Buying a home

This information applies to Scotland.

Buying a home can involve a lot of decisions. You’ll need to think about:

• what you can afford

• whether you need a mortgage

• what checks to make on a property

• how the legal process works.

If you have problems during the process, you can read about problems with buying and selling a home.

Work out how much you can afford

The first thing to do is work out how much you can afford to spend. You should make a budget using your income and spending. If you’re buying with someone else, make a joint budget using both your incomes and spending.

You should think about:

• mortgage payments - how much you can afford to pay each month

• other housing costs - for example council tax, service charges, insurance and repairs

• one-off buying costs - for example legal fees, surveys, tax and moving costs

• future changes - for example if interest rates rise or your income changes.

You can use the budget planner on the MoneyHelper website to help work out what you can afford.

Find out how much you can borrow

You might be able to borrow money to buy a home. This is called a mortgage.

A lender will usually ask for evidence of your income before deciding how much it might lend. If you’re employed, you might need to provide payslips or information from your employer. If you’re self-employed, you might need to provide accounts or tax information.

Some lenders can give you an agreement in principle. This is a document that says they might lend you a certain amount if the property is suitable and you pass their checks. It can help show a seller that you’re likely to have the money available.

You should only borrow what you can afford to pay back. If you do not keep up the agreed repayments, the lender can take possession of the property.

Extra costs to budget for

Before deciding how much to spend on a home, check that you can afford the extra costs of buying it.

One-off costs can include:

• survey or valuation fees - if you or your lender need a survey or valuation as well as the one in the Home Report

• specialist reports - for example if a survey suggests there might be problems with the property

• tax and registration costs - including Land and Buildings Transaction Tax and land registration fees

• mortgage costs - including lender fees, broker fees or a mortgage indemnity insurance premium

• legal costs - including solicitor’s fees, search fees, expenses and VAT

• moving costs - including removal costs, mail redirection and final bills from your current home.

You might still have to pay some costs if your offer is not accepted or the purchase falls through. For example, you might have to pay for a survey, valuation or legal work that has already been done.

You can ask your solicitor if they offer a no-purchase-no-charge arrangement. If they do, check exactly what you’ll have to pay if the purchase does not go ahead.

Land and Buildings Transaction Tax

Land and Buildings Transaction Tax (LBTT) is a tax on land and property transactions in Scotland. The amount of LBTT you'll pay depends on purchase price of the property.

Find out more about Land and Buildings Transaction Tax on the Revenue Scotland website.

If you're buying a second property, you might have to pay the Additional Dwelling Supplement (ADS). The ADS is an additional charge which is added to LBTT.

Find out more about the Additional Dwelling Supplement on the Revenue Scotland website.

Ongoing costs in a new property

You should also think about the running costs of the new property. These might be higher than your current costs, especially if you're moving to a larger home.

Ongoing costs can include:

• mortgage payments

• heating and energy bills

• council tax

• insurance - such as buildings insurance, contents insurance and life insurance

• service charges - for example factors fees, lifts, gardens or common areas.

• repairs and maintenance - including any shared responsibility for common repairs.

The Home Report for the property you’re buying will include some information which can help you work some of these costs.

First-time buyers

Buying a home for the first time can often be a daunting experience but there's lots of information to help you through the process.

You can get money tips in the first-time home buyer guide on the MoneyHelper website.

There's a guide to buying a house on the Which? website.

Deals on new-build homes

Some builders of new-build homes may offer a deal with extra costs covered, for example, Land and Buildings Transaction Tax and solicitor's fees or new furniture, as well as arranging the mortgage. You should get independent advice to check if the deal is financially worthwhile. A local conveyancing solicitor should be able to provide this advice. Although you are likely to have to pay for this extra advice it may protect you from a financial problem with the value of your home in the future.

You might also qualify for Help to Buy from the Scottish government.

Help to buy a home schemes

The Scottish government offers a number of schemes which may be able to help you buy a home if you cannot afford one.

