The Fundamentals of Buying a Home - Part 2 | Fundamenta Property Finance

In Part 1, we looked at understanding your position before you fall in love with a property: purchasing power, income, debt, credit and the paperwork lenders will want to see. By this stage, you should have a reasonable idea of what you can borrow, what a lender might query about the property itself, and what to have ready.

Part 2 picks up from there. It covers what happens once an offer is on the table, the checks and costs that come before a property is legally yours, and the ways the process in Scotland differs from England and Wales. As before, some sections apply UK-wide and others are specific to one nation. These are flagged where it matters.

10. Freehold homes with estate charges

Not every charge comes from a lease. Some freehold homes in England and Wales, mostly on newer developments, carry an estate charge. This is separate from leasehold service charges and applies even though you own the property outright.

Estate charges usually cover the upkeep of roads, drainage, landscaping, play areas or other shared spaces on the development that have not been taken over ("adopted") by the local council. The charge may be paid to a management company, a residents' management company, or the estate owner directly.

Before buying a freehold property with an estate charge, find out:

How much the charge is and how it is calculated.

What it actually pays for.

How often it is reviewed and how future increases are worked out.

Who manages the estate, and whether there have been disputes.

Whether the roads have been adopted by the council, or are ever likely to be.

What happens, and what powers the management company has, if the charge is not paid.

Freehold ownership does not automatically mean there are no ongoing charges to budget for, and estate charges have historically had less regulation behind them than leasehold service charges. Reform is in progress under the Leasehold and Freehold Reform Act 2024, which would require estate charges to be reasonable and give homeowners clearer information and a route to challenge unfair costs, but the relevant part of the Act was still subject to government consultation in early 2026 and had not yet been brought into force. Until it is, the protections a buyer has largely depend on what is written into the transfer and the estate management agreement. Your solicitor should review this alongside the title, and your broker will need to know about any charge that could concern a lender.

11. Get the property properly looked at

A mortgage valuation and a survey are not the same thing, and mixing them up is a common and costly mistake.

The lender's valuation is carried out for the lender, not for you. It confirms the property is worth roughly what you are paying for it and is suitable security for the loan. It is often a brief visit, and in some cases may be done using data rather than an inspection at all. Either way, it is not a report on the property's condition, and it is not something you should rely on to decide whether to proceed.

If you want to know what state the property is actually in, you need to arrange a survey yourself, through a RICS-regulated surveyor. There are broadly three levels:

Level 1 (Condition Report) - A basic overview flagging obvious risks and defects, with no advice on repairs. Suited to newer properties in good condition, and rarely used in practice.

Level 2 (Home Survey/Homebuyer Report) - The most commonly used option. A visual inspection of accessible areas with a traffic-light rating for each part of the building, plus guidance on what issues mean and what to do about them. Generally suitable for conventional properties built from the mid-20th century onwards, in reasonable condition.

Level 3 (Building Survey) - The most detailed option, going into the likely causes of defects and what they mean for repairs and costs. Generally recommended for older, listed, altered or unusually constructed properties, or anywhere you already have concerns.

The right level depends on the age, construction and apparent condition of the property, not just the price. A survey that flags a problem can also be useful when negotiating, and can occasionally save you from buying a property that was never going to be mortgageable in the first place.

12. The searches your solicitor carries out

Once you are under offer, your solicitor will apply for a number of searches. These take time, which is one of the reasons the process rarely moves as quickly as buyers would like, but they exist to uncover things a viewing will never show you.

Common searches include:

Local authority search - Covers planning permissions and building control records affecting the property, whether roads and pavements have been adopted by the council, and other local authority information.

Water and drainage search - Confirms how the property is connected to public water and sewerage.

Environmental search - Looks at contamination risk and flood risk, among other things.

Depending on where the property is, additional searches may be needed, for example around historic mining activity or chancel repair liability. Your solicitor will know which apply to your purchase.

If a search raises a question, it does not automatically mean the purchase is in trouble. It may mean further enquiries, an indemnity policy, or a conversation about a specific issue with the seller's solicitor. What matters is that the questions get asked and answered before you are committed, not after.

13. Budgeting for property tax

Buyers often budget for the deposit and forget that there is a tax bill on top. It applies differently depending on where you are buying.

