The conveyancing team at Watermans has created this handy guide for property purchase of a home in Scotland. The guide includes a step-by-step guide to the property-buying process so that you can move forward with confidence.
The team also explains the differences between buying property in England and Scotland, and answers some of your commonly asked property questions!
Before you get started, it’s a good idea to understand the differences between buying a house in Scotland and England. There might be more than you think!
The main difference is the role of solicitors. In England, the buyer is expected to communicate with an estate agent or the seller themselves to make an offer on a property. Buyers in Scotland, however, work directly with solicitors throughout the buying process. Once the buyer has found their dream home, the solicitor can keep the buyer informed about any other potential buyers or closing dates while they navigate making an offer.
Next is closing dates. In some circumstances, the seller will set a deadline for buyers to send in their formal written offers through their solicitors. Closing dates are common in Scotland, so you might want to check to see if this will apply to you.
The next notable difference is the taxation involved, such as Land and Building Transaction Tax (LBTT) and Additional Dwelling Supplement (ADS). The variety of taxation involved will be discussed later on in our guide.
If you purchase a property in England, you might need to pay something called Stamp Duty Land Tax (SDLT). This varies depending on the price of the home, starting at 5% interest for properties costing between £250,000–£925,000.
In Scotland, this has been replaced with Land and Buildings Transaction Tax (LBTT). The idea is similar, but the threshold for paying tax is reduced. The rate of tax starts at 2% for purchases between £145,000–£250,000 and raises to 12% for properties over £750,000.
Also, you could be eligible for extra relief if you’re a first-time buyer. This means that the tax bracket for paying tax on your new property starts at £175,000 rather than £145,000!
On top of Land and Buildings Transaction Tax (LBTT), you may also be expected to pay an Additional Dwelling Supplement (ADS) of 4%. This is when you already own one property, so this might be your second home or a buy-to-let scheme.
Once you’re aware of the differences between buying a home in Scotland and England, you can finally get started with the fun part. It’s always exciting finding your future home! So whether you’re browsing properties online or going out and about to visit estate agents and their window displays, remember to enjoy the experience.
It’s always important to know how much money you have to spend when you’re buying a property. Setting yourself a realistic budget means that you can tailor your property search to suit your price range.
If you require a mortgage for your purchase, get your mortgage in principle agreed before you start your property search. A Mortgage in Principle is an estimation from a lender of how much you can borrow as a mortgage when buying a property. By knowing how much you can borrow, you will have a better understanding of what you can afford to spend. It also shows sellers that you are serious about buying, as you’ve already taken the first step.
At Watermans, we regularly work closely with mortgage brokers who can help find the best deal for you. As such, we can give brilliant recommendations on the brokers that can give you the highest quality service.
There are multiple other mortgages to choose from. Don’t worry though, your mortgage broker will be able to discuss all these options and find the best deal for you.
Once you have a mortgage, you’ll need to decide how you’d like to pay it off. A repayment mortgage includes any interest into your monthly payment plan, so you’re able to make the full payment gradually over a long period of time.
On the other hand, interest-only mortgage schemes mean that your monthly repayments will only cover the interest that you’re paying on the mortgage. Once the mortgage term is complete, you’ll need to pay the sum of the borrowed amount in full.
Islamic mortgages, otherwise known as Home Purchase Plans (HPP), are very different to traditional mortgages. If you applied for an Islamic mortgage, you wouldn’t be obliged to pay any interest on your loan. This isn’t available with every bank, though, so make sure you speak to your solicitor before going ahead with this idea.
There are multiple things to consider before applying for a mortgage in principle. Depending on your own circumstances, you might be eligible for certain relief schemes. Here are two to think about.
Mortgages can seem complicated, especially if you’re a first-time buyer. Once you’re in contact with a reliable solicitor, they’ll be able to explain the process in its simplest form. The good thing is you might be eligible for certain relief schemes, such as the LIFT Scheme. So, keep this in mind for later down the line!
If you work in the armed forces, there’s a separate mortgage scheme you might be able to benefit from. Servicepeople can borrow 50% of their salary (up to £25,000) to go towards their mortgage through the Forces Help to Buy scheme. This interest-free loan is available to buyers across the UK, including Scotland.
