What is conveyancing and what do you need to know about it?

Although we have already written several posts about legal procedures in the context of buying property in the UK, we feel that this topic still deserves a bit more attention. Therefore, in today’s article we will look at the work of a solicitor, which is an extremely important step on the way to your own four walls.

What is conveyancing?

As Equifax notes, conveyancing is a legal procedure carried out when property ownership is transferred between a seller and a buyer. It begins when the seller accepts the offer and ends with the entire sale and purchase transaction.

How does conveyancing work and what is it about?

Under this broad term, there are many activities that your lawyer will undertake. Among the most important of these are:

• Handling of the purchase and sale agreement - here we mean both the drafting of documents and the possible negotiation of individual provisions;

• Land Registry handling;

• Assessment of the legal status of the property - the solicitor checks the ownership status of the house, reviews local zoning plans;

• Analysis of the loan contract - sometimes our clients ask their lawyers to evaluate the contract proposed by the bank;

• Implementation of payments for the property being purchased;

• Calculation and payment of Stamp Duty Land Tax;

• Providing legal advice.

As you can see, the list of tasks is quite substantial and in some sense explains the prices of legal services, which unfortunately are not very low.

Who can perform conveyancing?

Conveyancing can be outsourced to a specialist (solicitor or coneyancer), as well as you can carry out these activities yourself. Keep in mind, however, that many banks will not be willing to cooperate with you and will demand that you hire a licensed attorney for this purpose.

We should also add that the conveyancing process on your own is extremely difficult and time-consuming - before each stage you will be forced to gather the necessary information very carefully, paging through many pages of documents and contacting authorities. Any legal advice will, of course, be at an additional cost, which is likely to reduce your savings.

Remember, too, that if you make a mistake, you could face very large financial consequences as a result - you may find it necessary to hire a lawyer, and then, the bill will be as much as several thousand, rather than a few hundred pounds.

How much does conveyancing cost?

From 700 to as much as 5 thousand pounds. The price of conveyancing depends on:

• Sources of purchase financing - buying with cash translates into a bit lower fees;

• The number of buyers - the more people who acquire title to a property, the more work awaits the lawyer;

• Location of the property being purchased - legal services in large cities are more expensive;

• The ownership status of the property - leasehold translates into a more complicated legal situation, which of course makes the transfer of ownership more difficult;

• The value of the property - conveyancing when buying or selling more expensive houses will be correspondingly more expensive, and the amount of tax charged will also change;

• Lender - not every conveyancer or solicitor is able to work with every bank;

• Participation in assistance programs, such as shared ownership;

• Origin of the property - buying a house in uk at auction involves additional costs.

Realistically, for conveyancing when buying a house worth £250,000 it will cost you between £850 and £1300. The cost will increase significantly if you opt for a more expensive property - every pound of house value between 250,001 and 900,000 is taxed at a rate of 5%. You can read more about this in our article “What is stamp duty land tax?”.

How does conveyancing work?

Let’s now discuss the conveyancing process step by step.

1. Instructions - drafting the power of attorney and introducing the solicitor to the case

At the very beginning, as a buyer you will have to authorise a conveyancer or solicitor to represent you. The lawyer may also ask you about the origin of the money and ascertain the progress of the organisation of credit matters. You will also likely pay a deposit for expenses, such as reviewing municipal documents. This stage may take you between 1 and 7 days.

2. Preparation of documents

Your lawyer will contact the seller or their solicitor to obtain all the key information about the property under contract. Once this is done, the solicitor will be able to draft the contract and then send it to the existing homeowner to finalise any details. Typically, a week to three is required for this stage.

3. Title and organisation of financial affairs

After receiving the necessary documents, your conveyancer will contact the seller’s lawyer for negotiations. Most often, the issues of handing over the furniture, the date when the keys to the property will be issued or the price will be determined.

The lawyer will also look into the Local Authority’s records, make sure that all utilities (water, electricity, gas) are connected to the property. It is at this stage that the conveyancer should make sure that no expressway, waste processing point or other development will be built in your neighborhood, which could significantly reduce the value of the property.

In most cases, as a buyer, you will also commission a homebuyer survey report, which can be important in negotiations - detected damages or technical errors can generate huge costs in fixing them, and it is better to be aware of their existence before exchanging contracts. It is this stage that can lengthen the most, however, usually, it lasts from 2 to 6 weeks, and in extreme cases even 3 months.

4. Signing documents

After becoming familiar with the legal and technical status of the property, the buyer must make a final decision on the purchase - if it turns out that the house is in a terrible state of repair or its legal situation is unregulated, this is the last moment to back out.

If everything is in order with the property, the parties can proceed to the conclusion of the agreement. Usually, this stage takes from a few days to two weeks.

5. Exchange of contracts and completion

Once the contracts are signed and the buyer delivers the deposit, there will be a final approval of the transaction through the exchange of signed documents, and then the parties will set a completion date - this is the day when your solicitor will transfer the money to the seller. The sealing of the transaction is the ceremonial handing over of the keys to the house. Typically, completion and exchange of contracts will take one to two weeks.

How long does conveyancing take?

Adding the time ranges we have given you, you will get from about 5 to even 14 weeks. As a mortgage broker, we have done our research and over the course of several hundred mortgage applications we have carried out, we have obtained a score of 8.5 weeks - realistically, it just takes about 2 months to deal with all the legal matters.

Keep in mind, however, that the aforementioned 2 months will not be devoted solely to handling the legal aspects of the transaction. In parallel, our credit advisors will be dealing with the topic of financing your new home.

Summary

Since you have reached the end of this article, you are probably planning to buy a property in the UK. If you haven’t chosen your mortgage broker yet, we cordially invite you to a completely free and no-obligation meeting. Within an hour we will answer all your questions, check your creditworthiness and see what kind of property you can buy with your current earnings. Don’t wait - take a step towards financial freedom today!