How to Buy Property in the UK & Wales
Buying a property in England and Wales should be relatively straightforward however we understand that buying a property abroad can be a daunting process which is why Knight Frank has compiled this comprehensive guide to assist purchasers through the UK buying process whether it’s for luxury apartments and exclusive period houses or new builds, townhouses, country estates, cottages and farms.
Our guide does not seek to provide or replace legal advice, which you should obtain. We would always recommend that you instruct the services of a reputable agent, surveyor and solicitor. For further information on buying a property in the UK, contact one of our trusted advisors about the process.
The Legal Process of buying property in the United Kingdom
- Although freehold, leasehold and commonhold properties are completely different types of ownership, the steps required are similar. There are a few additional requirements for leasehold and commonhold properties.
- The buyer normally views the property through the estate agents and puts forward an offer.
- The seller, through the estate agent, may counter the offer triggering negotiations. Once a price is agreed a Memorandum of Sale is prepared by the estate agents.
- The buyer instructs a solicitor to act on his/her behalf to conclude the purchase of the property.
- The buyer’s solicitor will need to satisfy the requirements of the money laundering regulations. This generally takes the form of verifying the buyer’s identity and source of monies required to undertake the purchase.
- The buyer’s solicitor checks the title to the property and carries out the usual searches to provide essential information on the title, planning, environmental and other details relevant to the property and the area in which the property is located.
- Once the buyer’s solicitor is satisfied with the title to the property, he will liaise with the seller’s solicitor to confirm approval of the contract. The buyer’s solicitor arranges for the buyer to sign the contract and to provide the deposit, which is usually 10% of the agreed purchase price. The buyer’s solicitor checks that the buyer has secured insurance on the property. The risk usually passes to the buyer upon exchange of the contract.
- Until a contract is exchanged, either party can withdraw from the sale. The seller can accept other offers but cannot issue a contract to another party without first advising the buyer that another contract is to be issued. This is usually referred to as a ‘contract race’.
- Once the contract has been exchanged, both the seller and the buyer are contractually bound. If either party fails to complete on the agreed completion date then that party will be in breach of contract.
Property Tax in the United Kingdom
Stamp Duty Land Tax (SDLT) is payable on all property transactions, except where one of a small number of specified tax reliefs applies, within 30 days of completion. The rate of tax is dependent on the purchase price.
There is a variety of taxes that are affected by the buyer’s personal circumstances and these should be discussed with a tax expert.