When Do You Pay Your House Deposit? A Step-by-Step Guide
When Do You Pay Your House Deposit? A Step-by-Step Guide
Buying a house is a big deal, and one of the questions we get asked all the time is:
“When do I actually pay my deposit?”
Whether you’re buying a home, a new-build property, or just starting the conveyancing process, this guide will walk you through the key moments when money changes hands—and how much you’ll need to pay at each stage.
Key Points at a Glance
- You usually pay 10% of the purchase price as a deposit at exchange of contracts.
- If you're buying a new-build, you might also pay a reservation deposit upfront (usually £250–£2,000).
- You pay your deposit to your solicitor, who then sends it to the seller’s solicitor when contracts are exchanged.
- The deposit sits safely in the seller’s solicitor’s account until completion—they can’t release it early without written agreement.
- Never pay your deposit directly to the seller. Your solicitor handles everything.
What Is a House Deposit—and When Do You Pay It?
1. Solicitor’s Deposit (Day 1)
When you first instruct your solicitor, they may ask for a small upfront deposit to open your file. This isn’t your house deposit—it’s just to cover admin and get things moving.
- Typical amount: £160 to £300
- At Parachute Law, we only ask for £160—and it’s covered by our No Sale, No Fee policy.
2. Reservation Deposit (New Builds Only)
If you're buying a new-build, you may be asked to pay a reservation deposit to reserve the property and take it off the market.
- Amount: £250 to £2,000
- This is usually deducted from the final 10% deposit you pay at exchange.
Be careful:
Some agents charge this as a non-refundable fee, so always ask if it’s deductible and refundable before you pay. If in doubt, speak to us first!
3. Exchange Deposit (The Day Before or On Exchange of Contracts)
This is the main deposit that everyone talks about. At exchange, your solicitor will send this to the seller’s solicitor to legally bind the sale.
- Standard amount: 10% of the purchase price
- Sometimes, the seller will accept less than 10% (e.g., 5%)—but only if you agree in writing.
Example Clause from the Contract:
"The buyer is to pay or send a deposit of 10% of the purchase price no later than the date of the contract."
Even if you're using a bigger deposit overall (e.g. 25%), you usually just pay 10% at this stage. The rest is paid on completion day.
4. Balance of Completion Monies (1 Day Before Completion)
The day before you get your keys, you’ll need to send your solicitor the rest of the money, including:
- The remaining balance of the purchase price
- Stamp Duty (due within 14 days of completion)
- Land Registry fee
- Solicitor’s final invoice
- Any leasehold charges (e.g. landlord’s notice fees or service charge apportionments)
Your solicitor will send you a completion statement breaking down everything that’s due. Always double-check this document and ask questions if anything isn’t clear.
How to Transfer Your Deposit Safely
- Most banks allow faster payments of up to £10,000 per day.
- If you need to send more (e.g. £25,000), stagger it across 2–3 days to avoid bank charges.
- Always verify your solicitor’s bank details over the phone—never rely on an email alone. This helps protect you from fraud.
What If You Can’t Afford the Full 10% Deposit?
You can often negotiate a lower exchange deposit with the seller, especially if:
- You're buying with a mortgage
- You're a first-time buyer with limited savings
- The seller is keen to move quickly
Just be aware that you’re still liable for the full 10% under the contract—even if the seller agrees to accept less at exchange.
Why Timing Matters
Your deposit needs to be cleared and in your solicitor’s account before they can exchange contracts. If it’s not, the exchange can be delayed, and you could miss your agreed completion date.
How Long Until You Exchange Contracts?
Most conveyancing transactions take:
- 8 weeks for a freehold property
- 12 weeks for a leasehold or share of freehold
But this can vary based on:
- Whether you're getting a mortgage
- How long the chain is
- Leasehold complexity (e.g., dealing with a management company)
- Gifted deposits (from family or elsewhere)
- How responsive the seller or other parties are
Summary: When You Pay Your House Deposit
Stage | What You Pay | Who You Pay |
Day 1 – Instruct Solicitor | £160–£300 admin deposit | Your solicitor |
Day 1 – Reserve New Build | £250–£2,000 reservation deposit | Estate agent or developer |
Before Exchange | 10% exchange deposit | Your solicitor |
Day Before Completion | Remaining balance, stamp duty, fees etc. | Your solicitor |
Final Tips
- Don’t pay anything until you’ve spoken with your solicitor.
- Always check that you’re sending your money to the correct account.
- If your plans change, reservation deposits might not be refundable—read the fine print!
- Ask your solicitor for a completion statement before completion so you know exactly what’s due.
Why Choose Parachute Law?
- Fixed Fee Quotes: Know exactly what you’ll pay.
- No Sale, No Fee: If your sale falls through, you’re protected.
- Lender Approved: We work with 99% of mortgage lenders in England & Wales.
- CQS Accredited: Our solicitors are recognised for quality and professionalism.
Ready to Make Your Property Move?
At ParachuteLaw, our expert property solicitors are here to guide you through every step of the process. Whether you’re buying, selling, or need legal advice, we provide clear, reliable, and efficient services to make your property journey smooth.
