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Home Buying Process in the UK

A
Property Viewings and Shortlisting
  • Initial offer subject to valuation
  • Mortgage Application
  • Valuation
B
Final offer and Acceptance
  • Solicitor Pack
  • SPV Setup
  • Bank Accounts & Deposits
C
Exchange of Contracts
  • Balance of Deposits
  • Exchange of monies between Solicitors
D
Completion
  • Balance of Payments
  • Exchange of monies between Solicitors
  • Land Registry

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The process of purchasing a home in the UK entails thoughtful actions and important choices. The appropriate direction can make this process easier and more fruitful. Each stage, from examining properties to finalising the acquisition, calls for meticulous attention to detail and experience. You may confidently negotiate the intricacies of the house-buying process by remaining informed, effectively interacting with specialists, and making well-informed decisions.

Understanding the steps involved in the complex process of discovering your ideal property and making well-informed choices is crucial. Each stage requires careful thought, from looking at properties and narrowing down alternatives to exchanging contracts and completing the purchase. Here is a thorough overview of the home buying process in the UK, so you can confidently move through each step and realise your ambition of becoming a homeowner or a landlord.

A

Property Viewings and Shortlisting

1
Initial offer subject to valuation
Ask Your Agent

Before you make an offer on a property, the following questions are some of the initial enquiries you should make – most of these would be written on the advert.

  • Property Type – Is it Freehold / Share of Freehold / Leasehold. If leasehold, what is the lease tenure?
  • Is it chain-free?
  • Features and the Floorplan.
  • Council Tax Band.
  • EPC Rating
  • Market Information on Property Valuation in the Area.
  • Nearby amenities including a train station, a school, and a grocery shop.
  • Recent renovations, if any, and planning permission thereof.
Schedule viewings and make an offer
  • Visits to the shortlisted properties must be scheduled.
  • Consider going at various times of the day to evaluate aspects like traffic and the vibe of the neighbourhood.
  • Examine the property's condition, interior layout, energy efficiency, and other crucial elements.
  • Consider if major repairs might be required.
  • If required, you must appoint a surveyor to carry out a full survey.
2
Mortgage Application

Once your offer is accepted, you can start the mortgage application procedure. Work with your preferred mortgage lender to gather the required paperwork and data. To determine whether you qualify for a loan, they will evaluate your financial condition. If we are your chosen partner in this adventure, we will work with you throughout the journey to ensure seamless completion.

3
Valuation

Lenders require a full property valuation as part of the mortgage application procedure. This verifies that the property's valuation matches the proposed loan amount. The valuation ensures the value of the property, protecting both you and the lender. Loan To Value offered is based on the valuation. If you are willing to pay a premium, that would not be considered in the LTV calculations. Lenders lend on market value or purchase price, whichever is lower.

B

Final offer and Acceptance

1
Solicitor's pack
Engaging Solicitors
  • A solicitor is required for the legal aspects of the property purchase. Additionally, the vendor will have appointed a solicitor on his side. Your solicitors will help you with the paperwork and legal procedures and ensure a smooth sale.
  • The vendor's solicitors will put together a bundle of paperwork with all the pertinent details concerning the property. This packet will contain pertinent information, legal documents, and property information forms. Your solicitors will examine the records, conduct a full title search, and deal with any legal issues.
  • It's crucial to stay in touch with your solicitors and the other parties involved as you move through these processes. Keep track of deadlines, quickly submit required paperwork, and respond to any questions that may come up. Your solicitors will be essential in organising the financial and legal sides of the deal, resulting in a successful and legally sound real estate transaction.
  • If you are working with Novyy, our solicitors will manage everything for you. We offer a completely hands-free and hassle-free experience to our clients.
Final offer
  • You'll be prepared to make a final offer to the seller once the property valuation is finished and any pending negotiations have been settled. The market value of the property should be reflected in this offer, taking into consideration the findings of the valuation and any additional pertinent information.
Acceptance
  • Your solicitors will receive a formal acceptance letter or a notification from the vendor's solicitors if your final offer is accepted. This critical stage serves as a sign of both parties' consenting to move forward with the deal. A contract is signed at this stage and a completion date is set, usually 30 to 45 days ahead. A holding deposit is made at this stage which is forfeited if the buyer fails to complete on the completion date.
2
SPV set up
  • An SPV is a distinct legal entity created only for the ownership and management of real estate. It may provide advantages for managing liabilities and tax planning. You can use Limited Companies or LLPs for such an SPV subject to the agreement of your lender. Most lenders are comfortable with UK Limited Companies.
  • If you choose to use an SPV to purchase real estate, you must first incorporate an entity. To do this, the company must be registered with the Companies House, Directors must be appointed, and all applicable legal and financial § requirements must be met. An accountant can help you do all of this for a fee. If you are working with Novyy, we manage this entire process at our end.
3
Bank accounts and deposits

