Ground rent
An annual charge to the freeholder, historically £50-£300. Reforms have curtailed ground rents on many newer leases - always check the lease.
Buying Services
Guide to buying property
Whether it's your first home or your next HMO, buying in England & Wales follows a clear path. This guide walks you through every stage, explains freehold vs leasehold, and shows the real costs to budget for - in plain English.
The buying journey
From first thought to keys in hand
Eight stages take you from getting finance-ready to a property that's yours - and, for investors, actually earning.
- 01Before you search
Get your finances ready
Work out your true budget - deposit, fees and running costs, not just the price. Get a mortgage Agreement in Principle so your offer is taken seriously.
- 02Finding the right property
Search & assess
Shortlist properties that fit your goals. For an HMO, this is where licensing, Article 4 and realistic room-by-room income get checked - not after you've offered.
- 03Agreeing the deal
Make an offer
Negotiate and agree a price. In England & Wales an accepted offer isn't legally binding yet - either side can still walk away until exchange.
- 04The legal work begins
Instruct a solicitor
Your conveyancer handles the legal work: local authority searches, raising enquiries, checking the title and (for leasehold) reviewing the lease.
- 05Checks & funding
Survey & mortgage
Commission a survey suited to the property's age and condition, while your lender values it and issues the formal mortgage offer.
- 06Point of no return
Exchange contracts
Deposit is paid and the sale becomes legally binding. A completion date is fixed - neither party can back out without serious penalty.
- 07It's yours
Completion
Funds transfer, the property is yours and you get the keys. Land Transaction Tax must be paid within 30 days of completion.
- 08Getting it working
After completion
Your solicitor registers you at the Land Registry. For an HMO, this is when licensing, certification and management are set up so it performs from day one.
Know what you're buying
Types of ownership
How you own a property shapes your costs, control and responsibilities. Here's how the four main types compare.
| Ownership type | What you own | Typical for | Ongoing costs | Control |
|---|---|---|---|---|
| Freehold | The building and the land it sits on, permanently. | Most houses (including most HMOs). | Just your own upkeep - no ground rent or service charge. | Full |
| Leasehold | The right to occupy for a fixed term (often 99-999 years). | Most flats and apartments. | Ground rent and service charges to the freeholder. | Limited by the lease |
| Share of Freehold | Your leasehold flat plus a share of the building's freehold. | Flats where leaseholders bought the freehold together. | Shared building costs, but you collectively control them. | Shared |
| Commonhold | Your flat outright, with no time limit, via a commonhold association. | Rare in England & Wales, but exists. | Shared maintenance, managed collectively. | Shared, no landlord |
If it's leasehold
Leasehold, explained
Buying leasehold means extra things to check. None are dealbreakers - but you want to know them before you commit.
Service charges
Your share of running the building - insurance, communal utilities, maintenance, repairs and management fees. Ask for the last few years' accounts.
Sinking / reserve fund
Money set aside for big future works like a new roof or lift. A healthy fund protects you from sudden large bills later.
The 70-year rule
Most lenders want at least ~70 years left on a lease before they'll lend. A short lease is harder to mortgage and more expensive to extend.
Budget for the full picture
The costs of buying
The price is only part of it. Two things catch buyers out most: tax and the smaller fees that add up.
Land Transaction Tax (Wales)
Wales replaced Stamp Duty with LTT. You pay the rate on the portion of the price within each band.
| Portion of price | Main rate |
|---|---|
| Up to £225,000 | 0% |
| £225,001 to £400,000 | 6% |
| £400,001 to £750,000 | 7.5% |
| £750,001 to £1.5m | 10% |
| Above £1.5m | 12% |
Main residential rates, correct at the time of writing - always confirm on gov.wales. Most HMO purchases are additional properties, so higher rates apply on top - use the official calculator for your figure.
Other costs to budget for
- Deposit - typically 25%+ for an HMO buy-to-let mortgage
- Solicitor / conveyancer fees plus disbursements
- Survey (level 2 or 3 depending on the property)
- Mortgage arrangement and valuation fees
- Land Transaction Tax (paid within 30 days of completion)
- Buildings insurance from the day you exchange
Plain English
Jargon buster
The terms you'll hear during a purchase, decoded.
Conveyancing
The legal process of transferring property ownership from seller to buyer, handled by a solicitor or licensed conveyancer.
Agreement in Principle (AIP)
A lender's early indication of how much they'd likely lend you, based on a soft credit check. It makes your offers more credible.
Searches
Checks your solicitor runs with the local authority and others to uncover issues like planning, flooding, drainage or road schemes.
Exchange vs completion
At exchange the contracts become legally binding and a date is set; at completion the money moves and the property becomes yours.
Disbursements
Third-party costs your solicitor pays on your behalf - search fees, Land Registry fees, bank transfer fees and so on.
Gazumping
When a seller accepts a higher offer from another buyer after already accepting yours - possible because nothing is binding until exchange.
Common questions
Buying FAQs
How long does buying take?
From accepted offer to completion typically takes 8-14 weeks, though chains, leasehold complications or slow searches can extend it.
How much deposit do I need for an HMO?
HMO and buy-to-let mortgages usually need a larger deposit than a standard home - commonly 25% or more of the purchase price.
Do I pay extra tax buying an HMO?
Most HMO purchases are additional properties, so higher Land Transaction Tax rates apply on top of the main rates. Always check the official WRA calculator for your figure.
What survey should I get?
For older or larger HMOs a Level 3 (full building) survey is usually worth it; newer properties in good order may only need a Level 2.
Can the sale fall through before exchange?
Yes - in England & Wales either side can withdraw at any point up to exchange of contracts, which is why moving quickly through the legal stage matters.
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