What you need to know to open a UK bank account easily
When you’re a first-time overseas investor in UK property, the financial side of the equation can be worrying. I’m not talking about the potential of investing in UK property – tens of thousands of overseas property investors are making huge profits from UK property. It’s the nuts and bolts of the financial equation: how to collect rent, what taxes may have to be paid, and how to manage cash flow in the UK.
In previous articles, we’ve covered financial concerns such as:
- The UK property investment costs that foreign investors need to know
- How foreign investors finance a UK residential investment property
- Property tax for overseas investors
In this article, you’ll learn about opening a bank account in the UK and read about one investor’s experience.
Yes, you can open a UK bank account
There’s a common misconception that it is impossible to get a UK bank account if you don’t live in the UK. In fact, there is nothing in the law that stops UK banks accepting non-UK residents as bank account holders. However, most UK banks are terrified of being caught in fraud cases. They are also concerned about the higher costs of administering a non-resident bank account. Thus, only a handful of UK banks accept non-resident accounts (Lloyds, Barclays, and HSBC are the main ones).
Why do you need a UK bank account?
A UK bank account is essential for most overseas investors. It’s easier to accept rental payments and to make payments for property management and maintenance bills. It’s also easier to prove income and outgoings in dealings with the taxman. Also, when repatriating money to your home country, there will only be one exchange transaction to make, rather than every time you move cash in or out of your account.
What paperwork do you need to open a UK bank account?
The paperwork and other requirements of each bank are different, though there are some general requirements. Each bank has different requirements for deposits, for example. However, there are some standard requirements, too. Namely, you will need:
One Great Property Idea
How Property Investors with Little Time Can Invest in New Build and Off Plan Property using a Regeneration Strategy and Where Exactly to Invest in 2024.
THIS WEDNESDAY @
1230pm London GMT
1230pm GMT London
- Proof of identity (e.g. passport, birth certificate)
- Proof of residence (utility bill, rent book, mortgage statement)
- Anti-money laundering paperwork will need to be completed
Is it easy to open a UK bank account?
Many overseas investors open an account with the same institution with whom they bank in their home country. But if you are visiting the UK, the process to open a bank account here is relatively easy. Here’s the story of Asher and Sophia, a married Singaporean couple who opened a bank account in the UK to invest in property in 2017.
Checking on the paperwork needed
“We came to the UK in May, specifically to prepare for our first property investment here. One of the jobs on our list was to open a bank account, and before we left Singapore, I phoned the bank in the UK to ask about what paperwork we needed to bring with us. I was told that I needed utility bills from the last three months, or a credit card bill from a major provider. I was told this should be enough to confirm our address in Singapore. We also needed birth certificates or passports.
“In the end, I decided to err on the side of caution and brought more rather than less. I had with me bank statements, credit card statements, utility bills, birth certificates, and passports. Better to be safe than sorry, I thought.”
No-fuss bank account opening
“Armed with all the paperwork, we stepped into the London branch of Lloyds with whom we had been speaking, at the pre-arranged time. We sat with the banker we had agreed to meet. Weirdly, we still had to speak to another bank account rep on the phone to go through the process of opening the bank account. Having been through the application on the phone, the form was sent to us by email at the branch while we had a cup of tea.
“We signed the forms, and the bank made copies of all our documentation. And it was done!
“After about four days, I received a notification by email to confirm that our bank account had been opened and was ready for use. Our debit card was posted to us.”
I didn’t need a deposit to open the account, though I did need to tell the bank the reason for opening an account. There are fees to pay on the account, though not for the first three months. I had to deposit the minimum amount into the account to ensure it remained open, and I did this by electronic transfer from my bank in Singapore.”
“One tip I would give other investors is to make sure you tell your bank about the property manager you will use to administer your investment property and rental payments. This way they can clear payments faster, without having to validate for money laundering every time a rental payment is made.”
Worried about opening a bank account for property investment in the UK?
As Asher and Sophia’s story shows, there isn’t any reason to worry about opening a bank account in the UK for your property investment. But if you are concerned, aren’t planning to come to the UK, or simply want to discuss your options, get in touch with Gladfish on +44 207 923 6100. There isn’t a set of circumstances we haven’t helped with!
Live with passion