Buying Your Home Guide
Buying property in the UK can be a complex and lengthy process, so it’s useful to educate yourself on the various stages involved.
In this buying your home guide, you’ll learn everything that you need to know, covering topics such as:
- The basics of buying your home
- Purchasing a property with another person
- Energy Performance Certificates
- Affordable Home Ownership Schemes
- Conveyancing processes
- Exchange of contracts
- Sale completion
- The tax implications of buying a property
- Stamp Duty Land Tax
The basics of buying your home
The process of buying a home normally takes approximately 2 to 3 months. However, if you are part of a property chain, it can take longer and be more complex.
Purchasing a property involves several steps and both sides will need the support of a conveyancing solicitor. If a seller is working with an estate agent, interested buyers will need to make their offers via the agent.
When a buyer’s offer is accepted, the seller must draw up a contract to legally transfer ownership of the property. Once the contracts have been exchanged, the offer becomes legally binding. The buyer may be required to pay tax, depending on the value of the property.
Purchasing a property with another person
Up to three people can purchase a property together. There are different routes to joint ownership, including:
Owning a property as joint tenants
This purchasing option means that all tenants own an equal share of the whole property. If one owner passes away, the living tenant(s) automatically inherits the property. As a joint tenant you cannot transfer your ownership as part of your Will.
Owning a property as tenants in common
Tenants in common have the option to own different shares of the home. The property will not automatically be transferred to the other owners if one owner passes away. If you would like to transfer your ownership as part of your Will, you have the right to do so.
Energy Performance Certificates
When a property is to be sold it must have an Energy Performance Certificate. Sellers are required to obtain an EPC for potential buyers before they advertise the property to rent or for sale.
An Energy Performance Certificate contains suggestions about lowering energy usage and information about the average energy costs and usage for a property.
An Energy Performance Certificate last for ten years and it offers an efficiency rating on a scale of A-G, (with A indicating the highest grade of energy efficiency).
In Scotland, the seller is required to present the certificate in the property (for instance displayed inside the meter cupboard).
Affordable Home Ownership Schemes
Affordable Home Ownership Schemes are financial assistance programs offered by the government. These schemes give financial help to individuals so that they can buy a property.
Under an Affordable Home Ownership Scheme, you could receive:
- A loan to assist you with the expense of a new-build property (providing that this is your first home and you are purchasing in England or Wales).
- Assistance to purchase a property through a shared ownership scheme in the UK.
Conveyancing refers to the process of transferring ownership from the seller to the buyer.
When the offer has been formally accepted, the individual selling the property must draw up a legal contract to support these processes.
The contract must include the following information:
- The boundaries of the property
- How much the seller has purchased the property for
- Any relevant rights or legal restrictions related to the property surroundings
- Any fittings and fixtures that are included in the sale
- Information about gas and drainage services
- Planning restrictions that may affect the property
- The sale completion date
Our property conveyancing solicitors at Stephen Rimmer can support buyers by reviewing the contract of sale, raising queries and negotiating the terms if appropriate.
For support with your conveyancing processes today, get in touch with our specialists at Stephen Rimmer.
Exchange of contracts
Once you and the seller are satisfied with the terms of the contract, both parties sign copies and send their signed copy to the other party. At this stage, the sale becomes legally binding, meaning that neither party has the option to change their mind (unless they agree to pay compensation).
After the contracts have been exchanged, the sale is completed, meaning that:
- The legal documents required to transfer ownership are given to the buyer
- The purchase price is transferred to the seller
- The individual who has sold the property moves out
- The seller gives the keys to the party who has purchased the property
- The sale is legally complete and the property is now owned by the buyer
The tax obligations of buying a property
When you buy a property in the UK, there are various tax obligations you’ll need to be aware of.
For example, you may be required to pay Stamp Duty Land Tax if you are purchasing a home in England. If you are purchasing a property in Wales, the equivalent is Land Transaction Tax.
Stamp Duty Land Tax
Whether or not you’re liable to pay Stamp Duty Land Tax depends on the property value and whether you are a first time buyer.
Please note: SDLT also applies if you trade another property or shares as a means of purchasing a new home.
Stamp Duty Land Tax rates (excluding first time buyers)
From 23 September 2022, anyone who is not a first time buyer will need to pay Stamp Duty Land Tax if the purchase price was over £250,000.
For properties over £250,000, the rates set out below will need to be paid on the portion of the purchase price that applies e.g. if the property cost £300,000, there will be no SDLT on the first £250,000 and 5% on the remaining £50,000, giving a Stamp Duty bill of £2,500.
The applicable rates are:
|Portion of purchase price||SDLT Rate|
|£250,000 or less||0%|
|£250,001 - £925,000||5%|
|£925,001 - £1.5 million||10%|
Stamp Duty Land Tax rates for first time buyers
First time buyers will not need to pay Stamp Duty on properties purchased for £425,000 or less. If the property costs between £425,001 and £625,000, first time buyers will pay 5% SDLT on the portion of the sale value above £425,000.
For properties that costs in excess of £625,000, there is no Stamp Duty relief for first time buyers, so they will need to pay the same rates as standard buyers.
Contact Stephen Rimmer property conveyancing solicitors
If you’re buying a property and need the support of a conveyancing solicitor, contact our experts at Stephen Rimmer.
How can we help you?
Call us today on 01323 644222 to get the specialist help you need.