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Property Purchase Process in UK

2020-06-01

How difficult is the property purchase process in the UK?
There are no restrictions on foreign ownership.

Buying property

Buying property in UK can be summarized in 3 stages: the search and offer, conveyancing and the final touches.

1. Find a suitable property and make an offer, usually through your real estate agent. The offer does not legally bind you to buy, except in Scotland where offers ARE binding (neither is the seller legally bound at this stage – ‘gazumping’ or withdrawing from an agreement to buy or sell before the final contract has been signed is very common, except in Scotland).

2. After your offer has been accepted you may wish to arrange for a survey. A survey is strongly advised for early detection of potential problems. Generally there are two kinds of survey:

a building survey, which will cost you roughly £500 (€369) to £1,000 (€739)
a homebuyer’s report, which will be cheaper at about £300 (€222) to £500 (€369)

There are no set fees for surveys. Negotiate.

3. The legal transfer of the property (conveyancing) is the next stage. You will need a solicitor or a licensed conveyor for this. Again, there is no set fee scale so negotiate, and clarify whether VAT and/or disbursements is/are included in the upfront quotation. Conveyancing proceeds through an exchange of notes between the seller’s solicitor and your solicitor. A “draft contract” will be drawn up by the seller’s solicitor containing the price, information about the seller’s deeds of title, etc.

Your solicitor will check this and negotiate with the seller’s solicitor. Searches, enquiries and surveys undertaken on your behalf will include a Local Authority Search, to check that the property is not in the way of any project; a search at the Land Registry to check security of title. Other enquiries will check on things like mineral rights, flooding, pollution, etc. This part of the conveyancing process will take a minimum of two weeks, but it not unusually takes two or three months.

4. Once you and your solicitor are satisfied, you sign final contracts. This binds both parties legally - the sale must go through. At this point you hand over a non-refundable 10% deposit.

A transfer contract documenting the transfer of title will next be prepared and signed by both parties. A completion date will also be agreed upon. Between the contract signing and completion date, proper arrangements with the Land Registry office are made: stamp duty and other fees connected with registering are paid. Payments are now completed and the deeds are handed to you. The process is over, you are now a proud owner.

 

TRANSACTION COSTS

                                                                                                                                  Who Pays?

Stamp Duty                                                       1% - 7%                                          buyer

Legal Fees                                                         0.5% - 1%                                       buyer

Land Registry Fees                                            0.05%                                             buyer

Agent´s Fees                                                      2% - 3.5% (+ 17.5% VAT)             seller

Costs paid by buyer                                         1.55% - 8.05%

Costs paid by seller                                          2.35% - 4.11%

ROUNDTRIP TRANSACTION COSTS       3.90% - 12.26%

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