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UK Property: Sealing the Deal

Long-term expats may consider settling in the UK. Buying a house in the UK is often a key part of their new life. Our overview covers the essential aspects of buying property in the UK — from the local real estate market to a detailed account of the purchasing process.
Congrats! You have sealed the deal and can now move into your new UK home.

Making an Offer: Wait or Haggle?

When you make your offer, the purchase of your new home in the UK starts in earnest. The asking price is often meant to be a starting point for negotiations. You can save a good deal if you are good at haggling. As a rule of thumb, your first offer should be 5-10% below the actual asking price. However, negotiating is not always a good idea.

Depending on how urgently you need to buy, how many interested parties there are, and how popular real estate in the neighborhood is, the seller may have the upper hand. In prime locations, e.g. those with countless amenities and excellent childcare facilities, offering a lower price could set you at a disadvantage. On the other hand, if you have plenty of time to look for a house, you can afford to be patient and wait for a homeowner willing to negotiate.

Prove You Can Pay

When making an offer to buy, you should be able to prove your solvency. For this purpose, you should have any sort of financial statement showing that you can afford the property. A so-called “agreement in principle” from a mortgage lender is the most common kind of proof. This document emphasizes that, based on your financial background, you’ll be able to receive a specified sum as a loan. Without such proof, it will be almost impossible to get your offer accepted.

When you have had a positive response on your offer, it must be made again formally, and in writing. However, the official offer is still “subject to contract and to survey”. This means it isn’t yet legally binding — at least not in England and Wales. Also, try to get an exclusivity agreement on the offer, or insist that the seller pull the house off the market now. This is supposed to protect you from getting dropped like a hot potato if another buyer with a much better offer should come along.

Have the Property Surveyed: It’s In Your Best Interests

As the phrase “subject to contract and to survey” in the official offer implies, you need to have the property surveyed first. This is in the mortgage lender’s interest, as well as in your own.

The lender usually commissions a survey called basic valuation. It ensures that the property is actually worth the price you have agreed to pay. However, the basic valuation survey does not go into detail about the condition of the property, or its future repair and maintenance. Therefore, potential buyers should also look into purchasing a Homebuyer’s Report from a licensed surveyor. It rates the property in an easy-to-understand traffic light style: green for excellent condition, yellow for minor repairs required, red for major repairs ahead.

If you want to buy a historical home, though (i.e. a house older than 75 years), you should spare the money for an in-depth building survey. This can cost up to 1,000 GBP plus VAT, but if you purchase an old building, you’d better err on the side of caution.

The Legal Aspects of the Purchase

While the survey is under way, both parties (and/or their solicitors) will be exchanging contact details and the “conveyance” process begins. “Conveyance” is a technical term that refers to all the legal and administrative work associated with the transfer of property.

Theoretically speaking, you can take care of conveyance yourself – if you have a lot of spare time on your hands, plenty of patience for paperwork, and some experience with legal jargon. In practice, however, you’d better hire a solicitor or a licensed conveyancer to take care of it for you.

Conveyance: Stage 1

The conveyance process includes three distinct stages. At first, after exchanging details, the solicitors draw up and negotiate a draft contract. Your solicitor also runs exhaustive pre-contract enquiries, e.g. about planning constraints on the property, ongoing disputes with neighbors, and similar issues. Moreover, they’ll contact the local council for enquiries on construction work, road planning, etc., which might affect the property.

The solicitor will then send you the draft for the contract, as well as copies of the title deeds, the property information, and an inventory of the property’s content, fixtures, and fittings. When you and the seller have agreed upon a draft, a deadline for the completion date can be fixed. Now you have to put in a formal mortgage offer.

Conveyance: Stages 2 and 3

In stage two, contracts are signed and exchanged, and they are now legally binding. You have to hand over a non-refundable deposit on the purchase price, and the solicitors will arrange the transfer document and the paperwork for your mortgage.

On the day of completion, you get the keys for your new home. Now, in the final stage of conveyance, you pay the rest of the price, as well as Stamp Duty, the Land Registry fee, and the legal fees. Your solicitor wraps up the administrative details, and hands you the transfer document and the original title deeds. Congratulations! A new home in the UK is now all yours.

Scotland and Northern Ireland

As mentioned on the previous page, the conveyance process may work somewhat differently in Scotland and Northern Ireland. For instance, in Scottish property law, a contract becomes legally binding at an earlier stage. Therefore, do get in touch with a local solicitor from Scotland or Northern Ireland. They will offer you legal advice and guide you safely through this procedure.

 

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