Can I get help

The Scottish government currently offers support in buying a home to those in the following priority groups and who meet other eligibility criteria:

• first time buyer

• over 60 years old

• a social renter (someone who rents from the council or housing association)

• disabled

• in the armed forces

• a veteran, who has left the armed forces within the last 2 years

• a partner of armed forces personnel, where they lost their life whilst serving within the last 2 years.

What type of home can I buy

If you're eligible for help then you may be able to buy:

• a house for sale on the open market - more about the Open Market Shared Equity scheme on mygov.scot

• a new build house from a housing association or local council - more about the New Supply Shared Equity scheme on mygov.scot. This scheme may also be available to previous home owners if they've experienced a significant change in circumstances.

Will I own my home

The Scottish government will own some of the equity in your home as it has paid some of the cost of buying the property. It will hold a share in your home, like a mortgage. You will own your home but will have an agreement as to how you pay the Scottish government back.

How much do I have to pay

The amount you'll have to pay towards buying the home and how much the government will pay may vary depending on the scheme and other factors. 

You'll be responsible for paying all the ongoing costs for the property, such as:

• mortgage payments

• any service charge, for example towards the upkeep of the communal parts of a flatted development

• repairing, maintaining and insuring the property

• council tax

• heating, lighting and water charges.

You can find out more about the Help to Buy schemes on mygov.scot.  

What if my income is too low for these schemes

If your income is low and you cannot afford the shared equity schemes to help you buy a home, then the Shared Ownership scheme from the Scottish government may be able to help you. There's more about Shared Ownership on mygov.scot.

Forces Help to Buy

Throughout the UK, the Forces Help to Buy scheme allows service men and women to borrow up to 50% of their salary, interest free, to buy their first home or move to another property on assignment. The maximum loan is £25,000 and it can be used towards a deposit and other costs such as solicitor’s and estate agent’s fees. Find out more on the Forces Help to Buy scheme on GOV.UK.

Get legal help

The legal process of transferring ownership from the seller to the buyer is called conveyancing.

You'll usually need a solicitor or qualified conveyancer to complete this work. They can explain the process, protect your interests and make sure the legal documents and checks are completed correctly.

You can arrange some things yourself, such as your mortgage or insurance, but you'll not usually be able to:

• make a formal offer - this must usually be sent by your solicitor or qualified conveyancer

• prepare mortgage documents

• check the title deeds - this includes preparing the document that transfers ownership to you, called the disposition

• check official records - this includes checking for debts, restrictions or legal obligations attached to the property.

If you decide to do any tasks yourself and make a mistake, you might not be able to claim compensation from your solicitor or qualified conveyancer.

Choose a solicitor or qualified conveyancer

You should contact more than 1 solicitor or qualified conveyancer before choosing who to use. Ask friends or relatives for recommendations, and consider using someone with knowledge of the local housing market.

Before choosing someone, check:

• fees - whether the quote is fixed or depends on how much work is involved

• what’s included - whether the quote includes tax, searches, registration fees, expenses and VAT

• failed sale costs - what you’ll pay if the sale falls through

• local knowledge - whether they know the area where you want to buy

• lender panel - whether they’re on your mortgage lender’s approved conveyancing panel, if the lender uses one. If they're not, you might need another solicitor to carry out the lender's conveyancing work. This can add costs.

Some solicitors offer a no-purchase-no-charge arrangement. If your solicitor offers this, ask for the arrangement in writing. Check which charges and expenses you’ll still have to pay if the purchase does not go ahead.

You cannot use the same solicitor as the seller because the solicitor cannot act for both buyer and seller. Sometimes different solicitors from the same law firm will act for the buyer and seller. If you're worried about a conflict of interest, you should speak to your solicitor. If you're still worried, you might consider changing solicitor. This could mean paying for work already done and could slow down the purchase.

