A guide to buy to let conveyancing
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.
Property purchases are complex transactions. Find out why the services of a buy to let conveyancing lawyer or conveyancer are an essential part of the process.
- About the conveyancing process
- About conveyancers
- Why you may need a conveyancer
- What a conveyancer does
In property law, conveyancing refers to the transfer of ownership (legal title) of land or real estate between individuals and other entities, such as companies. It can also refer to the process of registering a legal right to or interest in a property, such as that held by a mortgage lender.
Conveyancers will undertake local searches, conduct pre-contract enquiries, prepare the contract and oversee the exchange of contracts and ultimately the transfer of title to the new owner.
Most experts and practitioners estimate that the average length of the conveyancing process sits between eight and twelve weeks, though depending on external factors such as the length of a property chain, this timeframe can vary considerably.
When you conduct a property purchase, you will instruct either a solicitor or a licensed conveyancer.
Solicitors are often referred to in the context of a property transaction as conveyancing solicitors. They are regulated by the Solicitors Regulation Authority (SRA), registered with the Law Society and will undertake general legal work as well as conveyancing duties (though some may specialise in conveyancing work, or have more conveyancing experience than others).
Licensed conveyancers perform the same role as a conveyancing solicitor, but they are not qualified as general solicitors. Rather, they are specialists in (and undertake only) conveyancing duties and are trained and regulated by the Council for Licensed Conveyancers (CLC).
You will need to instruct a conveyancing professional when you buy, sell or transfer ownership of a share in a property or piece of land. This includes transferral of ownership to a limited company.
Conveyancing in Scotland and Northern Ireland
The CLC only licenses conveyancers in England and Wales. In Scotland and Northern Ireland, all conveyancing professionals are solicitors, and are regulated by separate societies:
Conveyancing in Scotland in particular is quite different to the rest of the UK. More information can be found later in this article.
- Property transactions in England and Wales only become legally binding when contracts are exchanged, and can often fall through before this stage due to complications and delays. Conveyancers can help the process go smoothly.
- Your conveyancer can help you to negotiate the draft contract and, if a survey reveals any structural defects in need of correction prior to the exchange of contracts, may be able to assist in negotiating the purchase price. (This will usually involve obtaining a quote for the remedial work and asking the vendor to deduct this from their asking price.)
- Your conveyancer will also be able to offer practical advice at various stages, such as whether a suggested completion date is feasible.
- If you are financing the purchase using a mortgage, it may be necessary to use a conveyancer. Some lenders insist that you instruct a firm from a pre-approved panel.
- Shortly after instruction, your conveyancers should send you confirmation of instruction (usually in the form of a welcome pack)
- They will then request the legal papers from the vendor’s conveyancers and begin requesting relevant searches:
- Land Registry searches (checking the title plan and title register, and obtaining an official copy of the title)
- Local authority search
- Water and drainage search
- Environmental search
- Depending on the area, they may also request non-routine searches, such as a coal mining report or chancel repair search
Before the exchange of contracts
Note: This stage may take a number of weeks, and is a good time to think about getting a survey. Though your lender will commission a valuation, this will not tell you as much about the condition of the property as a homebuyer’s report or full structural survey. The full structural survey is the more expensive option, but is recommended for older or listed buildings.
- Your conveyancer will examine the search results and contract and supporting documents that the vendor has sent them in order to confirm that there are no issues. They will raise any relevant concerns with the vendor’s conveyancer and, once they are satisfied with the findings and their search results, they will put together and send you a detailed property report.
- When your lender issues your mortgage offer, they will send a copy to your conveyancer, who will check it to ensure that the details are correct.
- At this stage your conveyancer will produce a financial statement that details for you the full sum that will be required from you at completion, how this was calculated, the mortgage money advanced and relevant retention costs, and the cost of instructing your conveyancer.
- You should now be ready to exchange contracts. You and the vendor (and any other parties involved in the chain) will agree upon a completion date, and contracts will be exchanged.
Note: At this stage you may also wish to organise buildings and contents insurance and ensure that it will be in place from the date of completion.
