We understand that moving home can be one of the most exciting times of your life. Yet at the same time, it can also be one of the most stressful. With it, can be a lot of questions and conveyancing terminology that makes the mind boggle.
So, we thought we’d share with you all of the FAQs we’re often asked…
What is Conveyancing?
Conveyancing is the name given to the various processes that your property solicitor will undertake between your offer being accepted and the moment when you are handed the keys to your new home. Two crucial stages here are the exchange of contracts and completion, but there many steps to be taken during conveyancing.
- requesting the contract from the seller’s solicitor
- applying for searches
- reviewing the various results and negotiating with the seller’s solicitor
- exchanging contracts
- finalising the mortgage
- final searches
- applying for the property deeds
What is the Conveyancing process?
Whether you are selling or buying a home, it’s a good idea to know what is involved, and to understand how the Conveyancing process works.
So, what are the various stages of the process, and what kind of time should you expect each to take? Take a look here in our Buying a House infographic and Selling a House infographic.
What type of property searches take place?
As a buyer, an essential part of the conveyancing process is for you to obtain searches, to ensure the property is not adversely affected by anything not obvious. A variety of searches may be needed, some specific to a location, but the most common are:
- Environmental search – checks for flooding predictions, ground stability, contamination hazards, the presence of landfill sites etc.
- Local authority searches – checks for planned projects that may affect the property, from buildings overlooking it to new roads that may involve compulsory purchase.
- Water and Drainage Search – checks that the property is connected to water and sewerage.
- Land Registry searches – the title register and title plan will confirm the seller’s right to sell the property.
Your solicitor will then review the search results and the mortgage offer. If any enquiries arise affecting the draft contract, the seller’s solicitor will respond to them at this stage.
What is the Help to Buy Scheme?
The government’s Help to Buy scheme consists of two main forms: Help to Buy loans and Help to Buy Individual Savings Accounts (Isas).
The current Help to Buy scheme runs out in 2023, and the government is understood to be reviewing whether to continue it and in what form. There may well be some comparable scheme after then, but there is no guarantee that it will offer as favourable terms.
Help To Buy Loans
In the Help to Buy loans, the government offers the buyer a loan of 20% of the cost (40% in Greater London) towards a newly built property. This means that, instead of either having to find 25% as a deposit, or negotiate a 95% mortgage, buyers only need a 5% deposit and a 75% mortgage to buy it.
Though principally targeted at first-time buyers, this is available to anyone who wishes to buy a new-build property as their primary home. It only applies to properties below a set value — this is £600,000 in England and less in other parts of the UK.
For example, if you were buying a house for £200,000, you would only need to find a deposit of £10,000 (5%) and arrange a repayment mortgage for £150,000 (75%). The remaining £40,000 (20%) would be covered by the Help to Buy loan.
Repaying the loan
The Equity Loan is not repayable until you eventually sell the house, although you may choose to repay it early. For the first five years, you pay nothing but an annual management fee of £12 – after which you start paying the interest.
This is currently set at 1.75% per annum for year six, after which it will rise by 1% of the interest amount plus inflation based on the Retail Price Index (RPI). In other words, on your £40,000 loan, you would pay £712 for year six (including the management fee). For year seven, this would increase to £719 + RPI (1.75% + 1% increase + RPI).
If you sell the property for £210,000, for instance, you would receive £168,000, from which to repay what was left of the mortgage, and you could use the remainder as a larger deposit for your next home. You would repay 20% of the sale cost, which would be £42,000.
Help To Buy: Isa
The Equity Loan is the most significant offer which the government makes under the Help to Buy scheme, but there are others.
The Help to Buy Isa was launched later, in December 2015, and is open to first-time buyers in the UK. This is available from a range of banks, building societies and credit unions.
With a Help to Buy: ISA, the government will contribute 25% of what you save yourself, as long as you have deposited at least £1,600 in the ISA. The maximum they will contribute is £3,000 – if you save £12,000.
A Help to Buy: ISA is available to each first-time buyer, whether they are buying on their own or jointly. Therefore, if you are planning to buy with a partner, you could each have a Help to Buy: ISA and therefore receive up to £6,000 from the government between you.
The government bonus will be paid when you are buying your home, and must be requested by your solicitor, to be included in the consolidated funds for completion. For this reason, the bonus cannot be used for your deposit.
What is Shared Ownership?
If you are unable to afford a mortgage for the full price of a property, you have the option of the government’s Shared Ownership scheme. Under this, you can buy a share of the property (anywhere between 25% and 75%) and rent the remainder, with the option of increasing your share later.
To qualify for this scheme, you must not currently own a property. The only exception is if you are already in a Shared Ownership arrangement and wish to move. In addition, you must have a total household income of less than £80,000 (£90,000 in London).
A variant of this scheme is the Older People’s Shared Ownership scheme, available to people from 55 upwards. This works in much the same way, but with a maximum cap ownership of 75%. At this percentage, you are not required to pay rent on the remaining 25%.
How long does it take to buy a house?
On average, the process could take between 8 to 16 weeks, but this is dependent on a number of factors. In particular, it depends on how quickly both solicitors involved perform their tasks. If either the solicitor you have chosen or the seller’s solicitor is overloaded with work, each step could take a good deal longer.
However, even if both solicitors are working efficiently, delays could come from elsewhere. The seller is required to produce a number of documents, and these could be more difficult to find in some situations than in others. For instance, if the seller has lived in the property for a long time, crucial documents may have been mislaid — or the seller could simply be unorganised.
Another potential source of delay comes with the requests for searches. These include local authority searches, to identify any plans that might affect the property, Land Registry searches, to establish the seller’s right to the property, and environmental searches to check for potential hazards in the immediate area. Any or all of the agencies involved could take longer than normal to respond.
The results from the searches will also affect the amount of time required. If serious issues are raised (e.g. risk of flooding or planning permission for a project affecting the property) this is likely to require further negotiations, both between the solicitors and perhaps also involving the mortgage lender.
Choosing the right Conveyancing solicitor
As we have seen, serious delays can affect buying a house that have nothing to do with your solicitor’s performance, although your solicitor can apply pressure on the other parties, if required. However, what can be said with certainty is that a poor choice of solicitor is highly likely to add time to the process.
You should be looking for a firm with a dedicated Conveyancing team. Your initial enquiries may give you an idea of whether they are going to have enough time to devote to your Conveyancing. If, for instance, they seem to be having a problem fitting you in for an initial appointment, that may suggest they are overwhelmed.
How we can help
Moving home is renowned for being a stressful time, but we are here to show you that it doesn’t have to be that way. Our award-winning Conveyancing team are specialists in their field and are known for being excellent communicators. The team offer fixed-fee Conveyancing, meaning there’ll be no hidden cost surprises and all-important flexible appointment times to suit you.
Contact our expert Conveyancing solicitors today for a free quotation, or for information, on 01525 378177, or online.
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