When buying a house, at what point do you actually hand over the deposit? This is a common question for homebuyers, especially first time buyers. In the UK, you typically pay your house deposit at the point of exchanging contracts and not when your offer is first accepted. Exchange of contracts usually happens before completion (moving day), often about one to four weeks prior (around 5–28 days, with ~10–14 days being common).
The House Buying Timeline for Deposits
When there’s no chain on a property, the purchase is “chain free”, which offers a few key advantages:
Understanding when the deposit is due means understanding the overall house buying timeline. Here’s how it generally works from offer to completion:
Offer Accepted: No deposit is paid yet. When the seller accepts your offer on the house, you do not pay any deposit at this stage. The property is “under offer,” but your money stays in your account for now. All that’s exchanged is a verbal or written agreement of the price; nothing legally binding and no funds transferred.
Conveyancing & Mortgage Process: Still no deposit required. After offer acceptance, both parties’ solicitors start the conveyancing process (legal paperwork, searches, surveys, etc.). You’ll also finalise your mortgage arrangements during this period. You do not pay the house purchase deposit during these steps; not when your mortgage is approved or when surveys come back. The deposit money remains with you until later in the process.
Before Exchange of Contracts: Prepare to pay the deposit. As the exchange of contracts approaches, your solicitor will ask you to transfer the deposit funds to them a few days beforehand so that the money is ready to go. Typically, your solicitor will provide you with their client account details and you’ll send the deposit via bank transfer.
Exchange of Contracts: Deposit is paid at this stage. The exchange of contracts is the pivotal moment in the sale. The point when both buyer and seller sign and swap the contract, making the deal legally binding. This is when you pay the deposit on the house. In practice, what happens is your solicitor, holding the deposit funds you sent them, will send the agreed deposit to the seller’s solicitor upon exchange. Once contracts are exchanged and the deposit is handed over, both you and the seller are committed to complete the sale.
Between Exchange and Completion: Deposit is held securely. After exchange, the seller’s solicitor holds your deposit money in trust until completion day (typically as a stakeholder on behalf of both parties). The seller usually doesn’t receive that money yet it’s held in escrow until the sale completes. This arrangement protects both sides. Importantly, if you were to back out after exchanging contracts, you would forfeit your deposit in most cases. On the flip side, if the seller were to fail to complete the sale, you’d generally get your deposit returned to you. Fortunately, such scenarios are rare once exchange has happened.
Completion (Moving Day): Rest of the money is paid. Completion is the final step; the day you actually get the keys and officially take ownership of the house. On the completion date, your solicitor sends the remaining balance of the purchase price to the seller’s solicitor. This includes the funds from your mortgage lender and any remaining portion of your cash deposit not already paid at exchange. Once the full amount is received, the sale is complete and you can move in. The deposit you paid at exchange simply becomes part of the total money paid for the house. For example, if you paid a 10% deposit on exchange, the other 90% is paid on completion.
How Much Deposit is Paid at Exchange?
In a typical home purchase, the exchange deposit is 10% of the purchase price. This is a common standard in England and Wales. For example, if you’re buying a house for £300,000, the contract will usually stipulate a £30,000 (10%) deposit is payable on exchange.
However, 10% is not a hard and fast rule. It can be negotiated or adjusted in some cases. If you’re a first time buyer with a smaller deposit (say 5% of the price), the seller may agree to accept a 5% deposit at exchange. The exact deposit amount for exchange is agreed in the contract, so discuss with your solicitor if a different percentage is needed. The key point is that you don’t necessarily pay your entire down payment upfront at exchange just the portion required as the exchange deposit. The remaining deposit (and mortgage funds) are paid at completion to make up the full purchase price.
The time to find your ideal home can vary widely. Some buyers locate a suitable property in a few weeks, while others may search for several months. The good news is being chain free gives you more flexibility. This stage is entirely dependent on your preferences and the housing market supply in your area.
Who Do You Pay the Deposit To?
When it’s time to pay the deposit, you don’t pay it directly to the seller. Instead, you pay it to your own solicitor (conveyancer), and then your solicitor sends it on to the seller’s solicitor as part of the formal exchange process. Typically, you will transfer the money via electronic bank transfer to your solicitor’s client account.
