What are the usual steps to buy a real estate property in the UK?

Buying a property in England & Wales is a very different process compared to the rest of Europe. It is regulated and a solicitor is required for the transaction.

Once an offer to purchase a property has been made by the buyer and accepted by the Seller (usually via a selling agent) then each party will instruct their own solicitor. You should not take up an offer from the selling agent to get a solicitor for you – this will increase the costs for you significantly. It is cheaper and better to choose and instruct your own solicitor.

The solicitors then prepare and analyse the property title deeds, searches, mortgage documentation and other legal matters.

Once the review process is complete then contracts can be exchanged. At this point the buyer is bound to a legal contract to purchase the property and pay for it on the agreed date.

Once the agreed date arrives the monies are paid for the property via the solicitors and the transfer documents completed and sent to the Land Registry for registration.

The whole process takes usually 6-10 weeks but it can be longer.

What legal checks should be done before buying a property?

England & Wales maintain an online property register for each property and this includes, mortgages, owners names and addresses and legal rights that the property benefits from or obligations it is subject to.

The buyer also needs to carry out searches with local authorities covering matters such as road maintenance, drainage, flooding and building alteration rights and permissions.

These need to be checked thoroughly by a solicitor. Purchasing a property in England and Wales is fully at the buyer’s risk and there is no compensation if you make a bad purchase.

Buying through a company.

The process is no different but there are higher taxes to pay when buying residential property in a company. If the company is registered outside of England and Wales then taxes are higher again.

Money laundering.

The law requires that the solicitors validate the identity of the buyer and proof of their funds in their own account. The source of the buyer’s wealth also has to be checked and approved, especially where the buyer is based abroad.

The rules on money laundering are European-wide and the UK will still have to follow them after Brexit but they are rigorously applied in the UK. The UK has one of the most regulated anti money laundering structures in the world due to the attractiveness of the UK property and financial markets to fraudulent investors.

What are the purchase costs and taxes?

The legal costs vary depending on the transaction and are based on many factors. A bespoke quote needs to be provided in every case. Costs can vary if the transaction is later found to contain unexpected elements or problems.

Stamp Duty Land Tax is payable on al purchases over 125,000. The rate varies depending on the Property, the Buyer, the Buyer’s personal circumstances and a bespoke tax calculation is carried out on each purchase.

Additional duty of 3% of the purchase price is payable if the Buyer already owns other property anywhere in the world or if the buyer is a company.

What documentation must the buyer have in place before buying a property?

 Documents are all prepared by the solicitors as part of the transaction process.

What precautions have to be taken regarding off-plan purchases?

They should be checked carefully by a solicitor before any money is paid to anyone, especially if they are investment purchases with guarantee rental schemes following completion. A significant number of these type of developments have proven to be fraudulent or contain significant defects which prevent them being resold or mortgaged.

We advise that only purchases from reputable residential developers. Any purchase off plan with the premises of investment returns should be treated with extreme caution.

Any deal where the seller offers a “legal pack” should be avoided. Using a developer appointed solicitor can lead to very costly future problems. They may not have your interests at heart – remember they rely on a developer for work.

Tips for clients looking to build their own property. 

You will need to buy the land, obtain planning permission and deal with finance and construction requirements.

You will need a professional team including an architect, solicitor, planning advisor and ideally a bank behind you.

Land is difficult to acquire in the UK and is expensive. There is no guarantee you will be allowed to build on the land you buy.

What minimum legal checks should be done when selling a property?

A solicitor needs to be instructed – choose your own, do not simply take the selling agent’s legal advisor as it will cost you more money.

Your solicitor will handle the paperwork with you. You will not be able to do it on your own.

Your solicitor will prepare the contract pack and send it to the Buyer’s Solicitor. The Buyer will carry out their own checks via their solicitor.

Selling costs and taxes.

The legal costs vary depending on the transaction and are based on many factors. A bespoke quote needs to be provided in every case. Costs can vary if the transaction is later found to contain unexpected elements or problems.

Capital Gains Tax may be applicable when you sell a property but you would need to discuss your personal circumstances with an accountant to deal with any taxation issues.