Home reports in Scotland
When you're buying a home in Scotland the seller will need to provide any potential buyers with a home report on their property. The only exceptions are new-builds and buildings that have recently been converted into residential properties.
The home report consists of a single survey, an energy report and a property questionnaire.
The single survey contains a valuation and an assessment of the property's condition (including the roof, external walls and plumbing). You may want to consider getting a more detailed building survey done if the property is older or of a non-standard construction.
The energy report will give the property an energy efficiency rating and assess its environmental impact by looking at carbon dioxide emissions.
Completed by the seller, the property questionnaire will contain details such as whether the property has ever flooded or been treated for wood rot, as well as useful pieces of information such as what the parking arrangements are and which council tax band the home falls into.
Making an offer on a Scottish property
Properties in Scotland are usually marketed and sold by solicitors, rather than estate agents. They are either advertised at a fixed price or for 'offers around' or 'offers over' a certain price.
When a property is advertised for 'offers around' or 'offers over', a closing date will be set and prospective purchasers will need to submit sealed bids before that date.
Your solicitor (see below) will work with you to prepare your offer and pass it on to the seller's solicitor on your behalf. As well as how much you're willing to pay for the property, your offer should include a proposed 'date of entry' - ie when you'll pay and get the keys - and other terms and conditions relating to the purchase.
Once the offers are in, the seller will then choose the offer they want to accept. If yours is the successful bid, you'll be legally bound by the terms of your offer from this point.
No money is paid at this stage unless it’s a new-build property, in which case a deposit may be required.
Conveyancing for buyers in Scotland
When buying a property in Scotland you'll need to instruct a solicitor very early on in the process. Your solicitor should:
- Explain the home report to you
- Check that any alterations have been made with the necessary planning permission
- Put together your offer with you
- Submit your offer to the seller's solicitor
- Draw up the contract
Agreeing the contract with the seller's solicitor is known as 'concluding the missives'.
On the date of entry that’s agreed in the contract, you'll pay the whole of the purchase price in exchange for the keys to the property. This point is known as 'settlement'.
Your solicitor will pay any LBTT that is due, register the change of ownership with the Registers of Scotland, and lodge title deeds with your mortgage lender (you'll get a copy too).
- For a more detailed guide to the process, see our separate guide to conveyancing for buyers in Scotland
Land and Buildings Transaction Tax
Land and Buildings Transaction Tax (LBTT) is the Scottish equivalent of stamp duty.
As a buyer, you have to pay LBTT when buying a property worth £145,000 or more.
In its Draft Budget for 2018-19, the Scottish government proposed raising the tax-free limit to £175,000 for first-time buyers. This change is unlikely to be introduced before June 2018.
- Use our LBTT calculator to work out how much you'll have to pay
Buying a tenement property
Technically speaking, a tenement is a building or part of a building containing two or more flats that are separated horizontally and designed to have separate ownership.
This includes houses converted into flats, high-rise blocks, and both traditional and modern buildings. Tenements can also be office blocks, although most are residential.
Joint ownership of a Scottish property
If you want to buy a home with someone else, you have two options: joint ownership or common property. It's worth talking to your solicitor about what will work best for your situation before making a decision.
If you've bought a house under joint ownership and one of you dies, your share will automatically pass to the other person without any conveyancing expense.
Joint owners can sell or give away their share during their lifetime, but they can’t give it away in a will.
If a home is owned as 'common property', the owners can sell or give away their share during their lifetime or in a will.
This can be problematic if, for example, a couple has bought the property and then splits up. Your solicitor should explain all the consequences of these clauses before you decide to use one.
How the Scottish property system differs from the rest of the UK
The property-buying process in Scotland is generally quicker and far less likely to fall through than it can be in the rest of the UK.
There are a number of reasons for this:
- Preparing a home report costs money, therefore it's more likely that the vendor is serious about selling
- The home report means that buyers are better informed about a property's condition and value at the point of making an offer, so there's less potential for them to back out later
- Buyers make 'unconditional' offers which are legally binding
- Gazumping - when another buyer makes a higher offer after yours has been accepted - is rare because properties are usually withdrawn from the market once a price has been agreed. Solicitors are also not allowed to continue to represent a seller if they choose to go with a different buyer, meaning they don't encourage the practice.
It will generally take four to eight weeks to buy a property in Scotland, while it's more likely to take eight to 12 weeks in England or Wales.