Janice Napier of Thorntons looks at some of the differences between buying houses in England compared to Scotland.
Q My daughter is about to go to university in Durham, and my husband and I plan to buy her a flat to live in while she’s there. I have bought houses before in Scotland, but are there differences in the English purchase process I should know about?
A The property system in England does differ from the Scottish system, but your lawyer will be able to advise you of the process.
Some of the differences are more practical in nature.
Price negotiation
When you have bought a house in Scotland you have probably phoned your solicitor to say you’ve found a property you like and, asked them to note interest for you.
If you have not already agreed a price with the seller, you may have also asked your solicitor to negotiate the price for you and, once agreed, a formal offer would be issued by your solicitor to officially start the buying process.
However, in England the solicitors do not usually become involved in the buying process until the deal has been agreed.
Buyers usually therefore negotiate the price themselves with the estate agent and, once a deal is done, the estate agent notifies both solicitors.
The seller’s solicitor then issues the contract reflecting the terms agreed.
Negotiating the price yourself might sound daunting, particularly if you don’t know the area in which you are buying.
Sellers do not provide you with a home report south of the border, so you do not have that to guide you as to value.
However, England does not normally operate an ‘offers over’ pricing system like in Scotland. The price you see advertised is usually the top price the seller is likely to receive, so you at least have an idea of the maximum amount you can normally expect to pay to secure the property.
It is also worth noting that it is normal practice to pay 10% of the price as a deposit at the time of exchanging contracts, though sometimes 5% will be accepted.
Purchase outlays
When you have bought in Scotland before, the property searches that your solicitor needs to review as part of the purchase process are usually paid for by the seller.
In England that is not the case; all the searches are paid for by the buyer.
On the plus side, the registration costs to register the transfer deed are usually lower and if you are buying with a mortgage, unlike in Scotland, there is free registration of the bank’s security, if it is being registered at the same time as the transfer deed.
Leasehold properties
There are primarily two types of land ownership in England: freehold and leasehold.
Freehold is similar to the type of ownership most common in Scotland, ie outright ownership.
Leasehold ownership means that a landlord owns the property but you have a lease, commonly for a term of either 99 years, 125 years or indeed 999 years.
You have said that you are buying a flat and, almost always, ownership of a flat is leasehold ownership.
This means that when you buy a flat you pay a price for it just as you would if you bought a house.
However, as there is a lease in place, there has to be an annual rent. This does not usually exceed £200 per year.
When buying a flat you can also expect to pay a service charge every year.
The landlord (or a management company) is responsible for maintaining the structure of the building, insuring the building and often providing services such as cleaning and lighting the common parts of the building and maintaining any outside land that goes with the building, like parking areas.
Depending on the type of development, you could be looking at paying at least £2,000 each year.
When deciding to buy a flat you should ask the estate agent to give you an indication of these ongoing costs, as you will have to factor that in to the affordability for you.
* By Janice Napier, associate, qualified in Scots and English law, Thorntons. Thorntons is a trading name of Thorntons Law LLP.