Before the completion of the transaction
- The exchange of contracts is the first major landmark in a property transaction. Your conveyancer and the vendor’s conveyancer will typically read out the contracts to one another during a recorded telephone conversation to make sure that they are identical, before posting them to one another. At this stage, the transaction is legally binding, so be sure that you have addressed any concerns highlighted in the property report or survey, have checked the mortgage offer and are happy to proceed.
- Your conveyancer will request the mortgage funds from your lender by submitting the certificate of title to them immediately after the exchange of contracts.
- They will also lodge an official search with the Land Registry to check that there have been no adverse additions to the title since the initial search, and freeze the title for a 30-day period to ensure that there are no more additions before the sale is registered.
After the completion of the transaction
Once the vendor’s conveyancer confirms that all of the needed funds have cleared, the vendor will hand over the keys and the transaction will complete. At this stage, your conveyancer will begin tying up loose ends.
- Your conveyancer will pay stamp duty land tax (SDLT) on your behalf.
- Following this, and the receipt of the deeds from the vendor’s conveyancer, they will register the transfer of ownership with the Land Registry.
- They will then send your mortgage lender the title information document. They will also send you a copy of the title information document, along with remaining documents that your lender does not require.
- If the property is leasehold, your conveyancer will inform the freeholder about the transfer of ownership.
- They will also send you a final bill for their services.
In Scotland, contracts are usually concluded far earlier than they are in England and Wales; typically, a legally binding agreement is created when the vendor accepts the buyer’s offer.
In addition, licensed conveyancers do not operate in Scotland. Conveyancing solicitors are typically more involved in the process of buying and selling property and will usually formally notify (‘note’) the vendor’s solicitor of the buyer’s intention to purchase.
If several buyers note their interest, the vendor’s solicitor will set a closing date for final offers, which should allow you time to get the needed finance in place. In a slow market there may be no closing date, potentially allowing you to negotiate the price.
There will then be an exchange of ‘missives’ – legal letters which negotiate the contract term by term – between both solicitors. The missives are concluded when all of the terms are agreed, and at this point, a binding contract is created.
More information on the process of buying a property in Scotland, and finding a solicitor to assist you, can be found on the Law Society of Scotland’s website: www.lawscot.org.uk.
When choosing a conveyancer, the chief concerns are:
- Cost: The fees charged by conveyancers and solicitors vary widely. The trick is to find a good service that still offers value for money.
- Efficiency and expertise: A good conveyancer will help a transaction go by as smoothly as possible, and their expertise in their field will enable them to achieve that.
- Professionalism: Conveyancers should be listed with the appropriate regulatory bodies (see ‘about conveyancers’ earlier in this article) and carry professional indemnity insurance
- Transparency: The fee you are quoted should be the fee that you pay. Ensure that each quote you obtain represents a fixed cost (not an hourly rate), fully itemises all disbursements and does not contain hidden charges.
Note: If you are financing the purchase with a mortgage, your choice of conveyancer will usually be limited to those on your lender’s panel.
All-inclusive and ‘no sale, no fee’ packages are available
Some quotes will be on a ‘no sale, no fee’ basis, meaning that you won’t pay legal fees if the transaction falls through (though you will still need to pay for disbursements that your conveyancer has incurred up to that point). As figures show that around 29% of sales fell through in 2015, this can be a reassuring feature for many buyers.
Other packages might be all-inclusive, meaning that the disbursements, expenses and legal fees are included in a single, fixed sum.
Always read the small print and compare each quote for the full cost, not just the basic fees.
Find a conveyancer experienced in buy to let transactions
Be sure that the conveyancer you choose has experience dealing specifically with purchases of property to let. They will bring your attention to anything that might prove an obstacle to your letting the property, such as leasehold covenants that prohibit letting or impose other restrictions on the usage of the property that may deter potential tenants.
Minimise delays in the local authority search process
Some local authorities can turn around requests for details in a matter of hours. Others will take weeks to respond to the same requests.
