Member Article

Buying or selling a home in the UK

1. Overview

Buying or selling a home normally takes 2 to 3 months. The process can take longer if you’re part of a chain of buyers and sellers.

There are several steps you will need to follow:

sellers must provide an Energy Performance Certificate for the property if a seller is using an estate agent, potential buyers must make any offers through the agent once a buyer’s offer has been accepted, the seller’s responsible for drawing up a legal contract to transfer ownership an offer isn’t legally binding until contracts are exchanged depending on the amount given for property, the buyer may have to pay Stamp Duty Land Tax

This guide relates to England and Wales. Shelter has advice about buying and selling a home in Scotland.

If you’re buying property with someone else You can own a home with up to 3 other people. Find out more about the different types of joint property ownership.

2. Energy Performance Certificates

Energy Performance Certificates (EPCs) are needed whenever a property is:

built sold rented

You must order an EPC for potential buyers and tenants before you market your property to sell or rent.

In Scotland, you must display the EPC somewhere in the property, eg in the meter cupboard or next to the boiler.

An EPC contains:

information about a property’s energy use and typical energy costs recommendations about how to reduce energy use and save money

An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years.

Check how you could make your home more energy efficient using the EPC adviser.

How to get an EPC

You will need to find an accredited assessor if you are selling or renting out your home in:

England, Wales and Northern Ireland Scotland

They will assess your property and produce the certificate.

You can be fined if you don’t get an EPC when you need one.

The person selling the house, the landlord or the letting agent must show you the EPC if you are buying or renting.

Buildings that don’t need an EPC

These include:

places of worship temporary buildings that will be used for less than 2 years stand-alone buildings with total useful floor space of less than 50 square metres industrial sites, workshops and non-residential agricultural buildings that don’t use a lot of energy some buildings that are due to be demolished holiday accommodation that’s rented out for less than 4 months a year or is let under a licence to occupy listed buildings – you should get advice from your local authority conservation officer if the work would alter the building’s character residential buildings intended to be used less than 4 months a year

See other properties’ EPCs

You can look at the EPCs of other properties free of charge. This lets you compare your home’s energy performance with that of similar homes. You can search by the property’s address or by the EPC’s report reference number.

You can opt out of the EPC register if you don’t want other people to be able to see your EPC.

3. Estate agents

You must sign a legally binding contract with an estate agent if you use one to sell your home.

You must stick to the terms of the contract or you could be taken to court.

Estate agents must also treat buyers fairly. They must show any offers promptly and in writing to the person selling the house.

Estate agents are also legally obliged to pass on any other offers for the property right up to when contracts are exchanged.

Complain about estate agents

All estate agents must belong to one of the following schemes to deal with complaints:

The Property Ombudsman The Ombudsman Service

You must complain to the estate agent and give them a fair chance to sort out the problem before you complain to either scheme.

4. Offers

A buyer must make an offer through the estate agent if a home is sold through one.

A buyer can make their offer directly to the seller for a private sale.

Buyers can make offers verbally (over the phone or in person) or in writing.

An offer isn’t legally binding in England and Wales until contracts are exchanged.

If a buyer makes an offer ‘subject to contract’, this means the price can still be negotiated (eg if a survey finds a problem with the property).

The law is different if you’re making an offer for property in Scotland.

5. Transferring ownership (conveyancing) Once the offer is accepted

The seller is responsible for drawing up a legal contract to transfer ownership. The contract contains details about:

the sale price the property boundaries which fixtures and fittings (like carpets and kitchen units) are included any legal restrictions or rights, like public footpaths or rules about using the property any planning restrictions services to the property, like drainage and gas when the sale will complete

If the seller has hired a solicitor or conveyancer, they will:

draft the initial contract answer questions from the buyer’s solicitor or conveyancer (with the seller’s help) negotiate the details of the contract if necessary

Exchanging contracts

When the buyer and seller are happy with the contract, both sides sign final copies and send them to each other.

The agreement to sell and buy is legally binding once this happens. Usually neither party can pull out without paying compensation.

Completion

Once you exchange contracts and deal with any remaining checks the buyer has asked for:

The money is transferred from the buyer to the seller. The legal documents needed to transfer ownership are handed over to the buyer. The seller moves out and leaves the property in the state agreed in the contract. The seller hands over the keys to the buyer. The property now belongs to the buyer.

6. Tax

You may need to pay:

Stamp Duty Land Tax when you buy a home Capital Gains Tax when you sell a home

Stamp Duty Land Tax

If you buy property for more than £125,000, you pay Stamp Duty Land Tax.

The rate you pay depends on the purchase price of the property.

You still have to pay if you swap something of economic value for a property, eg shares or another property.

Capital Gains Tax

You don’t pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:

you’ve lived in it as your main home for all the time you’ve owned it you haven’t let part of it out or used part of it for business only the grounds, including the buildings, are smaller than 5,000 square metres (just over an acre)

This is because you automatically get a tax relief called Private Residence Relief. You don’t need to do anything.

If you do not meet all these criteria you may have to pay some Capital Gains Tax.

This was posted in Bdaily's Members' News section by Joe Graham .