Pre-Contract Deposit Process

Register for the service

The PCD service is only available through approved and registered estate agents who have completed our training programme to ensure that they can clearly explain this new transaction process to buyers and sellers.

Prospective buyers and sellers are normally asked by their estate agent to register with the Pre-Contract Deposit service before they have found a property to buy or agreed the sale of a property. By registering with the PCD service at this very early stage, they are demonstrating that they are committed to either buying or selling a property and will be willing to transfer a deposit as soon as a transaction is agreed.

Estate agents can then confidently promote a client’s property for sale or recommend a purchaser.

Transfer of deposit and fees

As soon as a sale is agreed both the buyer and seller transfer a deposit that is held by the Pre-Contract Deposit Company. The deposit is normally 1% of the agreed purchase price, subject to a suggested minimum of £2,000 or maximum of £10,000.

Lower deposits can be made with the agreement of both parties but both parties need to agree to the same amount.

All deposits are held in a secure Lloyds Bank Client Account and are protected by £1 million professional indemnity insurance from Chubb Insurance.

Property value

Seller Deposit

Buyer Deposit


up to £200,000




£200,001 to £1,000,000

1% of property value

1% of property value


over £1,000,000




The PCD fee structure is simple, clear, affordable and has the potential to save buyers and sellers a considerable amount of time and money. Both the buyer and seller pay a fixed fee of £245 + VAT when deposits are transferred.

If one party transfers their deposit and fee and the other party does not then the fee and deposit are returned in full and the Pre-Contract Deposit Company has no further involvement in the transaction.

If necessary, a deposit can be transferred to a solicitor before legal contracts are exchanged but we will require confirmation from the solicitor that this deposit will be held until unconditional exchange takes place.

Communication during the transaction

We encourage buyers and sellers to use the PCD website to communicate with each other during the legal process until contracts are exchanged.

According to research by the Government Department for Communities and Local Government, 33% of buyers and 46% of sellers were concerned that the other party would pull out.

Communicating directly with the other party during the process will re-assure them that the transaction is progressing and if there are delays then these can be quickly and easily overcome if there is an open channel of communication.

Personal contact details are never divulged to the other party or to any party outside the transaction and are not used for marketing purposes.

All messages sent during the transaction process are strictly confidential and can only be viewed by the parties within the transaction, their estate agent and the PCD administration team.

What happens when legal contracts have been exchanged?

The PCD service significantly reduces the number of transactions that fail by helping to ensure that both parties are equally committed at an early stage.

Once binding legal contracts have been exchanged the deposits are returned to the buyer and seller within two working days.

What happens if one party withdraws from the transaction?

If one party withdraws from the transaction they need to demonstrate that they had a justified reason to have withdrawn.

Every case is different so we do not publish a full list of ‘justified’ reasons but, for example, if a chain breaks, someone loses their job or a survey highlights previously unknown problems with the property then these would be justified reasons.

Everyone’s view of what might or might not be a justified reason is different so we have a very simple rule.

The party that has withdrawn from the transaction needs to demonstrate that their personal circumstances changed unexpectedly and beyond their control or new information was provided about the property they were buying which meant they were unable or unwilling to proceed.

PCD administrators will liaise with both parties to guide them through this process and reach an agreement.

If it is accepted that the reason for withdrawing was justified then the deposits are returned and no compensation is paid.

If it is agreed that one party was at fault then the withdrawing party forfeits 25% of their deposit to the other party and if that party’s out-of-pocket costs are more than 25% of the deposit then they can claim additional compensation.

We make sure buyers and sellers are not out of pocket if the other party withdraws without a justified reason.

Claiming compensation

Carefully trained PCD administrators will liaise with both parties throughout the compensation process. All communication is conducted through the website and the parties have no direct contact with each other.

Out-of-pocket costs can be claimed for legal fees, building surveys, bank or building society mortgage application fees and PCD fees. These costs can relate to the transaction in question and any other associated transaction if it can be proven that costs have been incurred as a direct result of the other party pulling out. For example, if someone is selling a house and buying another house and their buyer pulls out then a claim can be made for costs incurred for both their sale and their purchase if their purchase fell through as a direct result of their buyer pulling out.

Other costs such as rent, storage, loss of income or interest can only be claimed in exceptional circumstances if it can be proven that these costs were only incurred because the sale/purchase had been agreed.

When agreement is reached the deposits are returned and any compensation for out-of-pocket costs is paid.

The maximum amount of compensation that can be claimed is limited to the deposit held.


When a sale falls through, it is a stressful time so PCD administrators will work quickly and sympathetically with both parties to find a fair and acceptable solution.

It is very rare that we are unable to reach an agreement and arbitration is the last resort. However, if the parties are unable to agree who is at fault or the amount of compensation due then the case is referred to an independent Arbitrator.

We employ a panel of three independent, professional arbitrators who are selected on a rotation basis. They all have industry-relevant experience in either conveyancing or property surveying.

Both parties are given the opportunity to submit a further statement to the Arbitrator to support their claim. We may also conduct further investigation into claims made by either party.

The Arbitrator will review these statements, all previously submitted information and any evidence from our investigations and will then make a final ruling.

This ruling cannot be challenged and there is no appeal process.

The deposits are returned and any compensation for out-of-pocket costs is paid as ruled by the Arbitrator.