Category Archive: conyancing
Energy Performance Certificates have been a familiar feature of buying, selling and letting property in England and Wales for over fifteen years. Following the publication of the Warm Homes Plan on 21 January 2026, the rules governing EPCs and the minimum energy-efficiency standards that accompany them are set for their most significant overhaul in more than a decade.
This article examines what is being proposed, where things currently stand in law, and what the changes are likely to mean for landlords, homeowners and prospective buyers.
Where things stand today
The current legal position has been in place for several years. Under The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, private rented properties must have a minimum EPC rating of E. This requirement has applied to new tenancies since April 2018 and to all existing tenancies since April 2020. Where works are needed to bring a property up to standard, landlords are currently required to spend up to £3,500. Penalties for non-compliance are capped at £5,000 per property per breach.
EPCs are produced using the Standard Assessment Procedure (SAP), which assigns a single A-G rating based largely on the estimated cost of running the property.
The proposed EPC C target by 2030
Under the Warm Homes Plan, the government has confirmed that all privately rented homes in England and Wales must achieve an EPC C, or its equivalent under the new system, by 1 October 2030. This is a single deadline that applies to both new and existing tenancies. The earlier proposal for a 2028 deadline for new tenancies has been dropped.
The cost cap for required works will rise to £10,000 per property, and the maximum penalty for non-compliance will increase to £30,000 per property per breach. To encourage early action, landlord expenditure on relevant energy efficiency improvements from 1 October 2025 will count towards the £10,000 cap. If a property cannot meet the standard within the cost cap, a 10-year exemption may be registered.
It is worth clarifying that, although these proposals are now firmly set out as government policy, the secondary legislation that will amend the minimum energy efficiency standards is expected to be laid before Parliament in 2027. Until then, the current EPC E minimum, the £3,500 cost cap and the £5,000 maximum penalty remain in force.
A new way of producing EPCs
Alongside the new minimum standards, the government intends to replace SAP with a new methodology called the Home Energy Model (HEM). New-style EPCs will display four headline metrics: fabric performance, which measures how well the building retains heat through insulation, glazing and airtightness; heating system, which measures the efficiency and carbon impact of how the property is heated; smart readiness, which measures the property’s capacity to support microgeneration, such as solar panels combined with a smart meter or energy storage; and energy cost, which indicates the estimated annual running cost.
The government has consulted on a dual-metric standard. Under the proposal, a property would first need to meet a fabric performance standard, then either the heating system or the smart readiness standard, with the energy cost metric remaining on EPCs for information only. The Home Energy Model consultation on EPCs closed on 18 March 2026, and the government response, which will set out the precise band boundaries for each metric, is still awaited.
The launch of the new EPCs has slipped in recent months. In a recent update, the government confirmed that the new system will not go live until the second half of 2027.
Properties with a current-system EPC C, achieved before 1 October 2029, are intended to be treated as compliant with the new standard until that EPC expires. This provision is one reason some landlords with borderline D-rated properties may consider acting under the existing methodology while it remains available.
Wider EPC changes
A number of other changes are proposed. An EPC would be required when a property is first marketed for sale or rent, removing the current 28-day grace period. The EPC requirement would apply to whole houses in multiple occupation, not just where individual rooms are let, and to short-term lets. The current exemption for listed and other heritage buildings is set to be tightened, although the government has acknowledged the need for tailored exemption pathways for properties where standard improvements are not appropriate. The existing 10-year EPC validity period will continue under the new regime.
Funding and support
The Warm Homes Plan is backed by up to £15 billion in public funding, some of which is channelled through existing schemes. The Boiler Upgrade Scheme, for example, currently offers grants of up to £7,500 towards the cost of installing an air- or ground-source heat pump. Other support is provided through local authority schemes and is targeted at lower-income households. Landlords and homeowners considering improvement works should check what may be available before committing to a specification.