You'll need to put up a deposit as soon as you and the vendor come to an agreement. This deposit is a promise to move forward with the purchase and is customarily 10% of the property's purchase price. It is held with the vendor's solicitors until completion.

C

Exchange of contracts

1
Balance of deposits

If the holding deposit paid was less than 10%, the balance of that deposit will be required at Exchange.

2
Exchange of monies between solicitors

Once your offer is accepted, you can start the mortgage application procedure. Work with your preferred mortgage lender to gather the required paperwork and data. To determine whether you qualify for a loan, they will evaluate your financial condition. If we are your chosen partner in this adventure, we will work with you throughout the journey to ensure seamless completion.


Contract Preparation
  • Once everyone is content with the terms and circumstances of the property sale, your solicitors will draft a contract of sale. The purchase price, completion date, and any additional conditions are all set forth in this legal agreement.
Signing and Exchange
  • You (or your solicitors) and the vendor (or their solicitors) will both sign the contract. Once both parties have signed and agreed to the terms of the contract, they exchange it. The contracts are then physically or electronically delivered between the solicitors. This is called "Exchange".
Binding Commitment
  • This vital and legally binding step in the procedure involves the exchange of contracts. Both sides are now committed to the deal, and backing out could result in costs or legal repercussions.
Exchange of Monies Between Solicitors
  • After the contracts are exchanged, solicitors on both sides will collaborate to complete the transaction's financial details. They will manage the exchange of money, the payment of fees, and any unpaid sums. The deposit you have paid will travel via the solicitors as explained above.
  • It takes tight coordination between you, your solicitors, the vendor's solicitors, and your mortgage lender to complete these processes properly. During this stage, it is essential to maintain open lines of communication, adhere to deadlines, and follow all legal requirements. You'll be almost ready for the last step - completing the transaction and taking ownership of your new property once the money exchange is complete.
D

Completion

1
Balance of Payments
Scheduled Completion Date
  • The completion date is the day that you officially become the owner of the property and may move into your new house. Typically, this date is decided upon and written into the contract during the contract exchange.
Final Payments
  • Prior to completion, your solicitors will determine the total amount still owed to the vendor. This includes any unpaid fees, legal costs, and taxes like SDLT in addition to the remaining purchase price.
Mortgage Completion
  • If you have a mortgage, your mortgage lender will transfer the money from your account to your solicitors' account. This sum is included in the money you're contributing towards the purchase.
2
Exchange of Monies between Solicitors
  • Financial Settlement: Solicitors on both sides collaborate to make sure that all financial matters are resolved properly. This entails ensuring that each payment, including the purchase price, fees, and taxes, have been considered.
  • Transfer of Ownership: The vendor's solicitors will certify that all responsibilities have been fulfilled once the money has been received and verified. They will then approve the handover of the keys and the ownership change.
3
Land registry
  • Registration of Title: Following completion, your solicitors will make arrangements for the ownership transfer to be recorded with the Land Registry. This vital step legally establishes you as the new owner of the property.
  • Title Deeds: Your ownership will be reflected in the Land Registry's records after they are updated. You'll get updated title deeds that demonstrate your rightful ownership of the property, as well as an official confirmation from the Land Registry.
  • Your solicitors will also see to it that the required amount of SDLT is paid to the government.
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