You can get lists of solicitors and qualified conveyancers from the Law Society of Scotland.

What the solicitor or conveyancer does

A solicitor or qualified conveyancer can:

• explain the process - discuss your needs and explain the procedure and costs

• deal with the offer - note your interest, draw up the formal offer and negotiate with the seller’s solicitor

• check the property - check title deeds, searches, legal ownership and local council records

• check permissions - for example if alterations had planning permission or building warrants

• deal with money - prepare mortgage documents, receive purchase money and pay it to the seller’s solicitor

• prepare documents - including the disposition that transfers ownership to you.

They can also help if there is a dispute before completion.

For information about problems with solicitors and conveyancers, see problems with buying and selling a home.

Mortgages

If you wish to buy a home you may be able to borrow money to do this. This is called a mortgage. Mortgages are available from:

• banks

• building societies

• financial institutions - for example lenders that offer mortgage products

• specialist mortgage companies - lenders that offer mortgages in more complex situations.

The loan is for a fixed period called a term and you'll pay interest on the loan.

Types of mortgages

There are different types of mortgage. Common types include:

• repayment mortgage – you gradually repay the amount borrowed, plus interest, over the mortgage term

• interest-only mortgage – you pay interest each month but do not repay the loan itself during the mortgage term. Yor usually pay into an investment or savings plan intended to repay the loan at the end. If it does not grow as planned, you could have a shortfall.

• Islamic mortgage – your monthly payments do not include interest, but the lender charges for lending the capital in another way.

You can read more about repayment mortgages and interest-only mortgages on the MoneyHelper website.

You can read more about Islamic mortgages on the MoneyHelper website.

Can you afford a mortgage

Lenders much check that you can afford a mortgage. They’ll ask for information and proof about your income, spending and regular outgoings. They’ll also consider whether you could afford repayments if interest rates rise or your income changes, for example because you start a family or retire. You can read more about what a lender will do to check if you can afford a mortgage on the Financial Conduct Authority's website.

You should only borrow what you can afford to pay back. If you do not keep up the agreed repayments, the lender can take possession of the property.

If you're not sure whether you can afford a mortgage, you might want to consult an independent financial adviser. Check how to choose a financial adviser on the MoneyHelper website.

Specialist mortgages

Some lenders offer mortgages for people who do not qualify for a standard mortgage. These are sometimes called sub-prime or adverse credit mortgages.

These mortgages are aimed at people who have had financial difficulties or credit problems. For example, you might have been declared bankrupt, had a previous home repossessed or have difficulty proving regular income.

Sub-prime or adverse credit mortgages might have higher interest rates than standard mortgages. Lenders might also limit how much they'll lend.

Get independent financial advice before taking out this type of mortgage. Check how to choose a financial adviser on the MoneyHelper website.

Buildings insurance

Most mortgages require the property to be insured. This means buildings insurance, not contents insurance. Buildings insurance usually needs to be in place from the date the offer is accepted. You can read more about buildings insurance on the MoneyHelper website.

Using a broker to get a mortgage

You can apply directly to a lender for a mortgage or you can use a broker. A broker might be an estate agent, mortgage broker or insurance broker.

A broker must tell you if they only recommend mortgages from particular lenders rather than the whole market.

A broker can save you time shopping around. A broker might be particularly useful if:

• you need to borrow a large amount

• the property is unusual - the lender might need more information

• more than 2 people want to buy jointly

• your income is irregular - for example if you’re self-employed

• you have a poor credit history

• you need advice - you’re unsure which mortgage is suitable.

You can read more about mortgage brokers on the MoneyHelper website.

Complain about a mortgage lender or broker

If you have a problem with a mortgage lender or broker, contact them first and ask them to fix the problem.

If the problem is not resolved, you can make a formal complaint using the lender’s or broker’s complaints procedure. You can also complain if you think they have discriminated against you.

If you are still dissatisfied after receiving their final response, you might be able to take your complaint to the Financial Ombudsman Service. Find out more about making a complaint on the Financial Ombudsman Service website.

