budget

Plan the complete budget from the start, as it will be more than the property price. Common costs are legal fees (£1,800–£4,000), annual service charges (from £3–£6 per sq ft) and ground rent (£200–£600) per year. Non-resident UK residents need to calculate Stamp Duty Land Tax payable on property value. Others costs are searches, insurance and due diligence, generally totalling £500–£700. While financing a purchase, more lenders can also charge around 1% as arrangement fees. Furnishing is an option cost; however, many overseas investors have opted for InStyle Direct to prepare their homes for rental quickly and efficiently.

Viewing & shortlisting

Once you have narrowed your options, you can view properties either in person or from your abode in India. If you are in London, our 20+ offices and a 200-member team can scheduled physical tours. We can also design a curated viewing schedule so you cover all your shortlisted homes in one visit. If you are in India, we can carry out virtual walkthroughts on Zoom or WhatsApp. These calls will be supported by videos, photos, floor plans and real-time discussions. Essentially, we will be providing you the same viewing experience without flying in.

Making an offer & reserving property

After selecting the property, the next steps depend on whether you have chosen a ready home or under construction. For completed or resale houses, you are typically required to make the full payment upon completion; so ensure you have your funds ready. For off-plan homes, you’ll need to pay a reservation fee to secure your unit. The contracts need to be exchanged within 28 days and 10% of the payment is to be done on exchange. As an investor, it’s ideal to follow the developer’s staged payment plan for the remaining amount. For off-plan properties, you benefit from locking in today’s price and can spread payments over the build period.

Appointing a solicitor

A UK-licensed solicitor handles your property transaction. Benham & Reeves works only with reputable, independent solicitors experienced in assisting Indian buyers. Your solicitor will verify your identity, source of funds, review contracts on your behalf, highlight any legal risks and carry out checks before the exchange. They will also coordinate with the developer or seller’s solicitor and ensure timelines are met. You’ll need proof of identity, address, bank statements, source-of-funds evidence and Form A2 for remittance.

Acceptance of the offer

After your offer is accepted, the purchase is formalised. You will first pay the reservation fee; after this, your solicitor will review all legal documents and conduct due diligence. Contracts are normally exchanged within 28 days of reservation. At this point, you are required to transfer the 10% deposit. For off-plan properties, the completion date will depend on the construction schedule. Ready homes usually complete much sooner. Once the timelines are confirmed and all documents are approved, both parties proceed toward exchange and completion.

Conveyancing process

Conveyancing is the legal foundation of your purchase. This step ensures the property is transferred to you without any complications. Your solicitor will commence reviewing the title deeds provided by the seller. They will raise inquiries about the building, service charges, planning permissions and any other obligations associated with the property. Local authority searches are carried out to check for any planning restrictions, nearby developments, drainage connections or environmental risk. This stage confirms that the home meets legal standards and that there are no hidden concerns. Once all the required responses are satisfactory, your solicitor will prepare the final contract for exchange.

Exchanging contracts

This is the step where the purchase becomes legally binding. Once contracts are exchanged, you and the seller are legally committed to the deal. This is usually done within 28 days after you reserve the property. At this stage, you’ll send your solicitor a deposit, 10-20% of the total purchase price. However, for off-plan developments, the deposit is divided into structured stages. After the exchange, the developer and seller are legally bound and committed to the completion date.

Snagging & inspection

A snagging inspection is conducted to check for any defects or unfinished work. You or your representative will inspect the property’s finishes, fittings and systems, including electrics, plumbing, flooring and joinery, before completion. Common snagging issues include minor paint issues, uneven finishes, loose hinges, faulty taps or misaligned doors. A snagging report is then submitted to the developer who ensures all issues are corrected before handover. This is an important step as it ensures the property is delivered to the required standard, protecting the buyer from any unexpected repair costs later.

Completion of purchase

Completion is the final and a pretty straightforward step in your property purchase journey. Your solicitor sends the remaining balance to the seller’s solicitor. Once all the funds are cleared, ownership is transferred to you. For off-plan homes, completion takes place once construction is completed and the building passes compliance checks. Your solicitor will also finalise the paperwork and confirm the transaction’s success.

Post-completion formalities

You’ll receive the keys to your property and legal confirmation of ownership. Your solicitor submits all documents to HM Land Registry and registers you as the official owner. This process takes a few weeks. You may also need to set up utilities, arrange insurance or prepare the property for rental. Benham & Reeves can help step in immediately for finishing, marketing and letting your new property in London. Our team ensures your property is generates income without any sort of delay.

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) must be paid within 14 days of completing your purchase. This tax is calculated based on your property’s value, with an additional surcharge for non-UK residents. Your solicitor will calculate and inform you of the exact amount, prepare the SDLT return and file it with HMRC on your behalf. Remember to factor this into your budget in advance, as delays can result in penalties. To estimate this liability, here’s Benham & Reeves Stamp Duty Calculator. This tool provides a quick, clear breakdown of expected tax charges.