Whether you’re already renting in Scotland and you want to become a homeowner, or you’re moving from elsewhere in the UK, it’s important to know that the house buying process is slightly different north of the border.
Let’s take a look in a little more detail with our quick guide to buying a house in Scotland.
In the rest of the UK, it’s a good idea to get a mortgage in principle (MIP). An MIP is an agreement that a mortgage lender would probably let you borrow a certain amount if you passed their credit checks.
In Scotland, you really shouldn’t start looking at properties without an MIP. Many estate agents won’t even arrange viewings if you don’t have one.
This isn’t because a Scottish MIP is somehow more binding than an English one. Instead, it’s because once you make an offer, the contract becomes legally binding much more quickly than elsewhere. If you make an offer but can’t get a mortgage, you could be in a tricky legal position.
So make a mortgage lender your first port of call, and set aside £100 – 250 to pay for this vital piece of paper.
Next, you’ll need a local Scottish solicitor in your corner.
There are dedicated estate agents in Scotland, but it’s more common to have a solicitor’s firm with an estate agency branch. The solicitor’s estate agents then form Solicitors’ Property Centres representing different regions (For example, SPC Fife & Kinross, or GSPC, for Glasgow). This system should let you browse a much wider selection of properties than you would see through a smaller estate agent.
One more thing to remember: in Scots law, you’re almost never allowed to use the same firm of solicitors as the seller, so it’s a good idea to clarify who’s representing who very early on.
In England, you’ll probably deal mainly with the seller’s estate agent, but don’t be surprised if you turn up to a Scottish property viewing to be shown around by the current owner.
Another one of the seller's responsibilities is organising the all-important Home Report, which includes all the information potential buyers need about the property.
The seller must provide the Home Report before you come for a viewing. It includes:
The most significant difference here is the RICS survey. If you’re buying in England, you would probably arrange your own surveyor, and your mortgage lender would likely carry out their own valuation survey. Both of these options are still on the table for you in Scotland, but the survey from the Home Report is binding, and many buyers and lenders don’t feel the need to do another survey (as long as the one in the Home Report is less than 12 weeks old).
If you like what you see, you now instruct your solicitor to send a “note of interest” to your seller’s solicitor. This is not a formal offer, but it means you’ll be kept in the loop and told the closing date for offers.
In Scotland, all the offers are collected and considered after the closing date, so you only have one chance to bid. How much you decide to offer will depend on the seller’s wishes:
Let’s assume the property you want is “offers over.” In this case, you’ll probably be bidding against other potential buyers by submitting your “best and final offer” through your solicitor before the closing date.
The legal document your solicitor will send includes your offer and the proposed date of entry (the day you could move in). Usually, the highest bid will win, but, in some cases, the seller may need to take the date of entry into account too.
Remember, in Scotland, the closing date is not just a deadline after which the seller reads the offers. It’s also a deadline for you to have all your finances in place so you can move forward with the purchase as soon as your offer is accepted.
This, by the way, is the main reason that chains are not that common in Scotland – you can’t make an offer unless you’re in the position to follow through, and you’re not in a position to follow through if all your new mortgage deposit is tied up in a house that you’re yet to sell.
It’s also why, if you’re selling a home in England or Wales to buy in Scotland, you might prefer to finish the selling process before you start the buying one.
If the seller likes your offer, you’ll (quickly!) move on to...
While you make your formal mortgage application and arrange the funds to pay your deposit, your solicitor will be busy with the legal side of things. You might also have to pay them a £500 – £1,000 holding deposit before this work begins and cover the costs of the property searches they’ll be doing for you.
The solicitor checks the contracts, scrutinises the council records in case there are any issues with the home that might affect its value or your insurance, and makes sure the property is legally the seller’s to sell.
Assuming everything’s in order, the next step is a series of formal letters known as the “exchange of missives.”
This process is usually fast compared to the rest of the UK. It can be over in a single day and doesn’t usually take longer than two weeks.
Now, your solicitor moves on to putting your name on the title deed (also known as the Title Burdens, detailing not only who owns the property but what their responsibilities are). Your solicitor draws up the Standard Security Deed, which concerns paying for the property. Their solicitor draws up the Disposition, which makes you the new legal owner. You might already know this process as conveyancing.
There are also some taxes to take care of at this point. Stamp Duty Land Tax doesn’t exist in Scotland, but there is a similar Land and Buildings Transaction Tax (LBTT), and you’ll have to sign documents relating to this even if your new property is worth less than £145,000 (the threshold for the first band of LBTT for a first property).
The Scottish date of entry is similar to the English completion day. After your solicitor pays your seller’s solicitor, they’ll “release the keys”, and you’ll be able to move into the property. Usually, this happens within weeks of your offer being accepted – as soon as everything with the conveyancing and mortgage arrangements is complete.
You’re then free to move in (and pay your solicitor any outstanding fees). Your solicitor has one more job: registering the change in the deeds with the Land Register in Edinburgh. But you might not even give that a second thought, as you’ll be too busy toasting your new Scottish home with a wee dram.
Ready to embark on your Scottish home buying adventure? Get started here with Habito.
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