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Exchange of Contracts in England and Wales: What Becomes Binding and What to Check First
UK Property Insights · Buying Process

Exchange of Contracts in England and Wales: What Becomes Binding and What to Check First

Exchange of contracts is the point at which a UK property purchase becomes legally binding. Before it, either side can usually withdraw. After it, pulling out normally costs you your deposit and possibly more.

This Banke UK guide explains what happens at exchange in England and Wales, what to have in place beforehand, and why overseas buyers should plan the money carefully. Scotland uses a different process.

The short answer

At exchange, buyer and seller each sign identical copies of the contract, the buyer's solicitor sends the deposit, and a completion date is fixed. From then on both sides are bound. Do not exchange until your searches, survey, mortgage offer and insurance are settled.

What happens on the day

  • Both solicitors confirm that all enquiries are answered and the contract terms are agreed.
  • You sign the contract and your solicitor holds it until the exchange is agreed.
  • The deposit is sent to the seller's solicitor. It is commonly 10% of the price, but it can be agreed otherwise, so check what your contract says.
  • The solicitors agree a completion date, often by phone, and the contracts are treated as exchanged.

What to have in place before you exchange

  • Searches back and reviewed. See UK property searches explained.
  • Survey done. Our guide to RICS survey levels helps you choose.
  • Mortgage offer in hand, if you are borrowing, and any valuation issue settled. See down valuations.
  • Buildings insurance starting from exchange, because risk can pass to you at that point. Ask your solicitor to confirm.
  • Funds ready. Deposit and completion money should be ready and the source of funds documented. See proof of funds for overseas buyers.
  • Documents signed. If you are abroad, plan witnessing and delivery in advance.

The gap between exchange and completion

The gap is agreed between the parties and is often one to four weeks, but it can be shorter or longer. During it, the sale is committed. If you fail to complete on the agreed date, the seller can have remedies, which may include keeping the deposit. Read what happens on completion day.

Currency and transfer timing

If you are sending sterling from abroad, plan the transfer well before exchange and completion. Exchange rates can move between exchange and completion, which changes what your money buys. See GBP exchange rate risk.

Things to ask your solicitor

  • What exactly will we be bound to on exchange?
  • What is the deposit and who holds it?
  • What are the consequences if completion is delayed?
  • Is there anything in the contract about fittings, repairs or the lease that I should negotiate?

Speak to Banke UK

If you are buying from abroad and want help planning the steps, contact the Banke UK team.

Note: Exchange rules differ in Scotland. Terms vary by contract. This is general information, not legal, tax or financial advice. Rules and procedures change, so confirm current details with the relevant authority or a qualified professional before you commit money. Take advice from a UK solicitor.