Buying a property in the UAE. Advice for UK residents

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Holo Team

2023-07-21T08:09:28.068Z


Are you thinking about investing in property in the UAE as a UK resident? Dubai is an attractive place for UK investors to look at growing their property portfolio as Dubai real estate is thriving. It is possible to secure a home loan or mortgage as a UK resident. Here we give you all the essential information you'll need if you're considering buying from the UK.

UAE Mortgages for UK residents

Obtaining a mortgage in the UAE from the UK can be complicated. But it doesn't need to be. Equipping yourself with the right information will help manage your expectations about down payments, affordability, eligibility, and how long the process will take.

You'll need to have your paperwork in order. There are differences in the documentation you'll need depending on whether you are employed or self-employed. If you are employed you will need your passport and proof of income such as a salary certificate or employment contract and three months' worth of pay slips.

For those who are self-employed, you'll need to provide your company registration or ownership documents. You'll also need proof of residency in the UK and a good credit score. It may be a good idea to get a copy of your credit report from your bank.

Speaking with a mortgage advisor at Holo is free of charge. Check out our frequently asked home mortgage questions or use our mortgage calculator and one of our expert mortgage consultants will be in touch.

Will you need a deposit?

If you are looking to buy property in Dubai as a UK resident, you will need a deposit. Banks lend more cautiously with overseas buyers so the deposit will need to be more than if you were a Dubai resident. As a non-resident of Dubai, you will be able to borrow up to 60% of the property value. Some banks may lend more, but working with the assumption you can borrow 60% is the best assumption to follow

To work out how much you could borrow, use our mortgage calculator. In six quick steps, you can tell us you're a non-resident of Dubai and how much you plan to put down as a deposit. We'll use this information to search for the best mortgage deals from across our UAE banking network. You'll be shown the mortgage products that best meet your requirements as a UK buyer and be able to compare rates for mortgages in the UAE.

How do you find a property?

Before you start the application for finance, research property prices and areas in the UAE. Doing this before you start the mortgage process will help you manage your expectations about what you are likely to be able to afford and the size of the deposit you will need. You may wish to visit Dubai to do some of your research and explore some of the areas that are currently best to invest in

You could instruct a Real Estate agent but be aware that many agents prefer you to have your finance pre-approved so that they know you are a serious buyer.

What kind of property can you buy as a UK resident?

There are many types of property in the Dubai real estate market. You may wish to buy a house in Dubai such as a villa or townhouse type unit. You may prefer to consider a luxury apartment or a flat. Your requirements will likely differ based on whether you want to use it as a long-term rental investment, or as a short-term holiday type let.

To understand what types of property are best for your needs, do some research and look at how much apartments for rent in Dubai or villas typically lease for. Rents in Dubai differ across areas so researching the market will also help inform where you look for your Dubai house for sale.

What types of mortgage can you get as a UK resident?

You'll be able to choose from Fixed and Variable Rate mortgages and conventional or Islamic products.

  1. A fixed-rate mortgage in the UAE means that the rate of interest you pay stays the same for a set period, normally between 1-5 years. During this period your mortgage rate and your monthly repayment will not change.
  2. A variable rate mortgage means the interest you pay will vary over time. Variable rate mortgages in the UAE are linked to the EIBOR. The EIBOR is a benchmark interest rate for lending between banks in the UAE with a percentage fixed by the bank. Most banks will adjust this rate every three months. Some banks offer variable rate options on a monthly or six-month period but this is less common.
  3. With a conventional mortgage, the bank will lend you money to finance your new property much like what you might be familiar with in the UK. The mortgage consists of the loan for the amount you wish to borrow and an interest rate applied to the initial loan amount.
  4. An Islamic mortgage is a Sharia-compliant way of financing the purchase of a property. Under Sharia Law banks are not allowed to charge interest on a loan. Instead, the bank will technically buy the property for you and lease it back to you until the mortgage term is complete.

Should you consult a mortgage advisor?

Buying a property in Dubai is different from in the UK, and there are further differences between buying as a UK expat who lives in Dubai and a non-resident. Familiarising yourself with the process and fees involved is essential.

Working with a mortgage broker will help you get to grips with the process of securing property finance. This can add AED 5000 to the cost of buying a property in the UAE. At Holo we work on your behalf through the process from the minute you use our calculator, to the second the keys are in your hand. The best bit? We do not charge any fees at all.

Ready to take the next steps? Let's get you started.