Buying property

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Finding the perfect property to live in whilst in the UK will be a top priority for most, not only will it become the place you call home it can also become a valuable investment. There are unique complexities to buying luxury residential property in England & Wales particularly as an overseas buyer – we provide an overview of the key issues along with some top tips.

Watch Residential Partner, Helen Marsh’s video to find out more:

Buying Property FAQs

For more details please visit our comprehensive residential property FAQs page.

What is the process of purchasing residential property?

The process of purchasing a residential property in England & Wales will take the following steps:

1. Deciding to buy

In the first instance, you must decide how to fund and structure your purchase, and in whose name to register the property. You must also ensure you have cash available to fund the deposit (usually 10% of the purchase price), which will be due on exchange of contracts.

2. Choosing a property

Once you have found a property you like, you will make an offer on your chosen property through the estate agent and, if accepted, the agent will circulate a memorandum of sale to the solicitors. The memorandum of sale sets out the property details and the terms of the offer (which are not legally binding until contracts are exchanged).

3. Investigating the Title to the property

Your solicitor will review all documentation sent by the seller’s solicitor, including the title to the property, the lease (if relevant), standard replies to enquiries and any other supporting documents. Your solicitor will also submit ‘searches’ to various public authorities including a local authority search, an environmental search, and a drainage and water search. At this stage of the process, it is also recommended that you instruct a surveyor to inspect the physical state of the property and check for any structural defects.

4. Exchange of contracts

If you are still happy to proceed, you will be asked to sign the contract, send the 10% deposit to your solicitor, and agree a completion date with the seller.

5. Completion

On the day of completion, your solicitor will send the completion funds to the seller’s solicitors and upon receipt, the seller will date the transfer and confirm completion has taken place. The keys will then be released by the agents and you will be the proud owner of your new property.

There are two types of property in England & Wales: freehold and leasehold.

  • Freehold properties are usually houses. The owner of a freehold property owns the property, the land it sits on and the space above it. While no ground rent or service charge is payable for a freehold property, the maintenance of the building is up to the owner.
  • Leasehold properties are generally flats. A leasehold property is held under a lease which is for a finite period of time and which details the terms of ownership. While the owner of the leasehold owns the flat, the landlord (freeholder) owns the land and building. Ground rent and service charge are usually collected by the landlord in order to pay for the maintenance of the building and land. Leases also generally restrict an owner’s ability to carry out works to, or sublease, the property.

The process of buying a property is predominantly the same irrespective of the property type, but the conveyancing process for leasehold transactions can carry an extra layer of complexity. Your conveyancer must review (amongst other things) the length of the lease (80 + years is preferable), any unfair ground rent or service charge provisions and any supplemental documents required to register you as the legal owner of the flat with the landlord.

You will need to check the covenants relating to alterations in your lease and ensure compliance with them.

Usually, leaseholders will be able to carry out internal non-structural alterations to their property but may require landlord’s consent to do this. If landlord’s consent is required, typically the landlord will not be able to unreasonably withhold consent. When making an application for consent, you will need to provide the landlord with details of the proposals (including drawings and plans, where relevant) and give the landlord a reasonable time to respond. You will also be reasonable for the landlord’s fees and other expenses properly incurred in connection with such an application. If consent is granted, this will be documented in a Licence to Alter, which both you and the landlord will be a party to.

For many, the idea of buying a property means “house hunting” for an established building, falling in love with it, placing an offer, perhaps doing a survey and some other legal checks, and then moving in. However, it is important to remember that other options exist for buyers, including off-plan purchases. Buying off-plan means entering into a contract to purchase a property before that property is built. The contract will specify details of the future property, including size, layout and finished look. Completion of the purchase is conditional upon the property built in accordance with those specifications, in line with the various building regulations and other legal requirements.

Having once been a simple tax to calculate, SDLT is now very complicated with various nuances. The amount of tax chargeable will depend on whether you own any other residential properties anywhere in the world, or are married or civil partnered to someone who does, whether you are replacing your main residence, whether you are a beneficiary under a property trust or holding on trust for a minor and whether you and whoever you might be buying with is deemed to be UK resident. Given how complex this can be do talk to us about this early on in the process.

Insights

Why is the UK such an attractive place for international buyers? There are a wide range of factors which include the stability of English Law, the advantageous time zone and the schooling system.

Watch Residential Partner, Charles Miéville’s video to find out more:

 

Read more of Charles’s insights as to why international buyers continue to seek UK homes despite UK economy concerns, in his article originally published in Abode2 magazine.

Read the article

 

Avoiding unwanted tax liabilities when buying a home in the UK

Head of Private Client, Xavier Nicholas shares his insights on the tax implications of acquiring a home in the UK, including inheritance tax (IHT) planning options.

Read the article

 

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Couples and families

It is important to understand your individual legal rights to property and any children you may have, in the unfortunate event of the relationship breaking down.

Read our feature