If you are thinking of buying a house in the UK, you might be wondering what the laws involved are and how they affect you. Buying a house is a major decision and it involves a lot of steps and costs.
In this blog post, our experienced conveyancing team will explain some of the key aspects of the legal process of buying a house in the UK and how we can help you with it. We keep it simple, honest and transparent here at Howells, ensuring you are kept in the loop at every stage of the process.
Starting the Process: Before You Instruct a Solicitor
Applying For a Mortgage
The first thing you need to do is to find out how much you can afford to spend on a property. Most buyers will need a mortgage, which is a loan from a bank or other lender that you pay back over time.
The amount of money you can borrow depends on your income, credit score, and other factors. You can use online calculators or speak to a mortgage broker or adviser to find out how much you can borrow and what kind of mortgage is best for you.
Starting Your Search for a Home
Once you have an idea of your budget, you can start looking for properties that suit your needs and preferences. You can use online portals, newspapers, or estate agents to find properties for sale.
Estate agents are professionals who help sellers to market their properties and negotiate with buyers. They can also help you arrange viewings, make offers, and deal with any issues that arise during the process.
However, keep in mind that estate agents work for the seller, not for you, so they may not always have your best interests at heart.
Finding a Property and Making an Offer
When you find a property that you like, you can make an offer to the seller through the estate agent.
The offer is not legally binding until contracts are exchanged, which means that either party can withdraw or change their mind until then. The seller may accept your offer, reject it, or make a counteroffer. You may also have to compete with other buyers who are interested in the same property.
The Initial Legal Stages: Starting the Legal Process When the Offer is Accepted
If your offer is accepted, you will need to appoint a solicitor or conveyancer to handle the legal paperwork of buying the house. Conveyancing is the legal process that includes carrying out searches, drawing up and checking contracts, dealing with the Land Registry, and paying any tax.
Once you have informed the solicitor you wish to use their service you will receive a ‘Letter of Engagement’ or ‘Confirmation of Terms of Business’. This should be promptly signed and returned so the conveyancing process can begin in earnest. Funds will be requested to cover initial expenditure such as the cost of the searches.
Your solicitor will write to the seller’s solicitor confirming their instruction and requesting the draft contract. This should arrive with a pack that includes information on the property’s title and the standard forms completed by the seller. If the property is leasehold, a copy of the lease will also be included.
From the outset of the buyer’ s conveyancing process, it is essential the solicitor knows whether you also wish to sell a property so the two transactions can be tied together.
You should inform your estate agent which solicitor you intend to use so they can send a ‘Memorandum of Sale’ to all the relevant parties together with a copy of the property particulars.
When buying residential property many people do so in joint names. The joint ownership decision is an important one. There are two ways you can jointly own a property:
Joint tenants – where both parties have an equal interest in the property. If one party dies the survivor automatically owns the property.
Tenants in common – you each own a specific share of the property. This can be bequeathed, by will, in the event of your death.
The Middle Stages: Conveyancing Process Prior to Contracting to Buy
The solicitor will examine the draft contract documents and, if necessary, raise enquiries with the seller’s solicitor. You will be required to go through the standard forms the seller has completed and let the solicitor know if the conveyancing process is as you expected.
If the property you are buying is leasehold your solicitor will send a standard ‘Managing Agents Questionnaire’ to the seller’s solicitors which will in turn be sent on to the relevant landlord, managing agents or residential association.
Mortgages and the Conveyancing Process
If you are taking out a mortgage your solicitor will receive a copy of the offer and work through the conditions.
The solicitor dealing with your conveyancing process will normally undertake legal work on behalf of your lender as well.
Other Things to Know
Searches are enquiries that your solicitor or conveyancer makes to various authorities and organisations to find out more information about the property, such as whether there are any planning permissions, environmental issues, or legal disputes affecting it.
Contracts are documents that set out the terms and conditions of the sale and purchase of the property. They include details such as the price, the completion date, and any fixtures and fittings that are included or excluded.
The Land Registry is the official body that records who owns which property in England and Wales. Your solicitor or conveyancer will register your ownership of the property with them after completion.
Tax is the amount of money that you have to pay to the government when you buy a property above a certain value. This tax is called stamp duty land tax (SDLT) in England and Northern Ireland, land transaction tax (LTT) in Wales, and land and buildings transaction tax (LBTT) in Scotland.
The Final Stages: Exchange of Contracts and Completion
Once answers to all the enquiries have been returned they will be examined by your solicitor and, if they are satisfactory, you will be invited in to sign the contract and any mortgage documents. You will need to make arrangements for the deposit to be transferred into your solicitor’s bank account so that it is cleared in time for an exchange.
Before exchange of contracts can take place your lender (if you have one) will require you to have a buildings insurance policy in place.
All the parties involved in the conveyancing process need to agree on a completion date.
From the point at which contracts are exchanged you are legally bound to buy. The seller is legally bound to sell. Should either party back out the other will be entitled to claim compensation for losses arising.
At the point contracts are exchanged solicitor handling the conveyancing process will send your deposit to the seller's solicitor. This acts as security for the seller in case you change your mind, or are unable to pay the balance and complete the purchase.
In that case, the seller can hang onto your deposit, and may take you to court if the deposit is not enough compensation for breaking the contract.
In the same way, if the seller exchanges contracts and then refuses to complete the sale, you can apply to the court for an order to force the seller to complete, or be reimbursed your deposit and sue the seller for compensation. It is rare for a sale not to complete once contracts have been exchanged within the conveyancing process.
Between Exchange and Completion
Your solicitor will draw up the transfer deed so the property can be registered in your name as quickly as possible after completion of the conveyancing process. Your solicitor will also carry out further searches of a technical nature.
During this period you should receive a statement from your solicitor showing your expenses and the final figure which needs to be cleared in the solicitor’s account before completion of the conveyancing process. If you are taking out a mortgage your solicitor will draw down the loan amount in time for completion.
On Completion
The final step of buying a house is completion. This is when you pay the remaining balance of the purchase price to the seller's solicitor or conveyancer, who then transfers the ownership of the property to you. You will also receive the keys to your new home and be able to move in.
Completion is normally set for around lunchtime on the specified day, although in practical terms completion takes place when the seller’s solicitor confirms they have received all the money due. When receipt of the funds is acknowledged the seller should drop the keys off to the estate agent ready for you to collect.
Your solicitor will arrange for the title deeds to be registered in your name, and if the property is leasehold, ensure your name is entered on to the lease. The transfer will also be stamped to officially approve the sale.
And the final stage of the buyer’s conveyancing process, if you have taken out a mortgage, the deeds are sent to your lender for safe keeping until you either sell the property or pay off the loan.
Our Multi-Award Winning Conveyancing Team is Ready to Help You
Buying a house in the UK can be a complex and stressful process, but it can also be rewarding and exciting. At Howells Solicitors, we have a market leading team of conveyancing experts who can guide you through every step of the way.
We have over 25 years of experience in helping people buy and sell properties across England and Wales. We offer competitive fees, transparent communication, and excellent customer service. Whether you are a first-time buyer or an experienced homeowner, we can help you achieve your dream home.
If you are interested in our conveyancing services or have any questions about buying a house in the UK, please contact us today for a free quote.
