A Roadmap to Success: Buying a House in Scotland!

If you’re wondering about all the whys and wherefores, and the steps in buying a house in Scotland, read on to find out about:

• Estate purchases
•  Conveyancing
• Property viewing
• Mortgages
• Property purchase
• Deposits
• Land and Building Transaction Tax (LBTT)
• And much more!

Key takeaways

Homes are sold through ‘blind bidding’

Formal offers on a property are put forward by a solicitor

You need to commission a Home Report if selling your home

The Process of Buying a House in Scotland

When evaluating mortgage options and finding the best loans for your potential property, a mortgage broker will streamline the process. 

By working with one of our mortgage advisors, we’ll consider your financial situation, discuss your specific needs, and search for competitive mortgage products from lenders nationwide, including specialist lenders whose deals aren’t available on the high street. Simply provide us with some information, and we’ll handle the rest.

Instead of spending countless hours searching for the right mortgage deal for your dream home, let us take care of the hard work—one less thing for you to worry about!

We value transparency and clarity, which is why we’ve created this handy page to walk you through each step of the property buying process and outline the costs involved. Whether you’re a first-time buyer or looking for your next rental investment, you’ll find useful and straightforward information below.

Estate agents

Where it all begins; once you’ve seen the property you’re interested in, you’ll need to arrange for a viewing with the estate agent that is dealing with that property. Most of the time this is easy to ascertain simply by looking at the “for sale” sign on the property itself.

Property viewing

Arranged through an estate agent, when viewing a property an agent will probably accompany you around the home, talking to you about the various advantages of the property.

To get a well-rounded sense of the property, ask for the Home Report, and when viewing the property ask the estate agent:

•       Why is the owner selling?
•       How long have the owners lived here?
•       What’s the area like?
•       How long has the property been on the market?
•       Has there been any work done on the property?
•       Have the sellers found a property?
•       What is the council tax band?

All of this will, along with the Home Report will give you a better idea of the story around the sale of the house. It will also give you vital information that will help you arrive at a decision as quickly as possible.

When conducting a viewing, be observant of the state of the worktops in the kitchen and bathroom. Take note of any cracks in ceilings or brickwork, and be aware of the signs of mould or damp.

Also, don’t feel like you have to rush. Take your time, soak in the feel of the home and take as long as you need to explore the property; it may after all, be where you spend the next few years of your life.

H2: Property valuation –

There are a few essential factors that are considered when determining the value of a property.

•       Plot size
•       Age
•       Location
•       Condition
•       Room count

The local area will also be considered. Things like public transport links, local schools, noise and crime levels all come to bear before the value of a property is decided upon.

For older or larger properties, you can also get a Royal Institute of Chartered Surveyors (RICS) accredited red book valuation. RICS is the cream of the crop when it comes to surveying; the red book is a document that covers the strict professional standards they must adhere to so you will be sure that using a RICS surveyor gives you the very best standard when it comes to surveying.

Times when you might need to use a RICS surveyor:

•       During divorce proceedings
•       Disputed that need resolving through mediation or arbitration
•       Properties being sold by charities
•       Calculating probate
•       Rent reviews
•       Transferring of assets into an SIPP pension fund

The Home Report

When you find the home you’re interested in, request the Home Report from the solicitor, seller, or estate agent for the property. 

This document tells you everything you’ll need to know about the house. The report is in three parts:

• A single survey and valuation
• A property questionnaire 
• An energy report

Single survey and valuation:

A chartered surveyor will have carried out a visual inspection of the home. This will inform you about the condition of the property, any repairs needing to be done and the accessibility of the home itself.

Repairs will be stated as urgent if the surveyor believes there are any serious problems. This is a fantastic way to discover the amount of work that may need to be carried out at your new property before you decide to make a bid.

At this stage you can make enquiries about the cost of repairs and pull out without incurring any penalties for not wanting to go forward with the property purchase.

Title deeds and land registry

When you buy a property, ownership is registered with the land registry, confirming you legally own it. Title deeds, which document ownership history, are essential for proving your ownership. They also define your property’s boundaries, helping resolve any disputes over land.

Local authority searches

This is a vital part of the conveyancing process. If you’re buying a house with a mortgage (and we hope that you are), the lender will require a local authority search to be carried out. This search is carried out by the local council and is a way for the lender to be reassured of the property’s value in the context of its local area.

