What you need to know about buying a home in Scotland
Buying a home can feel complicated, particularly if it’s your first time. There are estate agents, solicitors, mortgage lenders, surveyors and potentially mortgage advisers involved — often all working on different parts of the purchase at the same time.
Understanding who does what, and what happens next, can make the whole process much easier to follow.
Here’s a straightforward guide to the typical house purchase process in Scotland.
1. Work Out Your Budget
Before starting your property search, it’s useful to understand how much you have available for a deposit and the other costs associated with buying a home.
If a mortgage will be required, lenders will normally consider both affordability and the size of the deposit available.
Their assessment can include:
Income and employment
Regular expenditure and financial commitments
Existing loans, credit cards and other debts
Credit history
Number of financial dependants
The size and source of your deposit
The type and value of property being purchased
A mortgage lender may also carry out its own credit and affordability checks before agreeing to lend.
Who is involved?
You: Provide information about your finances and establish your available deposit and budget.
Mortgage lender: Assesses whether it is prepared to lend and how much, subject to its lending criteria.
Mortgage adviser, if used: Helps establish your requirements and researches suitable mortgage options.
2. Obtain an Agreement in Principle
An Agreement in Principle (AIP), sometimes called a Decision in Principle, is an indication from a mortgage lender of how much it may be prepared to lend based on the information provided.
It isn't a mortgage offer and doesn't guarantee that a mortgage application will ultimately be approved.
The lender will still need to assess the full application, supporting documentation and the property itself.
3. Find a Property
Once you have an idea of your budget, the search begins.
Most properties marketed for sale in Scotland must have a Home Report, which normally contains:
A Single Survey
An Energy Report
A Property Questionnaire
The Single Survey includes a valuation of the property and information about its condition.
One important point is that the Home Report valuation and the price you agree to pay aren't necessarily the same.
If you agree to pay more than the property's valuation, a mortgage lender will normally calculate its lending against the value it accepts rather than simply the price you have agreed with the seller.
4. Appoint a Solicitor and Make an Offer
In Scotland, your solicitor plays an important part from relatively early in the buying process.
If you are interested in a property, your solicitor can note your interest with the selling agent or solicitor.
If several buyers are interested, the seller may set a closing date by which offers must be submitted.
Your solicitor will normally submit the formal offer on your behalf.
Who is involved?
You: Decide how much you're prepared to offer.
Your solicitor: Advises on the legal aspects and submits the offer.
Seller: Decides whether to accept, reject or negotiate an offer.
Selling agent/solicitor: Manages the process on behalf of the seller.
5. Your Offer Is Accepted
Having an offer accepted is a major milestone, but it doesn't mean you own the property yet.
Your solicitor and the seller's solicitor will begin exchanging formal letters forming the contract for the purchase. This process is known as concluding missives.
At the same time, if you require a mortgage, the formal mortgage application will usually be progressing.
6. The Mortgage Application and Valuation
The mortgage lender will assess both you as the borrower and the property being offered as security for the mortgage.
The lender may request documents such as:
Payslips or evidence of income
Bank statements
Evidence of your deposit
Identification and proof of address
Details of existing credit commitments
Different requirements can apply to people who are self-employed or have more complex sources of income.
The lender will also need to be satisfied with the property's value and suitability for mortgage purposes.
The Home Report valuation may sometimes be sufficient, although the lender can request further information or an additional valuation where necessary.
7. The Mortgage Offer
If the lender is satisfied with its assessment of you and the property, it can issue a formal mortgage offer.
This confirms the terms on which the lender is prepared to provide the mortgage.
Your solicitor will also receive details of the mortgage and will deal with the lender's legal requirements as part of the purchase.
8. The Legal Work Continues
While the mortgage is being arranged, your solicitor carries out the legal work required for the purchase.
This can include:
Checking ownership of the property
Reviewing the title deeds
Checking searches and reports
Dealing with the seller's solicitor
Agreeing the terms of the missives
Preparing the documentation required for the transfer of ownership
Dealing with the mortgage lender's legal requirements
Calculating any Land and Buildings Transaction Tax (LBTT) due
Your solicitor will explain any legal issues identified during this process.
9. Arrange Buildings Insurance
This is an important step that can easily be overlooked amongst everything else that's happening.
If you're buying a house with a mortgage, the lender will normally require the property to have adequate buildings insurance in place from the date you become legally responsible for it, in accordance with the lender's requirements.
The relevant date can be earlier than buyers expect, particularly within the Scottish conveyancing process, so your solicitor should confirm when cover needs to begin.
Buildings insurance protects the physical structure of the property. It is different from contents insurance, which covers your belongings.
Your mortgage lender may require buildings insurance, but you don't normally have to purchase the policy from the mortgage lender itself.
10. Prepare for Settlement
As the agreed date of entry approaches, your solicitor will prepare for settlement.
You'll normally need to ensure that your solicitor has the money required from you to complete the purchase. This can include:
Your deposit or remaining purchase funds
LBTT, where applicable
Legal fees and other costs
Where a mortgage is involved, your solicitor will also arrange for the mortgage funds to be requested from the lender.
11. Settlement and Getting the Keys
On the agreed date of entry, the purchase reaches settlement.
Your solicitor transfers the required purchase funds to the seller's solicitor and deals with the legal documentation transferring ownership.
Once settlement has taken place, the keys can normally be released.
You now own your new home.
Your solicitor will then complete the remaining post-settlement work, including registering your ownership and the lender's security over the property with Registers of Scotland.
Who Does What?
The Buyer
Chooses the property, provides the deposit and required information, arranges funding and makes the key decisions throughout the purchase.
The Mortgage Adviser
Where one is used, the adviser assesses your mortgage requirements, researches mortgage options, helps with the application and communicates with the lender during the mortgage process.
The Mortgage Lender
Assesses the mortgage application, your ability to repay the borrowing and whether the property is acceptable as security for the loan.
Your Solicitor
Deals with the legal purchase, submits the offer, negotiates and concludes missives, checks the property's title, communicates with the lender and seller's solicitor, handles settlement and registers your ownership.
The Estate Agent or Selling Solicitor
Markets the property and manages the sale on behalf of the seller.
The Surveyor
Provides information about the condition and valuation of the property through the Home Report and/or any additional valuation or survey that may be required.
A Final Point
No two house purchases are exactly the same.
The timescale and steps involved can vary depending on the property, the buyer and seller, the mortgage lender and whether any legal, valuation or property issues arise along the way.
Knowing what each person is responsible for — and understanding why you're being asked for particular documents or information — can make the process considerably easier to navigate.
This article provides general information about the house purchase process in Scotland. It is not intended to constitute financial, mortgage or legal advice. Individual circumstances and lender requirements can vary.