Exchange of contracts is the moment a property sale in England and Wales stops being an intention and becomes a legal obligation. Before it, either side can walk away for any reason and owe nothing. After it, walking away means losing your deposit and potentially being sued for the seller’s losses.
Three things happen at once. The completion date is fixed and becomes contractually binding. The deposit, usually 10 percent of the purchase price, is handed over. And responsibility for insuring the building typically transfers to the buyer, on a property they will not own or occupy for another week or two.
Quick answer: Exchange makes the sale legally binding and fixes the completion date. A deposit of typically 10 percent is paid, though 5 percent is sometimes negotiated. Buildings insurance normally becomes the buyer’s responsibility from exchange. Do not book removals, give notice on a tenancy or book time off until contracts have exchanged.
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Before and after, side by side
| Issue | Before exchange | After exchange |
|---|---|---|
| Walking away | Either side, any reason, no penalty | Buyer forfeits the deposit and may owe damages |
| Gazumping and gazundering | Both legally possible | Impossible, the price is fixed |
| Completion date | An intention that can move | Contractually binding |
| Buildings insurance | Seller’s responsibility | Usually the buyer’s, from the moment of exchange |
| Survey findings | Grounds to renegotiate or withdraw | Too late, you are committed |
| Booking removals | Premature and risky | Safe to confirm |
| Giving notice on a tenancy | Dangerous | The correct moment |
That middle column is the reason English and Welsh transactions feel so precarious. Everything you have paid for up to that point, the survey, the searches, the legal work, is at risk right up until the moment contracts are exchanged, and a meaningful proportion of agreed sales fall through before reaching it.
What has to be in place first
Your solicitor will not exchange until seven things are settled: the mortgage offer is issued, searches are back, enquiries are answered, the survey is resolved, the deposit funds have cleared, the contract is signed, and buildings insurance is arranged to start on exchange.
- A formal mortgage offer. Not a decision in principle. Your solicitor needs the offer document, and it must not be close to expiry.
- Search results returned and reviewed. The local authority search is usually the long pole, and turnaround varies enormously between councils.
- Enquiries answered satisfactorily. This is where most delay sits, because each round trip between solicitors takes days.
- The survey dealt with. Any renegotiation must conclude before exchange, since afterwards you have no leverage at all. Our guide to house survey costs covers which level suits which property.
- Deposit funds cleared in the solicitor’s account. Bank transfer limits and anti-money-laundering checks routinely add days, so start this early.
- The contract signed and returned. Signing is not exchanging. Your solicitor holds it until both sides are ready.
- Buildings insurance in place. Arranged to begin on the exchange date, not the completion date.
The deposit trips people up more than anything else on that list. Money sitting in a savings account is not the same as money cleared with your solicitor, and banks apply daily transfer limits that can turn a single payment into a four-day exercise. If any of it is a gift from family, the source-of-funds checks take longer again.
The insurance switch nobody mentions
Under the standard conditions, risk in the property passes to the buyer on exchange. If the house burns down between exchange and completion, the buyer is still contractually obliged to complete, and it is the buyer’s insurance that has to respond.
This surprises almost every first-time buyer, and it is the single most consequential detail on this page. You are insuring a building you do not own, cannot enter, and where someone else is still living. That is exactly what the standard contract requires.
Arrange buildings cover to start on the day of exchange. Tell the insurer the property will be occupied by the vendor until completion, because a policy taken out on the assumption you are living there may not respond correctly. Most insurers handle this routinely once told.
Contents insurance is different and starts from completion, since your belongings are not there until you are. Cover during the move itself is a separate question again, and our guide to home insurance during a move covers where the gaps sit.
Leasehold flats sometimes differ, because the freeholder insures the building through the service charge. Ask your solicitor to confirm the position rather than assuming either way.
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How exchange actually happens in a chain
Exchange is a telephone call between solicitors, not a meeting. In a chain, every transaction must exchange simultaneously, which is coordinated using standard Law Society formulae so that nobody ends up legally committed to a purchase without a matching sale.
There is no appointment and no ceremony. Your solicitor rings, contracts are exchanged verbally under an agreed formula, the call is recorded in an attendance note, and the signed contracts are posted afterwards. You will usually find out by phone or email within minutes.
The chain requirement is why exchange dates slip. A chain of five transactions can only exchange when all five are ready, and it moves at the pace of the slowest. One buyer whose mortgage offer has not arrived holds up four other households, none of whom have any way to influence it.
You will not be told a firm exchange date in advance, because nobody can promise one. What you can ask your solicitor is what is outstanding on your own transaction and what is outstanding elsewhere in the chain. Anything in the first category is worth chasing; the second is worth knowing about but not worth losing sleep over.
The gap between exchange and completion is negotiable. One to two weeks is typical, giving time to book removals and organise utilities. Same-day exchange and completion happens, usually where a chain has already been delayed, and it removes all planning time, so avoid it if you can.