A brief note on commercial property
Commercial minimum energy efficiency standards follow a separate trajectory from the residential regime. The Warm Homes Plan focuses on private and social rented housing, and government policy on commercial standards is less developed. Owners of mixed-use portfolios will need to consider both regimes carefully and should seek specific advice rather than assume that the timetable for residential reform will align with that for commercial property.
What to do now
For landlords, the first step is a clear-eyed review of each property’s current EPC rating in the portfolio. Properties already at C or above are likely to be in a good position, particularly if a current-system C can be secured before 1 October 2029. Properties at D or below will need a longer-term plan, and landlords would be well advised to keep detailed records of any energy-efficiency spend from 1 October 2025 onwards.
For homeowners considering selling, the new EPC format will start to appear from late 2027 and may present the property in a different light compared with its existing rating. For prospective buyers, the existing EPC remains a useful guide, but it is worth understanding where a property sits under the new metrics if you intend to let it in future. General guidance for tenants and homeowners is also available from the Energy Saving Trust.
If you are planning a property transaction or letting during the period covered by these reforms, do get in touch with your solicitor, who will be able to advise on how the changes affect your particular circumstances.
In a housing market where mortgage rates can shift on global headlines and property chains remain painfully fragile, homeowners are being urged to get “move ready” before putting their property on the market or starting their property search.
The call comes as the property sector pushes for faster and more streamlined conveyancing amid wider economic uncertainty. Major lenders and property businesses are investing in digital systems designed to reduce delays, cut fall-through rates and speed up transactions.
A government-backed open property coalition is working to accelerate the digitisation of homebuying, while Nationwide recently became the first lender to accept e-signatures. Lloyds is among the latest to announce an initiative focused on gathering key information earlier in the process and improving how data is shared between parties.
Conveyancing specialists say these changes reflect growing recognition that the traditional homebuying process can be frustratingly slow, particularly at a time when buyers and sellers are watching mortgage rates and household costs closely.
Recent geopolitical tensions, including concerns over oil prices and global market stability, have added to uncertainty. Alongside, the spring and summer months traditionally see increased activity in the housing market, which can place additional pressure on all parties involved in a chain.
A significant proportion of property transactions fall through before completion, often because issues emerge late in the process. Missing documents, delays obtaining searches, identity checks or uncertainty around funding can all create hold-ups.
“With ongoing worries about inflation, interest rates and the wider global economy, many
buyers and sellers want greater certainty and fewer roadblocks when they move,” said Dawn Cherry, property law specialist with Rotherham Town-based Firm Oxley & Coward Solicitors LLP. “There’s a growing recognition that those who are better prepared are more likely to avoid delays later in the transaction, which is leading to more ‘vetting’ of potential buyers and sellers before agreeing to a sale or purchase.”
Many organisations across the property sector are working collaboratively to modernise the process through greater use of digital technology, earlier verification checks and improved information sharing. However, lawyers stress that technology alone is unlikely to solve every problem.
“Digital improvements are welcome and can certainly help reduce duplication and administrative delays,” Dawn Cherry explained. “But preparation remains key. Sellers who gather documents early, so paperwork is ready before a buyer is found, and who respond promptly to enquiries and potential issues, are generally in a much stronger position.”
Buyers can also help avoid unnecessary delays by ensuring mortgage agreements are in place, having proof of funds readily available and instructing their solicitor and dealing with identity verification at an early stage.
“It’s welcome that we are seeing these moves towards making moving home smoother and less stressful,” added Dawn Cherry. “The government promised a homebuying ‘shake up’ last October but for now, to avoid hiccups along the way, proactive steps early on are the best option.”
[This is not legal advice; it is intended to provide information of general interest about current legal issues.]
As the UK marks National Conveyancing Month in March, it is a timely opportunity to highlight the vital role conveyancers play in buying and selling property. Purchasing or selling a home in England and Wales involves far more than agreeing on a price and collecting the keys. A conveyancer plays a central role in ensuring the transaction is legally sound, properly documented, and completed without unnecessary risk or delay. From conducting legal checks and managing contracts to handling funds and registering ownership, your conveyancer protects your interests at every stage of the process.
