Conveyancing is the legal act of transferring ownership of a property from the seller to the buyer. The process begins upon an offer being made for the property, and ends when the house is purchased and the buyer receives the keys.
It’s important to have a good understanding of how it works, and the steps needed to push through completion.
Who is the conveyancing handled by?
Provided you are not taking out a mortgage, it is possible to handle the conveyancing process yourself. However, because it can be very difficult, it is commonly handled by a solicitor or conveyancer, to ensure the process goes smoothly.
It is probably best for you to try and avoid the conveyancer that the estate agent has recommended to you, as this is likely to be someone who takes commission as part of the agreement, and this may therefore end up costing you more.
Starting the process
After you find yourself a conveyancer or solicitor, you need to instruct them to perform the conveyancing process for you. They will draw up terms of engagement with you (or a draft contract), listing their charges and the necessary deposits.
Your solicitor will then get in touch with the solicitor used by the property seller, in order to confirm they are aware of the agreement and request a copy of the draft contract and any other relevant information.
Legality and checks
The draft contract and other documents will be checked over by your solicitor, who may raise any enquiries with their solicitor. You will be expected to go through a number of these forms yourself, in order to raise queries or objections to your solicitor.
One of the things that you will want to find out about the property you wish to purchase is whether it is leasehold or freehold. If the property is leasehold then you will want to check the length of the lease yourself, as there is no guarantee that this will be done for you. It can be problematic if the lease is less than 80 years, and it can be difficult to extend this period as it is costly and you need to have owned the property for at least two years to be allowed to extend it.
Your conveyancer will perform a number of legal checks, to ensure that there are no hidden issues that you should be made aware of. These searches will be tailored to the property itself, although there are a few that are applicable to all properties.
You will need to check the ‘title register’ and ‘title plan’, which are the legal documents required to prove ownership of a property. They cost £3 each from the Land Registry, and both checks are required by law before a house is bought or sold.
You can also get a flood risk assessment from the Land Registry, although if you were planning to get a full environmental check then it may not be worth paying for this separately.
It may also be worth paying for a water authority search (usually costing between £50 and £75), in order to find out where the property’s water supply is sourced and whether it is likely to be affected by any public drain works.
You are required to perform a Chancel repair search, in order to make sure that you are not required to pay for church repairs, and it costs £18. Additionally, you may decide to invest in Chancel repair insurance instead for around £20. In October 2013, the laws on Chancel repair charges changed, so now it is the responsibility of the Church to establish and lodge liability with the Land Registry.
An environmental report is used on the vast majority of transactions and is provided by either Groundsure or Landmark. The exact contents of this report will vary depending on which service your solicitor opts to use, but they tend to give details about contaminated land at or around the property, as well as plenty of other related information. The cost should be around £50 to £60 including VAT.
As part of the house buying processs, it is essential for you to get your mortgage sorted. This should be done early on, and should include making sure that your financial plans are solid, viable and affordable, as well as providing a mortgage deposit. A copy of your offer will be sent to your solicitor so that they can assess it and give detailed feedback to you before confirmation.
One of the first things you should do is get a mortgage valuation. Usually, this is done on behalf of the mortgage company, to ensure that the property is worth mortgaging, preventing them from wasting their money on a house that isn’t worth as much as may be charged. Normally, it will be up to you to pay for this valuation, but there is a small chance that it may be provided for free, as part of an attempt to garner more business for the lender.
Before contracts are signed, you will need to sort out buildings insurance for your new property. This is because the property becomes your responsibility as soon as the contracts are signed, so it is best to make sure you are covered immediately, just in case.
As soon as the draft contract was received by your solicitor, they will have been in contact with you to make sure that everything is covered; before signing the contract to purchase the house it is of vital importance that:
- All of your enquiries have been raised and dealt with
- The fittings and fixtures included are the ones that you wanted and expected
- A completion date has been agreed between the two parties
- Arrangements to transfer the deposit have been made, so that they payment is cleared and authorised by the time that the completion date arrives
A date will be arranged between you and the seller for the exchange of contracts, and it is most common for this exchange to be handled by your solicitor. Usually this involves solicitors from both sides reading the contracts over the phone (which is recorded) to ensure that both are identical, and the sides agree on the terms, before sending them to one another in the post.
Once contracts have been exchanged you have entered a legally binding agreement, and you must take full control of the house on an agreed date. This means that:
- Should you pull out for any reason, you will be required to pay the deposit that you had agreed
- The seller must sell the house, or they become open to lawsuits
- The seller is unable to accept any subsequent offers from others
What happens between the contract exchange and completion?
Your solicitor will lodge official interest in the property, which means that the deeds to the property are frozen for 30 working days, in order for you to complete payment and register the house as your own.
You will be sent a statement by your solicitor, telling you the full price of this stage of the purchase, which will need to be cleared into your solicitor’s bank account at least one day before completion.
Once the deal is completed there will be a few things left to take care of, for instance:
- Stamp Duty Land Tax will need to be paid
- Legal documents will arrive around 20 days after the solicitor has sent them off, following the completion
- You will need to send a copy of the title deeds to your mortgage lender, who will hold them until the mortgage has been paid off
- The freeholder will need to be informed if the property is leasehold
- A bill will be given for payment
The paperwork should be collected and compiled for your new home, including the estate agent’s brochure, ready should you decide to move again.
Equity Loan Mortgage Calculator
Whether you're a first-time buyer or already a property owner you could buy a new home with a small deposit of 5%, heres how.
How Help to Buy Equity Loans Work
- First time buyers and those already on the property ladder can apply.
- To qualify a 5% deposit is required.
- A 75% mortgage must be secured from your bank or building society.
- The remaining 20% of the property’s value is funded by an equity loan provided by the Government.
- House prices can’t be more than £600,000 in England and £300,000 in Wales.
Without Help to Buy
With Help to Buy
|Help to Buy Loan||£10,000||20%|
This calculator is provided to give you basic guidance only. This information is computer-generated and relies on certain assumptions. It has only been designed to give a useful general indication of costs. Its important you always get a specific quote from the lender and double-check the price yourself before acting on the information. We cannot accept responsibility for any errorsand recommend that you obtain exact figures from a specific lender before committing to any mortgage.