Usually requested by your solicitor after your offer has been accepted, this search includes information on:

Local land charges register search (LLC1)

•       Planning agreements and conditional planning permissions
•       If the property is located on a tree preservation area
•       If your new home has a listed building status
•       Any financial charges registered against your new property
•       Required improvement or renovation grants
•       If the property is in a conservation area
•       If the property is in a smoke control zone

There are also enquiries of the local authority (CON29)

These include:

•       Any proposals for new roads, traffic schemes or railroads near your new property
•       Upcoming planning decisions that could affect the property or surrounding area
•       Any environmental factors where the property is situated
•       The levels of Radon Gas
•       Risk of subsidence and any concerns with the infrastructure and energy use of the property

These searches take two to six weeks on average and will cost between £50 and £250 depending on the local authority. The length of time is due to human factors and can’t really be helped. It will depend entirely on the staff levels of your local authority and how busy they are; you can keep abreast of any developments during this time by keeping in contact with your solicitor.

Mortgages

We at The Mortgage Broker are the experts at finding you a mortgage. Getting the best mortgage deal, with the most favourable interest rates, manageable repayments and a desirable term.

There are many different types of mortgages you can get and as many lenders as you can shake a stick at. The best thing to do is employ the services of your friendly neighbourhood mortgage advisor at The Mortgage Broker Scotland.

Finding a good mortgage deal is a long and tiresome process, one that we are happy to take off of your hands. Discovering the right mortgage for you requires only a few pieces of information and then we can get to work.

The most common types of mortgage are:

 Loan to Value

Loan to Value (LTV) is a percentage showing the ratio of your mortgage to the property’s value. For example, if your home is worth £100k and you have an £80k mortgage with a £20k deposit, your LTV is 80%. A lower LTV makes you a more attractive borrower to lenders since a larger deposit means you need to borrow less and pose less risk.

Conveyancing

Conveyancing is the legal process of transferring ownership of a property between seller and buyer.

When an offer on a house has been accepted, your solicitor will then begin the conveyancing process. They will handle all of the contracts, offer legal advice if needed, carry out searches and transfer the money to pay for your new home.

The stages of the conveyancing process are as follows:

Home insurance

Home insurance isn’t legally required, but lenders typically insist on buildings insurance to protect their investment. While skipping insurance might seem like a way to save money, a disaster could end up costing you much more.

What are the different types of insurance and what do they cover?

Building insurance covers the cost of repairing damage to the structure of your home, including roofs, walls, floors, and permanent fixtures.

Contents insurance covers the cost of replacing damaged, destroyed, or stolen items, with varying levels of coverage based on the value of your belongings.

Life insurance pays a lump sum to your loved ones if you pass away during the policy term. You can add critical illness cover to protect against losing your home due to prolonged illness.

Income protection insurance provides replacement income if you’re unable to work due to illness or injury.

It’s advisable to arrange insurance before completion day, though you can apply at any time. Getting the right coverage is essential, and we can guide you in choosing the best options for you and your home.

Completion day

Completion day has arrived—the final step in buying your home! Ownership is officially transferred to you, and you collect the keys from the estate agent.

Here’s what happens on completion day:

• Your solicitor confirms all mortgage conditions are met and requests the funds.
• Payment details are finalised.
• The purchase money is transferred to the seller.
• Once the seller’s solicitor confirms receipt, the keys are released.
• You are notified and can move in.

You can exchange contracts and complete on the same day, though it’s not always necessary. While doing everything in one day speeds up the process, it can be stressful. Completion dates are usually set in advance, so you and the seller can choose what works best.

Buying a house in Scotland and renting it out

When buying a rental property as a second home, you have two main options: 

First, you can lease it long-term as a buy-to-let, generating steady income and investment growth. 

• Second, if you plan to use the property occasionally, consider offering it as a holiday let, which can bring in income when you’re not using it.

Before renting out your home, consult with a mortgage advisor to explore your options. Some lenders require a buy-to-let mortgage, especially if you plan to rent out the property. Keep in mind, setting up a holiday rental involves significant upfront costs and management efforts and additional licences may also be required before you let a holiday home or set up short term rental. 

You can manage it yourself or hire a holiday cottage firm, though this will reduce your profits. If frequent holiday rentals are your goal, a specific holiday rental mortgage might be the best fit, and we can guide you through that process.