Buying or selling property in England and Wales can seem deceptively straightforward from the outside. Once an offer is accepted, many buyers and sellers assume it is simply a matter of waiting until completion. In reality, a significant amount of legal and administrative work takes place behind the scenes. Your conveyancer manages the process from start to finish, ensuring that ownership is transferred correctly and that there are no hidden issues that could cause problems later.
Carrying Out Legal Checks and Due Diligence
One of the most important parts of a conveyancer’s role is investigating the property and its legal status. For buyers, this involves conducting a series of searches and checks to identify issues that may affect the property’s value, use, or future saleability.
These typically include:
- Local authority searches, which reveal matters such as planning permissions, building regulations, proposed road schemes, and enforcement notices.
- Environmental searches, which highlight risks such as flooding, subsidence, or contaminated land.
- Water and drainage searches, confirming whether the property is connected to mains services and who is responsible for drainage.
Your conveyancer will also review the title documents held by HM Land Registry to confirm ownership, boundaries, rights of access, and any restrictions or covenants affecting the property. For sellers, this stage involves providing accurate information and responding to enquiries raised by the buyer’s conveyancer.
Managing Contracts and Legal Documentation
Conveyancers are responsible for drafting, reviewing, and negotiating the contract for sale. This ensures that the legal documentation reflects the parties’ agreement and that appropriate protections are in place.
For buyers, this means checking that the contract accurately describes the property, the purchase price, and any special conditions. For sellers, this means ensuring obligations are clear and achievable. Once both parties are satisfied, the conveyancers handle the exchange of contracts, which makes the property transaction in England and Wales legally binding.
Handling Money and Financial Arrangements
Property transactions involve significant sums of money, and conveyancers play a key role in ensuring they are managed safely and correctly. They liaise with mortgage lenders, review mortgage offers, and ensure that funds are available when required.
A conveyancer will also:
- Calculate any Stamp Duty Land Tax due
- Arrange payment to HM Revenue and Customs
- Receive and transfer completion funds between parties
On completion day, your conveyancer ensures that the purchase price is paid, any existing mortgages are redeemed, and the transaction completes in accordance with the contract.
Acting as the Central Point of Contact
A conveyancer coordinates communication among all parties involved in the transaction. This usually includes buyers, sellers, estate agents, mortgage lenders, and other solicitors or conveyancers in the chain.
They keep the transaction moving, explain legal issues in plain English, and provide updates so clients understand where things stand. This coordination is particularly important when there is a chain of linked transactions or when issues must be resolved promptly.
Completion and Registration
Completion is the final legal step in the transaction. Your conveyancer oversees the release of funds, confirms completion, and ensures the keys are handed over to the buyer.
After completion, the conveyancer registers the change of ownership with HM Land Registry and ensures that any mortgage is properly recorded. This step is essential because legal ownership is not fully updated until registration is complete.
Who Can Act as a Conveyancer?
In England and Wales, conveyancing work can be carried out by:
- Solicitors who specialise in property law
- Chartered legal executives with property expertise
- Licensed conveyancers, who focus exclusively on property transactions
Whichever route is chosen, the conveyancer must be properly regulated and experienced in residential property transactions.
Why Instruct a Conveyancer?
A conveyancer does far more than process paperwork. They identify risks, protect your legal position, and guide you through a process that can otherwise be stressful and confusing. Whether you are buying your first home or selling an existing property, professional advice can help avoid delays, unexpected costs, and legal complications.
If you are planning to buy or sell a property in England and Wales, it is sensible to speak to your solicitor or conveyancer at an early stage to understand the process and obtain advice tailored to your circumstances.
When buying a home in England, one of the first things you will come across is whether the property is being sold as freehold or leasehold. These terms describe the type of ownership you are acquiring and carry significant differences for homeowners.
What is Freehold?
