WITH spring now upon us, more people are thinking about moving home.
As the weather brightens up it’s the most popular time of year to buy and sell.
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And with England and Northern Ireland facing major changes to Stamp Duty thresholds from April 1, it’s the ideal time to get to grips with the nuances of Scottish property and what to consider when buying.
Scotland operates under a different system known as Land and Buildings Transaction Tax (LBTT), tailored to our unique market conditions.
Felipe Ferreira, Sales Director at Barratt Homes and David Wilson Homes North Scotland said: “The Scottish system differs from the rest of the UK in many ways, with distinct procedures and terminology.
“With Stamp Duty changes pending in England and Northern Ireland, we wanted to give homebuyers north of the border some recommendations on how to navigate the current Scottish market.
“So, we’ve leaned on the experts to provide valuable insight – whether you’re a first-time buyer or experienced seller.”
Barratt Homes has teamed up with Savills Estate Agents’ Head of Residential Research Faisal Choudhry to share ten tips to help when buying a property in Scotland.
GET YOUR HOUSE IN ORDER
Before you start your property search, ensure you have a clear understanding of your budget. Speak to a mortgage advisor to get pre-approved for a loan, giving you a competitive edge when making offers.
With the market heating up, desirable properties can be snapped up in days. Make sure you have all your documents in order and be ready to make swift decisions when you find the right property.
TAKE THE SURVEY
Despite the availability of a Home Report, which includes a Single Survey, Mortgage Valuation and Energy Performance Certificate, you may still wish to have an independent report on the property you are considering buying. What’s more, your lender may require one – so it’s always best to ask the question.
This can be a simple mortgage valuation report, a more detailed survey report or a comprehensive building survey.
PRICE IS RIGHT
Most properties in Scotland are marketed at ‘offers over’ a certain amount. This generally means that the seller is hoping to secure a sale price above the amount quoted – sometimes significantly over.
Be prepared to engage in competitive bidding, especially in more popular areas and during the current spring surge. New build properties are normally ‘fixed price’, making budgeting a bit more straightforward.
LBTT
Don’t forget to budget for this.
The charge is proportionate to the actual price of the property, and currently there is nothing to pay on the first £145,000 (with first time buyers exempt up to £175,000) but rises to 12 per cent for properties over £750,000.
You can check how much LBTT you’re going to have to pay at Savills at savills.co.uk
I’M INTERESTED
Registering a Note of Interest does not commit you to purchase a home, it merely indicates your desire to be updated on property developments, such as when offers are due.
Your solicitor might find out how many Notes of Interest exist for a property, but the specifics of offers will not be disclosed. Before submitting an offer, solicitors are required to conduct anti-money laundering checks on your behalf.
MAKE ME AN OFFER
In Scotland, only a solicitor can submit a formal offer for a property. This means verbal agreements are non-binding and ineffective. Your solicitor will prepare a formal document outlining price, date of entry, included items and standard legal terms.
It may include conditions and usually has a time limit for acceptance. It allows your solicitor to verify legal details, such as title deeds and relevant planning applications.
CASH IN ADVANCE
For more expensive properties a deposit, usually 10 per cent of the purchase price, may be required as an indication of your good intent. It is generally payable within 14 days of the contract being concluded and held on a joint account. The deposit may or may not be refundable if the sale does not proceed.
For new build properties, a deposit is required to reserve the property too.
CLOSING TIME
Unlike other parts of the UK, properties in Scotland may have a closing date for offers. This is a set date and time by which all interested parties must submit their best and final offers.
You’ll need to think caRefully and consult with your solicitor on what to bid.
It’s a nerve-wracking but efficient way to handle multiple bids and can lead to some properties selling well above the asking price.
GO AHEAD
If your offer is accepted, the seller’s solicitor will send a formal acceptance, possibly with qualifications. Your solicitor will discuss and negotiate these on your behalf. These could included timings or what is included in the sale.
The offer, acceptance and any related letters form the missives. When the final acceptance is issued, missives are concluded, creating a legally binding contract. Your solicitor will inform you when this happens.
SETTLE DOWN
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Settlement occurs on the contract’s specified entry date. The purchase price is paid to the seller’s solicitor in exchange for the disposition, title deeds, other documentation and property keys. Ensure your funding is in place to avoid interest charges until full payment.
Before settlement, your solicitor will prepare a State for Settlement detailing the purchase price and outlays, including Land and Buildings Transaction Tax.