Once your solicitor transfers the deposit to the seller’s solicitor at exchange, that money is held in the seller’s solicitor’s account (usually in escrow) until completion. The funds remain protected and the seller’s solicitor cannot release the deposit to the seller until completion has occurred (unless otherwise agreed in unusual circumstances). This gives the seller assurance you’re committed, and gives you assurance that the money won’t disappear without the sale completing.
On completion day, the deposit is combined with the rest of the purchase funds. If something goes wrong after exchange (for example, if the seller fails to complete), the deposit would be returned to you or otherwise dealt with according to the contract terms. If you were to pull out after paying the exchange deposit, you would lose that deposit, as it would be forfeited to the seller for breaking the contract. In short, the deposit is handled by the solicitors as part of the legal process, you just need to get the money to your solicitor on time.
What About New Build Properties and Reservation Deposits?
Buying a new build home has an extra step or two when it comes to deposits. If you’re purchasing from a developer, you will often be asked to pay a reservation fee (deposit) to secure the property early on. This usually happens shortly after your offer is accepted on the new build. The reservation fee is generally a small upfront payment (commonly between about £500 and £2,000) that reserves the property for you and takes it off the market. It’s essentially a show of good faith and helps the developer cover administrative costs. Make sure you clarify whether this reservation fee is refundable or not if the sale doesn’t proceed. Typically, if the developer pulls out or certain conditions aren’t met, you might get it back, but if you back out, you might lose it. Often, the reservation fee will be deducted from the purchase price or from your exchange deposit later on, so it ultimately counts toward the money you’re paying for the house.
After the reservation, the purchase progresses through the usual conveyancing steps (though often on a faster track. Developers may set a 28 day target to exchange contracts on new builds). When it comes time to exchange contracts on a new build, you will still pay an exchange deposit like any other purchase. For new builds, the exchange deposit is also typically 10% of the purchase price (some developers may even ask for more, depending on their terms). The reservation fee you paid earlier is usually counted toward that amount. The timeline can be different (often a quick turnaround from reservation to exchange, and then possibly a long wait for completion if the home is still being built), but the key point is you pay the bulk of the deposit at exchange of contracts even for a new build; the reservation fee is just an initial chunk paid earlier.
How Michael Anthony Estate Agents Can Help
At Michael Anthony Estate Agents, we’re here to guide you through every stage of the buying process; from offer accepted to exchange of contracts and completion. If you have questions about deposits, timelines, or what to expect next, our experienced team is on hand to give clear, practical advice tailored to your situation. Get in touch today.
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Frequently Asked Questions
Do you pay a deposit before completion?
Yes, the deposit is paid at exchange of contracts, which takes place before completion. In the typical timeline, you exchange contracts (and pay the deposit) about 1 to 4 weeks prior to the completion date. Paying the deposit at exchange secures the deal. By completion day, the deposit has already been paid; on completion, you then pay the remaining balance of the purchase price.
When should you send your house deposit to your solicitor?
Your solicitor will let you know when to transfer your deposit funds to them, but generally you should send the deposit shortly before exchange of contracts. It’s common to transfer the money a few days ahead of the planned exchange date. This gives the funds time to clear into the solicitor’s client account so that on the day of exchange, your solicitor can promptly send the deposit to the seller’s solicitor.
How long after an offer is accepted do you pay a deposit?
There’s no fixed number of days, but on average it can take several weeks (often around 8–12 weeks) from offer acceptance to reach the point of exchanging contracts (when the deposit is paid). After your offer is accepted, there’s a period of conveyancing: surveys are done, searches completed, mortgage finalised, contracts drafted, etc. Only once all parties are satisfied and ready to commit do you exchange contracts and pay the deposit. In a smooth transaction, this might be a couple of months after the offer.
How soon before moving in do you pay a deposit?
Typically, you pay the deposit about one to a few weeks before you move in. “Moving in” usually coincides with completion day (when you get the keys). The deposit is paid at exchange of contracts, which commonly happens roughly 1-4 weeks prior to that completion/moving date. On average, exchange is around 10-14 days before completion in many transactions.