If you purchase a freehold property, you own both the building and the land it stands on outright. Your ownership is not limited by time, and you are responsible for the upkeep of the property and the land.
Freehold is generally considered the most straightforward form of ownership, as there is no landlord or ground rent to pay. Most houses in England are sold as freehold, although there are exceptions.
What is Leasehold?
A leasehold property means you own the right to live in the property for a fixed number of years, decades, or even centuries (leases are commonly granted for 99, 125, or 999 years). The land itself remains owned by the freeholder or landlord.
As a leaseholder, you may be required to pay:
- Ground rent (though reforms are phasing out new ground rents for most residential leases),
- Service charges and maintenance fees for shared spaces such as hallways, gardens, or lifts,
- Contributions to major works like roof repairs or external decoration.
Flats are almost always sold as leasehold because of the shared nature of the building. Some houses were historically sold as leasehold, but this practice has been widely criticised and since 2019 most new-build houses cannot legally be sold on a leasehold basis (with limited exceptions).
Key Differences Between Freehold and Leasehold
The distinction between freehold and leasehold can have long-term implications for property owners.
- Ownership: Freehold gives you permanent ownership of the land and property. Leasehold grants ownership for a fixed term only.
- Costs: Leaseholders may face ongoing costs such as ground rent, service charges, and fees for extending their lease. Freeholders are responsible for the entire cost of maintaining the property.
- Control: Freeholders have complete control over their property (subject to planning laws). Leaseholders may also require permission from the freeholder for alterations.
- Expiry: Leasehold ownership reduces in value as the lease term shortens. Extending a lease can be expensive, particularly if the remaining term is less than 80 years.
Recent Reforms
The law relating to leasehold is evolving. The Leasehold Reform (Ground Rent) Act 2022 abolished ground rent for most new residential long leases. Existing leaseholders may still have to pay ground rent unless they extend or vary their lease. The Leasehold and Freehold Reform Act 2024 (not yet fully in force) is expected to make it easier and cheaper to extend leases (standardising them to 990 years and abolishing marriage value) or buy the freehold, as well as increasing service charge transparency
Which is Better?
Buyers often prefer freehold because it avoids ongoing costs and restrictions. However, leasehold is common with flats and may be the only available option in some areas. The “better” choice depends on your circumstances, and, in the case of a lease, its terms and how long is left on it. Different rules apply in Scotland and Northern Ireland, where leasehold ownership is uncommon or has been abolished.
Final Thoughts
Whether you are considering a freehold or leasehold property, it is essential to understand the implications of each before committing to a purchase. A solicitor can explain your rights and responsibilities, help you review the terms of a lease, and advise on any risks.
Why honesty is the best policy when selling your home
Buying a home is one of life’s biggest investments — but when sellers keep secrets, it can lead to costly consequences. A recent High Court ruling over a £32 million London mansion infested with moths is a sharp reminder of why honesty is crucial in property sales.
The case centred around Horbury Villa, a luxury home in Notting Hill bought by heiress Iya Patarkatsishvili and her husband in 2019. Shortly after moving in, they discovered a severe moth infestation, later traced to the property’s wool insulation. The couple claimed they were misled during the sale process, arguing that the developer failed to disclose known issues when answering pre-sale inquiries.
Although the seller challenged the claim saying moths didn’t qualify as vermin, the court ruled that the failure to disclose the infestation and related insulation issues amounted to false information. The judge overturned the sale, ordering the seller to refund the purchase price (less deductions for the couple’s use of the home) and pay an additional £4 million in damages.
“While few properties come with such high stakes, the principle remains the same -sellers must be upfront about known issues.” explained Miss Dawn Cherry conveyancing expert of Rotherham based Firm Oxley & Coward Solicitors LLP. “Being fully prepared and transparent from the outset is essential. And with the spring house-selling season approaching, it’s the ideal time for sellers to get their paperwork in order.”
