When Do You Transfer Deposit to Solicitor UK

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When buying a property, one of the key steps in the conveyancing process is paying the deposit. Knowing when and how to transfer it to your solicitor is important to keep your purchase on track and avoid delays. The timing of the deposit payment depends on where you are in the transaction, the terms of your contract, and your solicitor’s requirements. Understanding this process helps buyers plan finances carefully and ensures funds are ready when needed.

What Is the Deposit in a Property Purchase

In UK property transactions, the deposit is a percentage of the purchase price paid when contracts are exchanged. It acts as a financial commitment from the buyer to show they intend to complete the purchase. The standard deposit amount is usually 10% of the property price, though it can sometimes be less, especially if the buyer is using a mortgage or part-exchange.

This money is separate from any initial holding or reservation fees paid earlier in the process, such as when buying a new-build home or making an offer through an estate agent.

When You Transfer the Deposit to Your Solicitor

You will usually transfer the deposit to your solicitor shortly before contracts are exchanged. The solicitor will tell you exactly when they need the money, as they must have cleared funds in their client account before exchange can take place.

In practice, the process looks like this:

1. After Your Offer Is Accepted
Once the seller accepts your offer, your solicitor begins the conveyancing process. At this stage, you don’t need to transfer the deposit yet, but you should start preparing funds to ensure they are available when requested.

2. Before Exchange of Contracts
Your solicitor will contact you once the contract is ready to exchange. This is the point when the deposit must be transferred. The solicitor cannot proceed with the exchange until they have received the full deposit and confirmed the funds have cleared.

It’s best to send the money at least one working day before the agreed exchange date to allow time for bank processing. If you transfer funds late, it can delay the exchange and risk losing your purchase slot, especially in a chain transaction.

3. On Exchange of Contracts
During the exchange, your solicitor sends the deposit to the seller’s solicitor as part of the formal contract agreement. This step legally commits both parties to the transaction. Once the deposit is transferred and contracts are exchanged, you are bound to complete the purchase on the agreed completion date.

How Much Deposit You Need to Pay

The standard amount is 10% of the property’s purchase price. However, this can vary based on individual circumstances.

• If you are getting a mortgage: Some lenders may allow a smaller deposit at exchange, such as 5%, with the rest of the funds covered by your mortgage on completion.

• If you are part of a chain: The deposit may be passed along from your buyer’s deposit, meaning you might only need to top it up rather than provide the full amount yourself.

• If you are buying a new-build: Developers sometimes accept a smaller deposit upon exchange, especially when completion will take place several months later.

Your solicitor will confirm the exact figure and ensure it matches the terms of the contract.

How to Transfer the Deposit Safely

Because property transactions involve large sums of money, it’s crucial to transfer your deposit securely. Solicitors typically require deposits to be paid via bank transfer rather than cheque or cash.

Follow these best practices:

• Always verify your solicitor’s bank details directly with them over the phone before transferring funds.

• Avoid sending money to bank details received by email without verbal confirmation, as email scams targeting homebuyers are increasingly common.

• Transfer funds from an account in your name to ensure compliance with anti-money laundering checks.

• Notify your bank in advance if you are transferring a large amount to prevent security holds or delays.

Your solicitor will confirm once the funds have been received and cleared in their client account.

What Happens to the Deposit After Exchange

Once contracts are exchanged, the deposit is held by the seller’s solicitor, usually as a stakeholder, until completion. This means it cannot be released to the seller until the transaction is finalised.

If the buyer fails to complete after exchange, they risk losing their deposit. Conversely, if the seller pulls out, the buyer can seek to recover their deposit and may also be entitled to claim compensation for any losses.

This arrangement provides security for both parties, ensuring that everyone is fully committed to completing the purchase.

What If You Don’t Have the Full Deposit

If you are struggling to provide the standard 10% deposit, discuss this with your solicitor as early as possible. Some sellers agree to accept a smaller percentage, particularly if your offer is strong or your mortgage lender requires a lower upfront contribution.

In chain transactions, your solicitor can often use part of your buyer’s deposit from the sale of your current property to cover the amount needed for your purchase. This process is common and helps transactions flow smoothly along the chain.

Common Causes of Delay

The most common reasons for deposit delays include:

• Buyers not transferring funds early enough for clearance

• Incorrect bank details or payment reference errors

• Money coming from multiple accounts or third parties, requiring additional verification

• Bank transfer limits causing partial payments over several days

Planning ahead and communicating with your solicitor helps prevent these issues. Always ask how long the funds will take to clear and ensure the money is ready in advance of your exchange date.

When the Deposit Is Refunded

If the transaction falls through before contracts are exchanged, your solicitor will refund the deposit in full. However, once contracts have been exchanged, the deposit is legally binding, and pulling out may mean forfeiting the money unless there are exceptional circumstances.

Refunds are typically processed within a few working days once all parties confirm that the deal has been cancelled and no fees are outstanding.

Final Thoughts

You should transfer your deposit to your solicitor shortly before contracts are exchanged, ensuring they have cleared funds in time for the transaction to proceed. Acting early, verifying bank details, and keeping in close communication with your solicitor will help the process run smoothly and securely.

The deposit represents more than just money—it’s a commitment to the purchase. By understanding when and how it should be transferred, buyers can avoid last-minute stress and move confidently towards completion.

Further guidance: when does a solicitor request mortgage funds and when does solicitor check proof of funds, plus see our Solicitors Hub.