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

Although we have already written several posts about legal procedures when buying property in the UK, we feel that this topic deserves a bit more attention. In this article we look at the work of a solicitor or conveyancer, which is an important step on the way to buying your own home.

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 when the sale and purchase is completed.

This article describes the process in England and Wales; Scotland has a different system and its own property tax (Land and Buildings Transaction Tax).

What does a conveyancer do?

Conveyancing covers many tasks that your solicitor or conveyancer will handle. Among the most important of these are:

• Handling the purchase and sale agreement - both reviewing the documents and negotiating individual terms where needed;

• Dealing with HM Land Registry;

• Assessment of the legal status of the property - the conveyancer checks the title to the property and carries out local searches;

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

• Handling the payments for the property being purchased;

• Calculation and payment of Stamp Duty Land Tax in England and Northern Ireland (Land and Buildings Transaction Tax applies in Scotland and Land Transaction Tax in Wales);

• Providing legal advice.

As you can see, the list of tasks is quite substantial, which partly explains the cost of conveyancing.

Who can perform conveyancing?

Conveyancing is usually carried out by a solicitor or a licensed conveyancer, although you can carry out the work yourself - this is legally possible, but realistic mainly for cash buyers. Keep in mind, however, that if you are buying with a mortgage, your lender will almost certainly insist that a solicitor or licensed conveyancer acts on the purchase, usually one on its panel.

Doing your own conveyancing is also difficult and time-consuming - at each stage you will need to gather the necessary information very carefully, read through many pages of documents and contact the relevant authorities. Any legal advice you need will come at an additional cost.

Remember, too, that mistakes can be costly and time-consuming to put right - you may end up having to instruct a solicitor or licensed conveyancer anyway.

How much does conveyancing cost?

Conveyancing fees vary between firms and depend on factors such as those listed below. When comparing quotes, check whether they include VAT and disbursements (for example local searches and the Land Registry fee). The price of conveyancing depends on:

• Sources of purchase financing - buying with cash may mean slightly lower fees;

• The number of buyers - the more people who acquire title to a property, the more work there is for the conveyancer;

• Location of the property being purchased - fees can vary by region;

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

• The value of the property - some firms charge more for higher-value properties, and the Stamp Duty payable also changes;

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

• Participation in assistance schemes, such as shared ownership;

• Origin of the property - buying a house in the UK at auction can involve additional costs.

Separately from the conveyancer’s fee, you may have to pay Stamp Duty Land Tax if you buy in England or Northern Ireland. For a main home, for example, the portion of the price between £250,001 and £925,000 is charged at 5% (first-time buyers may pay less). Scotland has Land and Buildings Transaction Tax and Wales has Land Transaction Tax.

The conveyancing process step by step

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

1. Instructing a solicitor or conveyancer

At the very beginning, as a buyer you will instruct a solicitor or conveyancer to act for you and sign their client care (engagement) letter. The firm will carry out ID and source-of-funds checks and may ask how your mortgage arrangements are progressing. You will also likely make a payment on account to cover expenses such as local searches.

2. Preparation of documents

The seller’s conveyancer sends your conveyancer the draft contract and the property information forms. Your conveyancer reviews these documents and raises enquiries with the seller’s conveyancer about anything that needs clarifying.

3. Title and organisation of financial affairs

After receiving the necessary documents, your conveyancer will contact the seller’s conveyancer to settle the outstanding details. Most often these include which furniture is left in the property, the date when the keys will be handed over or the price.

Your conveyancer will also carry out local searches. Local authority, environmental and water and drainage searches can reveal known planning proposals, road schemes and how the property is connected to water and drainage.

You may also choose to commission an independent survey (for example a RICS Home Survey, such as a homebuyer survey report), which is separate from your lender’s valuation. It can be important in negotiations - any damage or defects it finds can be expensive to fix, and it is better to know about them before exchanging contracts. This is the stage that can take the longest.

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 sign the contract.

5. Exchange of contracts and completion

Once the contracts are signed and the buyer has paid the deposit, the conveyancers exchange contracts. At exchange the contract becomes legally binding, and the completion date is agreed and fixed. On completion, your conveyancer sends the funds to the seller’s conveyancer and the keys are released to you. The gap between exchange and completion is often around one to two weeks, but the parties can agree a different date.

How long does conveyancing take?

A straightforward conveyancing transaction may take around 12 to 16 weeks, but this is an indicative estimate, not a measured market average. A chain, searches, mortgage arrangements and leasehold issues can make it take longer.

Keep in mind, however, that this time is not spent solely on the legal aspects of the transaction. In parallel, our credit advisors will be dealing with the topic of financing your new home.

Summary

Conveyancing is the legal work involved in transferring ownership of a property, and it is usually carried out by a solicitor or licensed conveyancer, which your mortgage lender will almost certainly require. The process runs from instructing a conveyancer through searches and enquiries to exchange of contracts and completion, and the time needed varies with the transaction. Around 12 to 16 weeks is an indicative estimate for a straightforward case, not a measured market average.

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. During the consultation, we can discuss your questions, review your circumstances and explain the mortgage options that may be available. Any estimate of borrowing is subject to the lender’s assessment.