Property Purchase Guide
Information in relation to the questions we are regularly asked at the outset of a property purchase.
We understand that for our most of clients the information that they need when they are first considering buying a property is:
- How much will it cost?
- How long will it take?
- What is included in the price?
- What do I need to do next?
We have set out answers to these questions below.
How much will it cost ?
Our fees cover all of the work required to complete the purchase of your new home, including dealing with registration at the Land Registry and dealing with the payment of Stamp Duty Land Tax (Stamp Duty) if the property is in England, or Land Transaction Tax (Land Tax) if the property you wish to buy is in Wales.
Our fees are based on the value of the property which is the subject of the transaction as this generally reflects the level of complexity of the legal work required. Whilst each transaction is different as a guide our fees for a purchase of less than £150,000 start at £460 plus VAT and our fees for a purchase of over £1 million start at £850 plus VAT.
In addition to legal fees there are additional expenses that we pay on your behalf in relation to a purchase – these are commonly referred to as disbursements. In a straight forward purchase we would normally expect that the following additional expenses would be payable :
- Search fees – on average £179 for the Local Authority Search, Water and Drainage Search and Environmental Search.
- HM Land Registry fee – this is dependant on the price payable for the property you are purchasing and whether the title deeds are registered at the land registry or not. This fee is normally between £20 – £230. Further details are available from the Land Registry at http://landregistry.data.gov.uk/fees-calculator.html. Or alternatively please contact us for a quote in relation to your specific transaction.
- Electronic money transfer fee £36 inc VAT.
- E-Conveyancing fee £36 inc VAT
- ID check fee £18 inc VAT
- Land Registry Search fee £5
VAT will be payable upon our legal fees at 20%, so for a purchase at under £125,000 our legal fees would be in the region of £552 inclusive of VAT.
For a purchase under £125,000 our average fees are therefore £945.99 inclusive of VAT, registration fees and search fees, excluding any Stamp Duty Land Tax that may be payable.
Factors that can increase the fixed fee payable for a purchase are:
- Using a Help2Buy ISA – solicitors charge a fixed fee of £50 plus VAT to cover the additional work required in releasing these monies;
- Leasehold property – as there is a large amount of additional work in relation to a leasehold property we may charge an additional fee. In addition the landlord or management company frequently charge a fee for providing information which may be payable by you depending on any agreement you make with the seller in respect of those fees.
Stamp Duty or Land Tax (on purchase)
Whether or not SDLT is payable and if so how much will be payable will depend on a number of factors, most importantly the value of the property you are purchasing. At the outset of our work for our clients we find out whether stamp duty is payable and if so how much will be payable. You can get a clear indication of the amount payable by using HMRC’s website or if the property is located in Wales by using the Welsh Revenue Authority’s website here.
In relation to a purchase at under £125,000, where no other property is owned anywhere in the world by any of the other purchasers on average the total fee, inclusive of stamp duty, would be £945.99.
How long will my house purchase take?
How long it will take from your offer being accepted until you can move in to your house will depend on a number of factors. As a general indication we would normally expect that contracts would be exchanged in relation to your purchase within 6 – 8 weeks of the initial purchase paperwork being received.
We keep our clients updated at all stages of their transaction and notify them as soon as we identify an issue that is likely to delay the moving date.
The length of time that a purchase can take depends on a lot of factors. The main issues that can cause a delay are :
- Leasehold Properties – as we need to obtain information from the Landlord and in most cases a management company this does slow down the transaction;
- Delay in mortgage offer being issued – in most instances we delay putting searches in place until the mortgage offer is received to avoid our clients paying for searches and then being unable to proceed if the mortgage application is refused. Therefore a delay in the mortgage offer can cause a delay in the purchase;
- Delay in the contract being created – there can be various reasons why the sellers solicitors are unable to issue a contract quickly, they may need instructions from more than one client, they may need to locate title deeds or the title may be complicated. We cannot start work on your purchase until the contract is received.
- Defects in the documents or legal title – if there is a problem with the legal title identified as part of our work in investigating the property on your behalf this can cause delays.
- Delays within the chain of transactions – where you are selling as well as buying, or your seller is buying as well as selling, all of the transactions in the chain will normally need to complete at the same time. Any delay in any of the transactions will therefore have a knock on effect upon your purchase.
Whilst most of these issues are to a large extent out of anyone’s specific contract delays can cause significant additional stress and worry. We keep our clients updated at all stages of their transaction and as soon as we identify an issue that is likely to delay the moving date we will notify them and discuss the likely length of the delay and any steps that can be taken to reduce the delay to an absolute minimum.
Where issues or difficulties within the process are likely to cause additional charges we will notify you immediately and obtain your consent before incurring additional fees.
What is included in the price
Our fixed fees cover all of the usual stages in a purchase. Whilst all transactions vary significantly our work will mainly include:
- Taking your instructions and giving you initial advice, including advice on SDLT payable;
- Checking how the purchase is to be financed and obtaining any additional information necessary;
- Receiving and advising on contract documents;
- Carrying out searches;
- Obtaining further planning documentation if required;
- Making any necessary enquiries of seller’s solicitor;
- Giving you advice on all documents and information received by way of a full property report;
- Reviewing with you the main features of your mortgage;
- Obtaining your signature on all of the necessary documents;
- Agreeing the completion date (date from which you own the property);
- Exchanging contracts and notifying you that this has happened;
- Arranging for all monies needed to be received from lender and you;
- Completing purchase;
- Dealing with payment of Stamp Duty/Land Tax;
- Dealing with application for registration at Land Registry;
- Reporting to you and if appropriate your lender once the process has been fully completed.
We will only raise additional charges where additional work is required that is in addition to the work required within a standard transaction. This might be where:
- You need additional documentation to record that you and your co-owner have unequal shares in the property;
- You need additional documentation to record monies that you have borrowed from a third party;
- You require advice and assistance to alter the title to the property after completion has taken place;
- You require specific additional advice in relation to SDLT payable on the transaction where you wish to consider steps to limit this expense;
- In leasehold transactions, where additional documentation is required by the Landlord or Managing Company which we are requested/required to prepare.
- Where problems are identified in relation to the properties title additional work may be required to remedy this issue. We would normally request that the seller meet any additional costs in this regard.
We will always discuss and agree with you any additional charges before carrying out any additional work outside of the work covered by our fixed fee.
What do I need to do next ?
To obtain a quotation of the fees and expenses likely to be payable in relation to your Purchase please click here. We will contact you to obtain additional information in appropriate and then provide a quotation. For additional information or to discuss your transaction with a member of our property team please do not hesitate to contact us. We will be happy to discuss your particular transaction and any queries you may have in relation to the process.