England and Northern Ireland

Stamp Duty Land Tax (SDLT) applies. The standard nil-rate band is £125,000, with rates rising in bands up to 12% above £1.5 million. First-time buyers pay no SDLT up to £300,000, provided the purchase price does not exceed £500,000. Buying an additional property, such as a second home or a buy-to-let, adds a 5% surcharge on top of the standard rates, and non-UK residents pay a further 2% surcharge. SDLT is due to HMRC within 14 days of completion. These SDLT rates have been in place since April 2025 and were untouched at the Spring Statement in March 2026, but the Autumn Budget, usually delivered in late October or November, is the point where SDLT changes are typically announced. If you are reading this after that Budget has happened, check the current thresholds before relying on the figures above.

Scotland

Land and Buildings Transaction Tax (LBTT) applies. The nil-rate band is £145,000, rising to £175,000 for qualifying first-time buyers, with bands increasing up to 12% above £750,000. Buying an additional residential property adds the Additional Dwelling Supplement (ADS), currently 8% of the full purchase price rather than a marginal rate on each band, which makes it a significant cost for second homes and buy-to-lets even at modest prices. LBTT is administered by Revenue Scotland and due within 30 days of completion.

Wales

Land Transaction Tax (LTT) applies. The nil-rate band is £225,000, the highest of the three, rising in bands to 12% above £1.5 million. There is no first-time buyer relief in Wales, though the higher nil-rate band means most first-time buyer purchases fall within it anyway. Additional properties are taxed on their own separate band structure rather than a flat surcharge. LTT is administered by the Welsh Revenue Authority and due within 30 days of completion.

These figures move with each government's budget, so check the current rate before you rely on it, and ask your broker or solicitor to confirm the exact figure for your purchase. Whichever nation you are buying in, this is a cost to plan for from the outset, alongside legal fees, survey fees and removals, not something to work out once you are already committed.

14. Exchange, completion, and the risk of losing the property

In England and Wales, accepting an offer is not the same as agreeing a contract. Nothing is legally binding until contracts are exchanged, and that gap, which commonly runs to several weeks or months, is where transactions are most likely to fall apart.

Because neither side is bound before exchange, a seller remains free to accept a higher offer from someone else, known as gazumping, and a buyer remains free to try to reduce their offer shortly before exchange, known as gazundering. Both are legal, and both can happen after you have already paid for a survey, searches and legal work. The best protection is simply to move as quickly as reasonably possible: instruct your solicitor promptly, respond to requests for documents without delay, and keep the pressure on all sides to reach exchange.

The government has said it wants to reform this part of the process, including proposals to bring binding commitments earlier and reduce the number of sales that collapse. At the time of writing this remains a proposal, not law, so for now the current rules still apply and buyers should plan accordingly.

Once contracts are exchanged, the position flips: both sides are bound, the completion date is fixed, and pulling out means losing your deposit and potentially facing further claims. From the point of exchange you carry the risk in the property even though you do not yet legally own it, which is why your solicitor and lender will usually want to see buildings insurance in place from that date, not from completion.

Completion itself is largely a formality by comparison: your solicitor sends the balance of funds, the transfer is completed, and keys are released, usually by early afternoon.

15. Scotland works differently from the outset

If you are buying in Scotland, much of the above still applies, but the shape of the process is different, and it starts earlier.

Nearly every property for sale must have a Home Report before it goes on the market. This is prepared for the seller and covers three things: a single survey giving a professional assessment of condition and value, an energy report, and a property questionnaire completed by the seller. As a buyer, ask your solicitor to review the Home Report before you offer, since it stands in for much of what a separate survey would tell you in England and Wales, though you can still commission your own survey if you want a second opinion.

Properties are often marketed "offers over" a stated figure, sometimes with a closing date set by the seller's solicitor by which all interested buyers must submit their best offer. Your solicitor submits the offer on your behalf, and you will usually hear the outcome within a few hours of the deadline.

If your offer is accepted, it does not create a binding contract straight away. Instead, the solicitors exchange a series of formal letters called missives, covering price, the fixtures included, the date of entry, and any other conditions. This typically involves an offer, a qualified acceptance responding to it, and further letters until both sides agree. Only once missives are concluded does a binding contract exist, and this is the point equivalent to exchange in England and Wales. Because it usually happens earlier in the process than an English exchange, and often once a mortgage offer is already in hand, the long uncommitted gap where gazumping and gazundering happen is much shorter, though it is not eliminated entirely while missives remain open.

The date fixed in the missives for handing over the keys and the money is called the date of entry, Scotland's equivalent of completion.

Buying a home well is less about any single decision and more about getting the order right: understand your position, understand the property, and get the right professionals looking at both before you are financially or emotionally committed. Part 1 covered the first half. This has covered the second.

Your home may be repossessed if you do not keep up repayments on a mortgage secured on it.