Stats, and Tips
Buying, selling and letting property is a complicated business and there are even more pitfalls to look out for than with a domestic sale. For sellers, there’s higher stakes, higher investment, correct registry of the property with local authorities and more, for buyers, their entire livelihoods are on the line.
At PLS Solicitors, we are experts at managing the legal requirements of property transfers. We do it all over the UK for buyers and renters, sellers and letters. We ensure successful, stress-free transactions which will keep you protected before, during and after the sale.
If you’re moving your business into a premises or have a business space to be utilised, here’s our step by step guide for buyers and sellers on what you need to do to get the ball rolling.
For Buyers:
- Understand the Commercial Market Landscape: Purchasing a commercial property in the UK is different from buying residential property, with factors such as location, property use class, zoning regulations, and market conditions heavily impacting value. The market fluctuates based on economic conditions, demand in specific sectors (e.g., retail, office space), and investment interest. According to the UK’s Office for National Statistics (ONS), the commercial property market has experienced fluctuations over the last few years, with recent increases in industrial and warehousing demands, often exceeding those for office and retail spaces.
- Financing the Purchase: Commercial properties typically require larger down payments and higher interest rates than residential mortgages. Most commercial buyers pursue finance options such as:
- Commercial Mortgages: Usually requiring at least a 20–40% deposit, commercial mortgages offer a way to spread the cost over a longer period.
- Bridging Loans: These can be useful for buyers needing immediate capital before securing long-term financing but often come with high interest.
- Self-Invested Personal Pension (SIPP): If eligible, buying through a SIPP offers tax benefits for those purchasing as an investment.
Consult a mortgage broker specialising in commercial finance to compare options and find the best terms for your business needs.
- Instruct a Conveyancing Solicitor To Conduct Due Diligence: Due diligence is crucial, given the complexity of commercial property. This is where PLS Solicitors can come in to investigate any issues which may affect your purchase. Our expert team can clear your way through environmental or building use restrictions, meeting and changing intended business requirements (A1 for retail, B1 for offices, etc.), as well as assessing the building’s structure, safety, and compliance with legal standards.
Conveyancing for commercial property is typically more intricate than residential purchases. Following due diligence stages, we will draft contracts with all parties, check for encumbrances, and handle the Land Registry registration. We even verify planning permissions, environmental regulations, and building standards compliance, ensuring that you’re protected against potential liabilities.
- Finalising the Purchase: PLS Solicitors will negotiate the final contract terms, coordinate with lenders, and prepare you for extra costs like Stamp Duty Land Tax (SDLT), typically higher than residential rates. Finally, we will arrange a completion date for your purchase, and the property title will be transferred to your name.
For Sellers:
Assess the Property’s Value: For a successful sale, determine the current market value of your property. Engage an RICS-certified surveyor to conduct a valuation, considering factors such as location, demand, and property condition. According to the RICS Commercial Property Survey, rental yields and values vary by sector, so stay informed on sector trends to accurately gauge your property’s worth.
- Instruct a Conveyancing Solicitor To Prepare Legal Documentation: Commercial property sales come with various obligations, such as providing an Energy Performance Certificate (EPC) and ensuring that lease agreements (if applicable) are up-to-date and compliant with regulations. PLS Solicitors will work closely with you to prepare all legal documentation, including: Property Information Forms, Lease Agreements if there are tenants, Title Deeds and Land Registry Documents.
- Market the Property: To attract potential buyers, consider engaging a commercial estate agent with market expertise. Marketing strategies they can offer include professional photos, online listings, virtual tours and brochures to improve visibility and appeal.
- Negotiation and Agreements: Commercial property sales often involve longer negotiation periods due to high-value investment. PLS Solicitors will manage all offers for you, and ensure that they are in writing and with clearly laid out terms. We will then negotiate any further terms such as a final price, payment schedule, and inclusion of fixtures. Having our team on board will ensure that all terms are reviewed and explained to you properly, and that all conditions are formally documented.
- Completing the Sale: Once the price and terms are agreed, PLS Solicitors will draft the sale contract, assist in Capital Gains Tax (CGT) calculation, arrange completion, and handle all necessary filings with the Land Registry. Sellers must also be aware that CGT rates vary depending on the profit made and the seller’s income tax bracket, so seeking advice from a tax advisor can help you prepare for this potential expense.
Final Tips for Buyers and Sellers
As both parties will be business professionals, buyers and sellers should be updated anyway on commercial property regulations, tax implications, and market trends. It always helps to have somebody with a wealth of industry experience on your side though, just in case anything slips through the net. These factors significantly impact a transaction’s profitability. PLS Solicitors’ reliable team of Conveyancing professionals and solicitors will guarantee you have a smooth, valuable and legally sound property transaction.
Call us today on 03300 565 423 (Monday – Saturday, office hours) or complete one of our online enquiry forms.