How To Buy A House - Part 3
The UK System
I could not be a solicitor. It’s weird because my sister is one, so you’d have thought we might have similar preferences, but honestly, reading any legal jargon makes me want to scratch my own eyes out. I know they get paid well but in my opinion, no amount of money would be worth the pain of trying to understand that nonsense. All this to say, the legal side of buying a house is tedious and needlessly complicated.
Solicitors
As soon as your offer is accepted here in the UK, you will instruct a solicitor. You notify the estate agent and they put the two solicitors, yours and the sellers, in touch. Ideally, what will happen is the seller’s solicitor will send over a contract, and your solicitor will check it through and agree to the terms. Often, there is some back and forth as the terms are hammered out. Once everyone is agreed all parties will sign and then you have exchanged contracts. At this point, you will pay a 10% deposit. Part of the contract will be to agree on a date for completion. This is the day you will pay the rest of the money and get the keys to your shiny new house. Sounds simple right? It’s not.
The Land Registry Title
A lot of the to and froing between solicitors certainly in our case had to do with the property title. This is the deed held by the Land Registry that shows who actually owns what and where your boundaries are. Our house was owned by a trust and the names on the deed hadn’t been kept up to date as the trustees changed so that had to be sorted out. Then, there were restrictions on the title which means that there are certain agreements in place concerning the property. In our case, this was to do with the fact that the house is in the middle of a private estate and has private pipework running to it and a shared electricity supply that needs moving. Some of the restrictions needed to be removed and others added. The most ridiculous part is that all this information is written in the most unintelligible legalese I have ever come across. Seemingly designed so that no one can understand it. Maybe that’s the point?!
Stamp Duty Land Tax
Once you have all that sorted out there is Stamp Duty Land Tax to pay. (Tax you pay to the government for the joy of buying a house. It would make more sense to me to pay the tax when you sell it but don’t get me started!) Of course, how much you pay depends on how much you’re paying for the property. It’s free up to £250,000. After that, it’s tiered and you pay a percentage at each tier. There are online calculators to work it all out and it’s usually fairly straightforward. It can be complicated though if you apply for any of the reliefs. First, you have to understand whether you qualify for the relief which involves reading government websites designed to drive you bonkers and then you have to work out whether that relief will actually save you any money because the way they work them out is pretty mad as well. We also hired an advisor who wasn’t much help at all so don’t do that. In the end, we used our own judgement around multiple dwelling relief and went with that because the house has a completely separate annexe.
Exchange and Completion
Usually, your solicitor will draw down the mortgage funds from your bank a few days before completion and then transfer them to the seller on the day of completion. Because our purchase had gone on for so long we chose to exchange and complete on the same day. Usually, this doesn’t work as you need time to arrange removals and for everyone in the chain to be coordinated. As we are renting and will have an overlap anyway this didn’t matter so much. Also, because it had been so long since the mortgage was agreed upon and interest rates have gone up loads in the meantime I was nervous about losing the mortgage. The bank can legally pull your mortgage at any time before completion and if you’ve exchanged you can lose your deposit. I think in practice this is extremely rare and only happens in extreme circumstances but for us, it was just another worry that I didn’t need!
So, that’s it. Finally, all the contracts are signed, the money is paid and the keys are ours. It still doesn’t feel real to me. I don’t think I’ll think of it as our house for quite a long time. I think I’ve been so focused on the hurdles and hoops we’ve had to jump through to actually buy it I haven’t really had time to think about what happens next. Possibly, that’s a good thing as now I have so much to think and worry about it’s pretty overwhelming! But, one step at a time. We’ve bought a house and that’s worth celebrating!