Everything starts and ends with your solicitor or conveyancer. Here at Watermans, our team of property purchase solicitors is trained to provide you with straightforward legal advice.
In Scottish law, your solicitor or conveyancer will be the first point of contact throughout the residential conveyancing process. To make sure you know where you stand from the beginning of your property-buying journey, speak to a solicitor before you begin.
Plus, having a solicitor in place to sort out the conveyancing on your new purchase shows a property seller that you are committed to purchasing. And you always want to make a good first impression!
Both solicitors and conveyancers are qualified to help you find your dream home. The only difference is a solicitor is a trained lawyer, whereas conveyancers are specifically trained in property law.
You’re not in this alone. Once you’ve found your dream home and have given the reins to your solicitor or conveyancer, it’s time to do some paperwork.
The first step is a mortgage valuation report. This gives your mortgage lender a chance to inspect your property, confirm its value, and come to an agreement on the mortgage amount. The mortgage lender will arrange this valuation.
When you find a property that you like, request its home report. Read this carefully, and if you are still interested, contact the estate agents to arrange a viewing.
Make sure that you ask your solicitor to note your interest in the property if you are thinking of making an offer. Noting interest means that your solicitor is informing the seller of your interest in being kept up to date with the status of the property, giving you the chance to make an offer on the house before they sell it to someone else.
If you think the property is the one for you, it’s time to ask your solicitor to make an offer on your behalf. There’s no doubt that this is one of the most exciting parts of the buying process, so enjoy the experience!
The type of mortgage you choose to make is unique to your situation. So make sure you have a discussion with your solicitor or conveyancer before going ahead with an offer.
An unconditional offer is the ideal outcome for your offer. This means that your mortgage has been approved without any ifs, ands, or buts. They will then send a formal letter to your solicitor or conveyancer confirming this.
On the other hand, you may be presented with a conditional offer. This just means that your lender wants more information regarding your situation before signing off on an unconditional offer. In this case, it’s important to have any documentation at the ready, whether that’s pay slips, your home valuation, or your home report, for when your offer is accepted. It’s a simple enough process with the correct
Once your offer on the property has been accepted, it’s time to make sure that the agreement is finalised. Your solicitor is responsible for starting the conveyancing process.
They will let you know when the missives have been concluded (that means the sale is legally binding).
The final step of the process is money, of course. Completion day is when all of the money is transferred between the agreed parties. Then you’ll get the keys to your new home and get ready to start the beginning of your new life as a homeowner.
Throughout the process, you probably won’t feel like the purchase is real until you’re physically holding the keys in your hand. Once you receive the keys and the money is exchanged, the journey really begins!
Once you have your keys, you can start thinking about packing, moving vans – and the all-important decoration of your new abode.
At Watermans, we understand what a big deal it is to be buying a property. It’s one of the biggest purchases you will ever make in your lifetime, so it’s understandable that you may feel just as nervous about it as you are excited. That’s where we come in to help.
We take the hassle out of the legal side of things, meaning that you can concentrate on finding your ideal home. We offer straightforward advice at every step in the process so that you know where you stand. To get a free quote and start your property purchase, call us on 0131 555 7055, or contact us using the contact form below.
Yes, you are able to pull out of a property purchase in Scotland before the final deal is struck. If you’re having second thoughts, your solicitor or conveyancer will be able to withdraw your offer officially.
There is no agreed amount of time to buy a house or a flat. The timeframe depends on a number of factors, including whether or not your mortgage is approved with an unconditional offer or not. To be safe, expect at least 12 weeks between the day you find a property and the day you hold the keys in your own two hands.
The deposit depends on the price of the property you want to buy. In general, lenders offer mortgages with an 85%, 90%, and 95% loan-to-value ratio (LTV). If you’re applying for an 85% LTV mortgage, you would need a deposit worth 15% of the total amount, and so on.
Everything we do at Watermans is about getting you the resolution you need and making that process straightforward. Start the process by sending us your details below or calling us on 0131 555 7055
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“My clients would describe me as being approachable, down to earth and easy to get on with. This allows me to build relationships with my clients and provide straightforward legal advice without all the jargon.”
Shawn Wood, Head of Conveyancing
