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Moving to Scotland

  1. 25 January 2018
  2. By Andi Michael

With Burns Night being celebrated across Scotland, either with drams of whisky or haggis, neeps and tatties, we thought we’d highlight how you can move there. 



Though Scotland is part of the UK, their property system is slightly different due to the devolved parliament. That means that if you’re planning on moving to Scotland, you may be surprised when you find your dream home.

With property prices rising in Scotland by an average of 3.6% in a year, and even more in Edinburgh, if you’re planning on moving, it’s worth being aware of the process.

Home Reports:

Scottish homes require Home Reports in order to be sold. A Home Report is in place of a survey, and is procured by the seller, not the buyer. It is an up to date assessment of the property, including: This will be carried out by a RICS Chartered Surveyor, and it is the responsibility of the seller to ensure an up to date Home Report is available for the potential buyer to view. The Home Report must be within 12 weeks when the property goes on the market, and there is no necessary ‘end date’. However, if a house has been on the market for a while, (around 3 months) a ‘refresh’ of the Home Report is recommended to ensure it is as up to date as possible. However, if a fairly up to date report is available but the buyer wants a completely new one, it would be down to them to pay.

A Home Report is in place of the standard HomeBuyer or Building Reports, and can usually be turned around within 2-3 days. The price varies on the size of the property, but you can get Home Report quotes on reallymoving. A Home Report does not take very long to carry out.

When don't you need a Home Report?

New builds being sold off-plan or to the first buyer, newly converted premises, residential properties attached to commercial properties (and sold together), holiday homes used for less than 11 months of the year and properties that will be demolished. Home Reports do not apply to commercial property.

The Legal Process:

The UK system has a slight issue in that right up to the point of exchange, there is no contract. This means buyers can drop out at any point, and allows for gazumping or gazanging. The Scottish system is slightly different, as you contractually agree to buy the property earlier in the process, through missives. These are the letters of contract and are legally binding. You also hire a solicitor sooner in the process. Have a look below.
 

Six steps to buying a property in Scotland:

  1. Get a property solicitor ready for when you find your perfect property.

  2. View a property, decide you like it, get access to the Home Report.

  3. Set up a mortgage with a lender. They may want to see the Home Report.

  4. Instruct your solicitor to ‘note interest’. This means you want to know if there’s an end date for offers, and want to be kept up to date with what’s going on with the property – you’re interested. This allows agents to gauge interest and suggest an ‘ending’ date for offers, which can encourage bidding.

  5. Instruct your solicitor to make an offer. An offer can be quite in depth and will include conditions, like the completion date and price, along with things like the titles and any extensions or extra issues with the property. The seller’s solicitor will respond with their views on the offer, perhaps counter-offering, or stipulating certain conditions of their own. These letters back and forth are called ‘missives’ and they can take a couple of weeks to be finalised, if not longer. In Scotland, this level of offering is a contractual agreement – you have offered an amount and you need to be prepared to honour it. If there were multiple people making offers, you may have outbid them, and so the missives show a commitment to sell to you. If issues appear in Local Authority searches, buyers can pull out.

  6. Six or seven weeks need to be given in order for completion to be reached (this also allows lenders to set up the mortgage), and the date of moving in will have been agreed in the missives.

This process is not necessarily any more lengthy than buying in England or Wales, but the security against breaking a contract is there, as the contract is enacted from the moment you make the offer and it is accepted. This provides more security than the English and Welsh systems.
 

Stamp Duty (Or rather, Land and Buildings Transaction Tax)

The changes to Stamp Duty for first time buyers don’t apply in Scotland. Scotland has the LLBT (Land and Buildings Transaction Tax) in place of Stamp Duty. Properties under £145,000 pay no tax, in an effort to support first time buyers. See the table below for the breakdown of the LLBT dependent on property price. It is paid at the same time your Stamp Duty would normally paid (within 30 days of completion).
 

Purchase price bands (£)

LBTT percentage rate (%)

Up to £145,000

0%

Above £145,001 to £250,000

2%

Above £250,001 to £325,000

5%

Above £325,001 to £750,000

10%

Over £750,000

12%

 
As of 1st April 2016, property buyers in Scotland must pay an extra 3% surcharge for additional properties, such as second homes and Buy-to-Let. Any property under the total value of £40,000 will not have to pay the extra LBTT.

Purchase price bands (£)

Old LBTT percentage rate (%)

New LBTT percentage rate (%)

Up to £145,000

0%

3%

£145,001 to £250,000

2%

5%

£250,001 to £325,000

5%

8%

£325,001 to £750,000

10%

13%

Above £750,000

12%

15%

 
Now that you know how to go about buying a home in Scotland, you can focus on the important things, like making sure you have some excellent shortbread available for your removals team!
 

 

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