The electronic signature has gained importance in modern business transactions. The market is growing particularly in Great Britain: in 2022, the total revenue in the real estate sector was over 94 billion pounds, of which 15% was attributable to foreign investors. These investors often focus on London, where about 49% of all foreign real estate purchases are made. Investors from China, Russia and the Middle East increasingly own residential and commercial property in the United Kingdom. With the increasing demand, digital processes, such as electronic signatures, are indispensable to ensure efficient and legally secure business transactions.
Luxury shopping and exclusive property locations in the UK
Luxury shopping in the UK is concentrated in some of the country’s most prominent cities and neighbourhoods. London, Manchester and Edinburgh in particular offer shopping opportunities and exclusive property locations that attract wealthy buyers and investors from around the world.
In the heart of London is the famous West End, known for its upmarket shopping streets. Mayfair, one of London’s most exclusive neighbourhoods, is home to high-end boutiques and designer stores. Here you will find renowned luxury brands such as Burberry and Louis Vuitton, as well as bespoke tailors and jewellers on the famous Bond Street. Not far away is Knightsbridge, home of the world-famous department store Harrods, which is known for its unique shopping experience and exquisite selection of fashion, jewellery and accessories. Sloane Street, another prime shopping destination, is famous for its luxury designer boutiques such as Gucci and Prada.
Challenges for real estate agents: digitalisation and international purchases
The property market in the UK is changing, and the number of international buyers is growing steadily. Real estate agents are facing new challenges in meeting the demands of global customers. Overseas buyers in particular want a secure, yet speedy, contract process. This is where the electronic signature proves helpful, as it offers the possibility of concluding purchase contracts quickly and in a legally secure manner. The electronic signature legality is crucial in this context, as it guarantees that all transactions are both legally binding and transparent. This allows property buyers to digitally sign contracts from any location, a feature that proves especially beneficial for foreign investors.
The use of e-signatures increases efficiency by enabling documents to be transmitted instantly and digitally to buyers and sellers. This means that the contract can be processed in a matter of hours, whereas traditional methods often take days. Estate agents benefit by simplifying processes and increasing customer satisfaction.
Legal certainty and statutory requirements for electronic signatures
In the UK, the Electronic Communications Act 2002 established the legal framework for e-signature use, reinforced by the EU’s eIDAS regulation in 2016, which standardised e-signature validity across the EU.. A unique identification of the signatory is required for a legally binding signature. To this end, the platforms that offer e-signatures must comply with strict security standards.
The process of buying property for foreign investors
An example shows how a property purchase from overseas works. The potential buyer, for example from the US, first searches online for suitable properties. After deciding on a property, they contact the agent in the UK. All the necessary documents and draft contracts are sent to them digitally. The contract is signed using an electronic signature provided by the agent’s platform or an external provider.
After the buyer has signed electronically, the documents are forwarded in their original format to the UK tax authorities. Foreign buyers are required to pay stamp duty land tax, the amount of which is based on the purchase price of the property. Buyers outside the UK must also pay an additional fee of 2%.
As more businesses prioritise speed, security, and convenience, e-signatures are set to become an indispensable tool in real estate and beyond. By digitising contracts and meeting regulatory standards, e-signatures are shaping the future of business transactions, providing a streamlined, secure, and user-friendly process that benefits companies and clients alike.