How to find a property

You can find properties for sale by checking:

• property websites or apps

• estate agents or solicitors

• local newspapers

• house builders

• empty homes matchmaker schemes - find empty homes on the Scottish Empty Homes Partnership website.

When you find a property you're interested in, you should ask for a copy of the Home Report and arrange to view the property in person.

Viewing a property

When you're viewing a property in person, think about things like:

• its condition – whether repairs or decoration are needed

• noise

• alterations – any significant changes to the property

• what's included – for example, carpets, curtains, sheds and appliances.

It’s common to view a property 2 or 3 times before deciding whether to make an offer.

Check the property before you buy

Before you decide to buy a home, check its:

• condition

• energy efficiency

• flood risk

• legal paperwork.

These checks can help you identify problems, understand potential costs and decide whether the property is right for you.

Check the Home Report

Most homes marketed for sale in Scotland must have a Home Report. The seller is usually responsible for producing it, unless they have appointed an agent and transferred responsibility to them.

A Home Report has 3 parts:

• single survey - a surveyor’s report on the condition of the property, its value and accessibility

• energy report - information about energy use, carbon dioxide emissions, recommended improvements and possible savings

• property questionnaire - information from the seller about the property, such as council tax, parking, services, notices, common parts, factoring, alterations and guarantees.

The surveyor who prepares the single survey has a legal responsibility to provide accurate information to both the seller and the buyer.

The Home Report should be prepared before marketing starts. If a property has been off the market for no more than 28 days, the seller does not have to update the Home Report documents.

A Home Report must be provided to a potential buyer within 9 days of the seller receiving the request and any payment due.

You can read more about the Home Report on mygov.scot.

If a Home Report is not needed

A Home Report is generally needed when a home is marketed for sale. It might not be needed where a property is sold privately and has not been marketed.

Some types of property might not need a Home Report, including:

• new homes - if they have not been occupied before and are marketed for the first time

• recently converted homes - if the property has recently been converted into a house

• commercial-style sales - for example a portfolio of residential properties sold as a commercial sale

• seasonal accommodation - if it’s restricted by planning conditions.

Check the Energy Performance Certificate

When you buy a property, you should get an Energy Performance Certificate free of charge.

If the property needs a Home Report, the Energy Performance Certificate is included in the energy report. Property adverts must include Energy Performance Certificate information.

An Energy Performance Certificate gives information about:

• energy efficiency - the property’s current energy rating

• energy use - how much energy the property is likely to use

• carbon emissions - the property’s carbon dioxide emissions

• recommended improvements - changes that could make the property more energy efficient.

There is no obligation to make the recommended improvements.

An Energy Performance Certificate is valid for 10 years. If the seller fails to provide one, or does not include the rating when advertising the building, they could face a penalty charge notice of at least £500. You can read more about Energy Performance Certificates on the Energy Savings Trust website.

The Energy Performance Certificate and recommendations report must include details of any Green Deal plan attached to the property. This is because the new owner will have to take over repayments for any existing Green Deal loan. You can find out more about Green Deal at Green Deal funding for energy efficient home improvements.

Check alterations and repairs

Check whether the property has been modernised or altered. If it has, your solicitor or qualified conveyancer should check whether the work has any planning permission, building warrants or completion certificates that were needed.

A completion certificate shows that work was carried out in line with building warrants. It does not guarantee the structural quality or standard of workmanship.

You or your solicitor should ask the seller about major repairs. If the property is a flat, ask how repairs are shared between owners and whether there are any outstanding statutory repair notices.

Check flood risk

Ask your solicitor to investigate whether the property is in a high flood risk area or has been flooded in the past. A history of flooding can increase insurance premiums or make it difficult to get insurance. You can read more about  problems getting insurance.

The Scottish Environment Protection Agency (SEPA) has flood maps that show community-level flood risk in Scotland. You can find flood maps on the SEPA website.