What it costs to pull out afterwards
We looked at the financial consequences of failing to complete after exchange, because the risk is usually described as losing your deposit and it is broader than that.
| Scenario | What happens | Cost to the buyer |
|---|---|---|
| Completion delayed by a day or two | Notice served, interest accrues at the contract rate | Daily interest plus the other side’s costs |
| Notice to complete served | Typically 10 working days to complete | Interest, costs, and pressure |
| Failure to complete at all | Seller may rescind and keep the deposit | The full deposit, commonly 10 percent |
| Seller’s losses exceed the deposit | Seller may pursue the difference | Resale costs, further legal fees, price shortfall |
| Seller fails to complete | Buyer can serve notice and sue | Buyer recovers the deposit and may claim losses |
Two things are worth taking from that. First, on a £350,000 purchase a 10 percent deposit is £35,000, and that is the exposure created the moment your solicitor makes the call. It is why nobody should feel rushed into exchange before they are genuinely satisfied.
Second, delay is expensive even when it is short and even when it is not your fault. Removal vans that cannot unload, a chain that stalls on the day, or funds arriving after the banking cut-off all trigger the same machinery. That is a strong argument for a booked, confirmed removals slot rather than an informal arrangement, and for completing earlier in the day rather than later.
Scotland works differently. There, the binding point is conclusion of missives, which happens earlier in the process, and the concept of exchange as described here does not apply.
This is general information rather than legal advice. Contract terms vary, and your solicitor is the person to ask about your own transaction.
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When not to exchange yet
Do not exchange with unresolved enquiries, an unread lease, a survey issue you have not priced, or a mortgage offer close to expiry. Agents apply pressure to exchange because a sale is not safe until it happens, and that pressure serves their interest rather than yours.
Everyone in the transaction wants exchange to happen, and their urgency is genuine rather than cynical. It is still not a reason to commit before you are ready.
The specific things worth refusing to exchange over are missing building regulations sign-off on structural work, an unresolved boundary or access question, a short lease, a pending major works consultation on a flat, and any survey finding you have not obtained a contractor quote for. Each of those becomes solely your problem the second contracts exchange.
Equally, do not delay for things that will never resolve. Waiting for a seller to fix cosmetic issues, or for absolute certainty about a neighbour, holds up four other households and risks the chain collapsing. The test is whether the outstanding item could cost you money or prevent you from using the property.
And do a final inspection before completion rather than before exchange where possible, checking that fixtures listed as included are still there and the property is as expected.
How EcoGreen Movers fits around exchange
Exchange is the signal to book. Before it, a removals booking is a guess; after it, the completion date is contractually fixed and cannot move without both sides agreeing. EcoGreen Movers quotes on a fixed basis and holds dates, and we would rather take a booking the day contracts exchange than a provisional one three weeks earlier.
Because exchange and completion are often only a week or two apart, decide the service level before you get there rather than after. Standard is the loading and unloading, Standard Plus adds the furniture dismantled and reassembled, and Premium adds professional packing, which is the realistic option if exchange lands with days rather than weeks to spare. Boxes can be bought on their own during the wait, and storage covers a completion that moves after exchange by agreement.
We run residential moves across the UK, including London, Manchester and Edinburgh. For what happens on the day itself, see our guide to completion day, or get in touch for a quote.
Frequently asked questions
How long between exchange and completion?
One to two weeks is typical, and it is negotiable between the parties. Same-day exchange and completion is possible but removes all planning time for removals and utilities, so it is worth avoiding unless a chain has already been badly delayed.
How much deposit is paid on exchange?
Usually 10 percent of the purchase price, though 5 percent is sometimes negotiated, particularly for buyers with smaller deposits. The funds must be cleared in your solicitor’s account beforehand, which takes longer than people expect because of transfer limits and source-of-funds checks.
Can I still be gazumped after exchange?
No. Exchange fixes the price and binds both parties, so gazumping and gazundering both become impossible. That is precisely why the period before exchange feels so exposed, and why sellers and agents push to reach it quickly.
When does buildings insurance need to start?
On the day of exchange under the standard conditions, because risk in the property passes to the buyer at that point. Tell the insurer the seller will still be living there until completion, and confirm the position with your solicitor if the property is leasehold.
When should removals be booked?
After exchange, once the completion date is contractually binding. Booking earlier risks paying for or rearranging a date that moves, and giving notice on a tenancy before exchange risks having nowhere to live if the purchase collapses.
In summary: the line between hoping and knowing
Exchange converts an agreement into an obligation, fixes the completion date, takes your deposit and hands you the insurance risk. Everything you want to renegotiate must be settled before it, because afterwards there is no leverage left.
Get the deposit cleared early, arrange buildings cover from the exchange date, and treat exchange as the trigger for every other commitment: the removals booking, the tenancy notice, the time off work. Before that point, none of it is safe.
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