How quickly this process concludes depends more than anything on where the property is located; however, some conveyancers have methods that will help to minimise delays, such as online case-handling systems. Others may send someone from the firm to the local authority offices in person to chase requests and minimise postage costs and delays.
Conveyancers who make use of the National Land Information Service (NLIS) have access to the only indemnified electronic search hub in England and Wales, which offers direct access to information held by central government, local authorities and other official data providers, and may experience lesser delays than other firms.
Broadly speaking, there are three types of online conveyancing company.
Conveyancing factories are panel conveyancers that provide volume services to a number of estate agents. Factories can be cheaper than high-street firms, but have had something of a poor reputation in the past.
In a late 2012 report, The rise of ‘conveyancing factories’, the Legal Ombudsman noted that the “an increasingly commoditised [and] automated” market had led to the rise of online services and a concomitant increase in complaints for delays, hidden fees and service failure. Even with the property slump, residential conveyancing complaints were the second most common case handled by the ombudsman’s office in the 2011–12 financial year.
Critics note that conveyancing factories tend to be remote, sometimes based in call centres hundreds of miles from the property being purchased, and rely on inexperienced staff to process the large volumes of business.
Online conveyancing firms are, quite simply, the online equivalent of high-street conveyancing firms. Like high-street firms, the quality of service is variable. Unlike high-street firms, online specialists tend to be based in business parks rather than city centres; they therefore tend to be cheaper than high-street firms, if not the cheapest option available.
Online firms are often more experienced than factories, and like factories they tend to offer fixed, upfront quotes. You will often have contact with a single conveyancer or conveyancing team, but unlike a high-street firm, this will be via telephone rather than face-to-face. Online conveyancers therefore lack the personal touch of local firms, and may also lack some of the local contacts and expertise that can help to give their high-street counterparts an edge.
It could therefore be said that online firms offer a balance between the virtues and drawbacks of both conveyancing factories and high-street firms; be sure, though, to exercise as much caution when choosing one.
Conveyancing brokers are not firms themselves, but rather introducers for a number of specialist conveyancers who, in some cases, lack direct marketing experience. Brokers are a good way to find an inexpensive service – but not always the best.
Clearly, brokers are only as good as the firms they work with. The best will take great care when choosing their panel, selecting firms who show a high professional standard, are listed with the relevant regulatory authorities, carry the relevant insurance and are approved by the major mortgage lenders.
High-street conveyancing services
High-street firms often come recommended by local estate agents with whom they frequently do business. They offer face-to-face appointments and a regular point of contact to their clients. Because of the more personal service, as well as economies of scale – high street firms are usually smaller and more specialised than online alternatives – they tend to be more expensive.
A good high-street conveyancer may have local knowledge and contacts than online competitors lack, however. As with choosing any other type of conveyancing firm, perform your due diligence and search for positive recommendations, either from a friend or colleague or online, to be sure that you are getting the best deal.
Trust word-of-mouth recommendations
A recommendation from other local clients – particularly other landlords – can often be a solid indicator that a conveyancing firm is worth your business. This will not always provide the greatest cost savings, but a personal recommendation (so long as it comes from a trusted source) usually indicates that the service will be of a high quality.
- Having carefully selected your conveyancer based on cost and quality of service, instruct them as early as possible so that they are ready to begin conducting the legal work as soon as is necessary.
- Get direct contact details for the vendor at the property viewing. This way, if your conveyancer reports that they are having difficulty with the vendor’s, you have another avenue to chase them and expedite the purchase.
- Ensure that your conveyancer and all other professionals involved in the purchase (such as your mortgage advisor and surveyor) know that you intend to let the property.
- Be ready for each stage of the process by having all necessary documents and information collated and close to hand. Consider asking your conveyancer for an itemised list of what will be needed and when so that you can prepare, and avoid delaying the process any more than is necessary.
- If possible, have your mortgage agreed in principle before you make an offer. If you have found a property and would like to obtain a decision in principle, apply now for a mortgage or contact an advisor for free on the number above. (Click here to return to the top of the screen.)
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.