A property option gives the holder the right to buy a property at a pre-agreed price within a set period. The option must be registered at Land Registry if it is to bind future owners. Used in development (to tie up land), lease options (rent with right to buy), and investment strategies.

• Option must be registered at Land Registry to bind third parties
• Option price can be fixed or formula-based (e.g. market value at exercise)
• Option fee (premium) is separate from the purchase price
• Exercise period: clearly define when and how the option can be exercised
• Stamp Duty: SDLT may be payable on the option fee and on exercise

Legal reference: Land Registration Act 2002; Law of Property Act 1925; Finance Act 2003 (SDLT)