Why buy a house with a loan
When buying a home in the UK, a loan can bring multiple advantages:
Reduce the pressure on personal funds: loans can disperse large amounts of home purchase expenditure, reducing the burden of personal capital flow.
Protection of funds: the UK financial market is mature and stable, strict supervision, loan fund security is guaranteed.
Tax relief: the interest portion of the loan can partially reduce the personal income tax brought about by the rental income, saving tax expenditure.
Enhanced return on investment: By leveraging on the loan, investors can obtain a stable rental income and enjoy the potential of property appreciation.
Ease of loan conditions: The application conditions for UK home loans are relatively easy, only need to provide relevant supporting documents.
Reduce the pressure of foreign exchange: applying for a loan directly from a UK bank can avoid the pressure of preparing a large amount of pounds sterling in a short period of time.
In addition, the loan can also effectively avoid the risk of inflation, so that you can lower the cost of the loan in exchange for a higher value of the property.
Loan conditions and required information
1. Loan conditions
Age requirement: generally between 21 and 70 years old.
Type of property: Applicable to residential or commercial properties for self-occupation or investment purposes.
Down payment ratio: usually 10-25% of the total property price.
Proof of income: a stable source of income is required (usually RMB 80,000 or more per month from a stable salary), some banks require overseas income and overseas status.
Loan-to-value ratio: usually 20%-70% of the total property price.
2.Required Documents for Loan
Proof of identity: passport or valid identity document.
Proof of Income: Bank statement or income proof document for the last 6-12 months.
Proof of assets: e.g. other properties or deposits.
Statement of Loan Purpose: Indicate the purpose for which the property is being purchased (owner-occupier or investment).
Credit history in the country of tax residency (if any): those who already have an account or investment history in the UK have an added advantage.
3. Approval time and validity of loan application
It takes about 8-12 weeks from formal submission of documents to approval. The validity period of the loan offer is usually 6 months. The buyer needs to deliver the property within the validity period of the loan offer, or else they will have to re-apply for the loan after the loan offer expires.
4. Buy-To-Let Loan
Depending on the purpose of the property, the loan can be divided into owner-occupier and investment type. Investment loans, also known as ‘Buy-To-Let’, are a UK-specific investment concept aimed at people who buy property specifically for rental purposes. For investors, if they choose a specific bank, Buy-To-Let allows them to enjoy a stable rental income by letting out their property, and the rent from the purchased property can offset the repayment of the loan amount, thus enjoying the income from the property.
5. Investment Loan Repayment (Interest Only)
There is an ‘Interest only’ repayment option in the loan offer, i.e. interest only. Often owners who buy a property for investment purposes will favour this method of repayment, whereby the lender only needs to repay the interest every month for the duration of the loan, and then return the principal in one lump sum after the expiry of the loan. This equates to no repayment pressure for many investors who buy a property and then rent it out. At the same time, most banks can start early repayment in the second year, and there is no penalty interest.
Tips: choose ‘interest-only’ repayment period expires, some banks can accept applications to extend the life of the loan, but the bank will also re-evaluate the applicant's ability to decide to loan, for details, please consult the loan consultant of Lansha!
Loan application process
1. Find suitable banks and products, and submit preliminary information.
Before taking out a loan, please choose a suitable bank and product according to your own specific preferences and needs. For example, if you choose a low interest rate, then the loan ratio is usually low or if you prefer a high loan ratio, then the interest rate will be higher, and you may also consider whether the interest only repayment and so on. After you have made your choice you can submit your initial personal and property information to the bank.
2. Get the results of the initial review and letter of intent for the loan
After preparing the information and contacting the bank or loan consultant for an initial consultation, determine whether the loan is available and the amount of the loan, and get a letter of intent from the bank.
3. Submission of loan application, bank appraisal
Once the buyer has selected the house, he can formally submit the loan application to the bank. After the surveyor has inspected the house, he will issue a report, which will not only assess the quality of the house and other relevant information, but also give a corresponding valuation. This valuation is very important as it will directly determine the loan that the bank will give.
4.Signing the contract with the bank after the loan application is approved
After obtaining the home inspection report, the bank will give the buyer a loan amount based on the valuation of the report, combined with the buyer's financial situation. After the buyer selects a loan product, the bank will sign a mortgage contract with the buyer.
Future Lending Trends
Short-term (2025): Interest rates may remain high, but more flexible products, such as hybrid interest rate loans, may emerge in the loan market. Investors are advised to choose short-term fixed rate products.
Medium to long term (2026-2030): Interest rates will gradually return to neutral levels, creating a more favourable financing environment for long-term investors. It is recommended that medium- to long-term investors pay attention to interest rate dynamics and choose to lock in low-cost long-term fixed rates at the right time.
Interpretation of Specific Loan Cases
Here, we will show you Lansha's ability to deal with unexpected emergency loan events through a special real loan case.
Ms. M from Shanghai, purchased the project London Dock, delivery in March-April 2025, the customer in the middle of 2024, has begun to prepare to do the loan, our Lansha loan team in June to help the customer to do a good job of time planning and issued a loan programme, 1 preferred programme as well as 2 alternative contingency options.
From the very beginning of the assistance to open an account, the middle of the monthly data review, to the back of the data review. Everything went very smoothly, just when all the materials were ready and waiting to be submitted, HSBC closed the overseas buyer's loan, which made the customer very worried, afraid of not being able to catch up with the delivery of the house, and there was no way for him to pay the full amount.
Lansha's professional lending team promptly communicated with the client over the phone and immediately initiated a PLan B programme for the client, switching to CIMB Singapore and submitting the existing documents without the need for the client to start all over again, which left the client free of worries and impatience.
Throughout the process, Lansha accompanied Ms.M and assisted her in providing additional supporting documents required by the bank regarding the loan, and finally in January 2025, she successfully obtained the loan offer.
Buying a home loan in the UK is a complex but flexible process, and choosing an experienced loan assistant can save you time and energy.
Buy a property in the UK with a team of professionals who know the UK property market best｜ Lansha Group
Founded in 2014 and headquartered in Paddington, London, Lansha Group has become one of the top 100 seafarers in the industry in the past 10 years, providing one-stop services for international property. We have many years of professional experience in dealing with all aspects of the property market, from choosing a property to opening a home, loans, solicitors, tenancy management and second-hand property sales. We provide 24-hour real-time service to our global clients, assisting them in dealing with the cumbersome formalities of property purchase and home inspection, so that they can move into their homes or invest in them with peace of mind. If you are looking to invest in the UK, Lansha Group has a professional investment team to assist you in selecting the best properties, analysing the housing information and regional development, and making a comprehensive assessment to choose the ideal home. Visit Lansha Group's website now to view our selection of properties and choose your dream home!
If you have any questions about buying a property in the UK, please feel free to contact us directly.