SEPA's flood maps cannot be relied on to establish flood risk for an individual property. You could find out more about flood risk to the property you're buying by speaking to neighbours and contacting the local council.

Getting further property checks

If the property has a Home Report, you'll get the single survey as part of it. The single survey is based on a visual inspection by a chartered surveyor.

You might want to get further advice or an additional inspection if:

• the single survey identifies repairs or issues needing further investigation

• you're concerned about the property's condition

• your mortgage lender requires its own valuation or assessment. Check with your lender whether this is needed and whether you'll have to pay for it.

You can consider getting advice from a qualified surveyor, builder or specialist contractor - for example, to estimate the cost of repairs.

Check new-build warranties

If the property is newly built, check whether it has a Buildmark warranty from the National House-Building Council.

The Buildmark scheme can property your money if the builder goes bankrupt after contracts have been exchanged but before completion. It can also cover defects that arise because the builder has not followed National House-Building Council standards. You can read more about the Buildmark scheme on the National House-Building Council website.

If you buy a new or newly converted home, make sure a full new-home warranty will be in place before completion. If you have problems with a new-build property during the warranty period, you might be able to get help from the:

• National House-Building Council - or another warranty provider

• New Homes Ombudsman Service

• Consumer Code for Home Builders – a voluntary code which applies to some builders.

You can read more about the Consumer Code for Home Builders on their website.

If you want to take further action about problems with a new-build property, you should consider getting legal advice from a solicitor.

Making an offer

If you decide to make an offer, it should include:

• a brief description of the home

• the price you want to pay

• the date you want to collect the keys and move in

• any items you want to buy from the seller

• any other conditions you have - for example, you might want a second survey.

Your offer must be sent as a letter from your solicitor.

Fixed price properties

If a property is advertised at a fixed price, the seller is willing to accept the first firm offer at that price.

You do not have to offer the fixed price if the survey shows that repairs are needed or the property has been on the market for a long time. It might be possible to negotiate a lower price.

Offers over properties

If a property is advertised as offers over, the price shown is the minimum the seller is willing to accept.

If you want to make an offer, your solicitor or conveyancer should tell the seller’s solicitor or conveyancer. This is called noting interest.

The seller will usually wait until several people have expressed interest, then set a closing date. Sealed offers are submitted by the closing date and the seller chooses which offer to accept. The seller does not have to accept the highest offer.

If you were told you'd definitely get a chance to make an offer, that should happen.

If you make an early offer before a closing date, consider putting a time limit on it. If you do not, the seller could use your offer to bargain with other prospective buyers.

Acceptance and missives

If you make an unconditional offer for a fixed price property, the seller will usually accept or reject it straight. For an offers over property, they’ll usually accept or reject it on or soon after the closing date.

An acceptance might be unconditional. This can create a binding contract immediately.

Usually, the acceptance includes conditions. There is no binding contract until all conditions have been accepted by your solicitor or qualified conveyancer. This is called concluding missives.

After missives have been concluded, your solicitor or qualified conveyancer completes the conveyancing and prepares the documents. This includes the disposition that transfers ownership to you.

Completion and entry date

The missives specify the date of entry. This is the date when you pay the purchase price in return for the disposition and keys.

Your solicitor or qualified conveyancer will arrange to settle the sale on the date of entry.

If you have a property to sell, try to agree an entry date that gives you enough time to receive the money from your sale.

If you need a mortgage, allow enough time for the solicitor, conveyancer and lender to process the loan documents.

Withdrawing from the purchase

You might want to withdraw before the contract is binding. This is usually negotiated between your solicitor and the seller’s solicitor.

You might have to pay costs that have already been incurred. Before missives are concluded, you are not legally bound to pay the seller’s costs.

Once missives are concluded, you are legally obliged to proceed with the purchase. If you withdraw after that, you might have to pay damages for breaking the contract.