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Buying a house in Scotland in 2023 – what do you need to know?

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Although we try to make sure that our articles include information on finance and properties across the UK, inevitably we refer more often to the situation in England and Wales. To move away from this slightly, today we will describe to you buying a house in Scotland. We will cover both the regulations and the issue of mortgages, as well as prices.

Buying a house in Scotland in 2023 - what do you need to know?

Is buying a house in Scotland different from buying in England?

This article has been written for a reason – when buying a property in Scotland, there are very different rules to those in the rest of the UK. Both the making of offers, the duration of the whole procedure and the mortgage market situation are different, although attentive readers will easily find some common features. To give you a point of reference, we will redirect you to existing articles that describe the buying process in the UK. In this way you will gain a broader overview.

1. Prices are not publicly displayed

Unlike in England, buying a house in Scotland somewhat resembles an auction. So-called blind bidding involves the seller setting a minimum or proposed price, while buyers place their bids in sealed envelopes. On the day of the decision, all bids are opened and the person who proposes the highest amount wins and is informed immediately.

Source: Zoopla

2. Stamp duty land tax in Scotland

Although there is a land transaction tax across the UK, stamp duty land tax has not formally existed in Scotland since 2012. Instead, the Scottish Government has introduced Land & Buildings Transaction TAX (LBTT), which has involved changing the rates of this liability.

How much LBTT tax will you pay when buying a house in Scotland?

  • Property valued up to £145,000: 0%
  • Property valued between £145,001 and £250,000: 2%
  • Property with a value between £250,001 and £325,000: 5%
  • Property with a value between £325,001 and £750,000: 10%
  • Property with a value over £750,001: 12%

You can find the latest LBTT tax rates on the Scottish Government website.

If you have first-time buyer status, buying a home will incur a fee:

  • Property valued up to £175,000: 0%
  • Property with a value between £175,001 and £250,000: 2%
  • Property with a value between £250,001 and £325,000: 5%
  • Property with a value between £325,001 and £750,000: 10%
  • Property with a value above £750,001: 12%

As you can see, the differences only apply to the first group of properties – the cheapest ones.

3. Seller must have their home valued before selling

When selling a house in Scotland, the owner must order a Home Report, which means a valuation of their property before it is even advertised. This document includes the building’s Energy Performance Certificate and a very extensive questionnaire with lots of information about the property’s condition. The exception is newly built properties – these do not necessarily have to get a Home Report. You can read more about home surveys on the Zoopla website.

4. Offers are legally binding

Buying a house in Scotland, as is the case in other parts of the UK, is done with the involvement of solicitors. Unlike in England, instead of exchanging a single contract, solicitors exchange a series of letters that are formal in nature. Once all these documents have been handed over, the contract is legally binding – the existing owner must sell the property, otherwise the buyer can claim compensation. Of course, this applies to both parties and such a situation can be troublesome if, for example, the bank refuses you a mortgage. However, compensation is not usually claimed if the purchase is not possible due to the refusal of the application.

Buying a house in Scotland in 2023 - what do you need to know?

5. Buying a house in Scotland takes much less time than in other parts of the UK

Buying a house always takes time. While the average transaction for our clients in England takes over 3 months, in Scotland you will become a property owner in 8 or even 6 weeks (source: gocompare). This is due in part to the different way solicitors exchange documents.

6. Buying a house in Scotland is cheaper

Many of our clients ask about the cost of buying property in the UK and unfortunately, the answer is never clear. It all depends on the commission, or the cost of legal and financial services. However, we have arrived at some very interesting figures on the total expenses you have to reckon with when buying. For Scotland, the calculated average was £22,242, while for England it was £33,070.

7. Terms of sale are negotiable

Lawyers (solicitors) of both parties exchange a series of sealed letters, which are called missives. Through these, proposals for individual contract terms are communicated until both parties reach agreement. The whole process ends with the sending of a conclusive missive, a document containing the arrangements agreed to by both parties. From this point onwards, the offer is legally binding.

What do lawyers negotiate?

  • The date of removal
  • The price
  • Additional equipment for the property – for example, furniture
  • Conditions necessary for the transaction to take place – for example, the granting of a mortgage, the sale of the buyer’s previous property

You can find out more about this on the elpamsolicitors website.

8. The average transaction price in Scotland is lower than in England and the UK as a whole

The subject of property prices is a very sensitive one, as the amount you will come to pay really depends on a number of factors. Nonetheless, we can use the averages that are published every year in many places. According to Insider.co.uk, the average house price in Scotland is at £242,213, an increase of more than £23,000 on last year. Amounts are certainly not low, but do you know what it’s like in the rest of the UK?

The UK Statistics Authority has released its calculations for property prices across the country – the average house price in October 2022 was £296,000, an increase of £33,000 on the previous year. That’s not all though – the figures are for the UK as a whole, and in the case of England, an average of £316,000 had to be prepared to buy (transaction costs not included).

The difference is clear – that’s around £70,000. Of course, you can’t just go by statistics. You also have to bear in mind that England is home to, for example, London, which is the largest and most populous city in the UK, and thus, the local market is governed by slightly different laws. Nevertheless, buying a house in Scotland seems to be much more affordable.

9. Lending terms in Scotland may vary

Scotland is a separate country and therefore the local banking system works a little differently. First and foremost, mortgages are provided by other companies, although of course there are also banks that provide services throughout the UK- Santander, HSBC and Barclays, for example.

It is also worth noting that interest rates in Scotland tend to be very similar to those offered by banks in England, but may not be the same. This is due to different house prices, a different level of risk for the bank and the local labour market situation.

To find out about current Scottish bank offers, it is worth simply contacting our team – we will provide you with quotes from a range of financial institutions from across the country.

Buying a house in Scotland step by step:

Typically, buying a house in Scotland looks as follows:

  • Once you have decided on a particular property, hire a solicitor – (as a mortgage broker, we work with many law firms so we can help you find the right one)
  • Apply for access to the Home Report of the property you are interested in
  • Submit your interest in purchasing a property through a solicitor
  • Make a formal offer to purchase with information on a possible date of purchase
  • The seller’s solicitor will send a counter-offer or agree to an initial proposal
  • Use a mortgage adviser, such as Extend Finance, and apply for a mortgage with their help
  • The solicitors will exchange missives between themselves
  • Once accepted by both parties, the offer becomes binding for both parties
  • Solicitors finalise the deal and the money is sent on the day of the agreed move
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Our team is here to assist you. Contact us by completing the form below.

Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services and some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts
secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services are not regulated by the Financial Conduct Authority.

Extend Finance nor The Right Mortgage Limited can’t provide advice regarding Personal Pensions, Pension planning or investment planning advice. You must seek independent financial advice from a suitably qualified professional financial adviser who may charge you for advice.

Wills, Will writing, Trusts and Trust planning are not regulated by the Financial Conduct Authority.

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