Buying your first home is a huge milestone, and it can often feel daunting and a little overwhelming. There are lots of aspects that can be confusing, so understanding the home buying process can save you both time and stress. This guide to buying your first home in Scotland will help you navigate this exciting but challenging journey.
How do you work out what you can afford?
Before you start looking at property listings, it is essential to get your finances in order. To understand what property price you can afford, take a close look at your income, savings and any debts you may have. For first-time buyers in Scotland, there are two significant costs to consider: the price of the property and the additional costs of buying it, such as fees, taxes and insurance.
5% to 10%
the deposit you will typically need, depending on your lender
£175,000
first-time buyers pay no LBTT on the price up to this amount
Deposit
How much do you need?
Typically, you will need a deposit of between 5% and 10% of the property price. This depends on your lender and how much you have saved. The bigger the deposit you can pay upfront, the better the mortgage rate you may be able to get.
LBTT
First-time buyer relief
Land and Buildings Transaction Tax usually applies to purchases over £145,000. For first-time buyers, the threshold rises to £175,000, so you pay no LBTT on the first £175,000 of the price and only pay tax on anything above it. You can work out the LBTT on your purchase with our conveyancing calculator.
Other costs to budget for
- Solicitor’s fees and outlays.
- Buildings and contents insurance, in place for when the purchase settles.
- Furniture and decor once you have moved in.
- Removals, storage or van hire for the move.
- An extra allowance for anything unexpected that pops up.
Conveyancing calculator
How much will your purchase cost?
Our conveyancing calculator gives you an instant quote for our fixed conveyancing fee, along with the LBTT and Registers of Scotland fees on your purchase, with first-time buyer relief built in.
Why do you need a mortgage agreement in principle?
Once you know your budget, the next step is to get a mortgage agreement in principle. You can approach a lender directly, or you may prefer to speak to a mortgage adviser, who can help you plan your budget and speed things up once you have an offer accepted.
Why it matters
A mortgage agreement in principle comes from a lender. It is important to have one in place, because when you make an offer on a property, the seller’s solicitor will ask how you intend to fund the purchase. It also gives you a clearer picture of your budget.
What is a Home Report?
Most homes for sale in Scotland must have a Home Report, which the seller arranges before the property goes on the market. You can ask the selling agent for a copy, and it is worth reading before you offer, because it tells you a great deal about the property. A Home Report has three parts:
Part 1
Single survey
A surveyor’s view of the condition of the property, along with a valuation.
Part 2
Energy report
How energy efficient the home is, with recommendations for improvements.
Part 3
Property questionnaire
The seller’s answers on things such as the council tax band, alterations and parking.
Key point
Lenders often rely on the Home Report valuation when deciding how much to lend. If you offer well above the valuation, you may need a bigger deposit to make up the difference.
How do you make an offer on a property in Scotland?
Now comes the exciting part: viewing properties. Once you find one you like, you will need a solicitor to formally note interest or to submit a written offer on your behalf. It is never too early to speak to a solicitor when you are buying a property. Do not worry about fees, because you will usually be given a quote before any work is carried out.
Step 1
Your offer
Your solicitor sends a written offer to the seller’s solicitor, setting out the price, how long the offer is open and any conditions, such as a satisfactory survey.
Step 2
Qualified acceptance
The seller’s solicitor replies with a qualified acceptance, which may set out changes to your terms.
Step 3
Negotiation
Depending on what it says, you can accept the changes or respond with further negotiations, until both sides agree on the terms of sale.
Step 4
Missives concluded
Once missives are concluded, you have a legally binding contract to buy the property.
Do not be disheartened
It is unlikely that your first offer will be accepted, so do not be too disheartened if it is not. New properties come onto the market all the time.
What happens after missives are concluded?
Once missives are concluded, you will need to finalise your mortgage, and your solicitor will carry out the legal work on your behalf. Once the paperwork is complete and the funds have been transferred, you can collect the keys to your new home!
Speak to our conveyancing team
If you need our conveyancing team for buying or selling a property, contact our expert team on 0141 433 2626, or get an instant quote with our conveyancing calculator.