For those in the process of selling a house, one of the most important forms is the Property Information Form (TA6) which must be completed by the seller. This covers far-ranging questions covering everything from boundaries to building works, and crime rates to utility supplies. Even the presence of pests or issues like damp, subsidence or arguments with neighbours must be clearly set out.
Property transactions can be delayed — or even fall through — when key documents are missing, or sellers fail to disclose important information. Common pitfalls include mislaid paperwork, lost deeds, or gaps in records related to planning permissions, building regulations, or structural changes.
Buyers who discover problems after completion may have legal grounds to challenge the sale, particularly if they can prove that material facts were withheld, as in the case of the moth infestation at Horbury Villa.
Miss Dawn Cherry added: “If you’re preparing to sell, check you have all necessary paperwork to confirm the property’s condition and history – ideally before you even go on the market. That includes permissions for works, certificates and guarantees for installations like new windows or heating boilers, but also any problems at the property, whether or not they have been resolved. Ideally, ask your conveyancer to share form TA6 so you can check everything you will need to cover, before you put the For Sale sign up. The form is constantly being updated so the information required when you moved in isn’t necessarily going to be enough when you move out.
“Buying or selling a property is a major transaction, whatever your budget, and honesty is critical to making the process as smooth as possible. Being upfront will avoid last-minute delays or disputes that could derail your sale.”
[This is not legal advice; it is intended to provide information of general interest about current legal issues.]
Owners have a right to peaceful enjoyment of their property. However, there can be occasions where that right is overcome forcing the owner to sell up and move out. One of these occasions is when the owner receives a Compulsory Purchase Order.
What is a Compulsory Purchase Order?
A Compulsory Purchase Order (CPO) is a mechanism allowing a public authority to gain possession of someone else’s property. This mechanism is also available to certain companies who provide public services. Examples include water or electricity companies.
If you receive a CPO, it means the authority intends to acquire ownership of your property and you will be faced with having to transfer ownership to them.
Why might a Compulsory Purchase Order be created?
A CPO might be created where there is to be a major development. For example, land required for a new hospital or a major housing development. It might be served by an electricity company who wish to create a new substation or a water company who wish to install a main sewer. Typically, new road and rail works lead to the issue of Compulsory Purchase Orders. One of the recent high-profile instances of the use of CPOs was the HS2 project.
What are the steps taken in creating and issuing a Compulsory Purchase Order?
When an public authority or utility company wishes to acquire land for a project, it goes through a series of steps.
The first step is to determine the extent of land required. They then need to identify the owners of the land they wish to acquire. Once this has been established, those who are affected are invited to object to the CPO. It then addresses objections either through written representations or a public enquiry. When these steps have been completed, the CPO is confirmed. The authority or company then takes steps to acquire ownership of the property that is subject to the CPO.
Can you object to a Compulsory Purchase Order?
Yes, you can. You should notify the issuing authority if you object to a CPO or make representations at any public enquiry. It is unlikely you will be recompensed for any expenditure you incur in objecting to the CPO.
Right to compensation
Those affected by a CPO have a right to compensation. However, the right only runs to putting you in no worse financial position than before the CPO was served. You will be paid the market value of the land (and buildings) and you may receive additional compensation where there are other costs incurred as a direct result of the CPO. An example of this would be removal expenses for moving house. The UK government has issued guidance in relation to making a compensation claim.
Making a compensation claim
To ensure you receive the correct compensation you should consider instructing a professional. Chartered surveyors can represent you in your compensation claim and reach an agreement as to the amount of compensation you should receive. The UK government has published a Compulsory Purchase model compensation claim form and guidance notes to assist in your compensation claim.
Summary
If you are served with a Compulsory Purchase Order, it is essential you obtain professional advice. Dealing with a CPO can be challenging. A solicitor or surveyor will guide you through the process should you wish to object. They will also ensure the compensatory payment you receive does not leave you out of pocket.
There are rumbles of a revival in the housing market with inflation down and an expectation that the Bank of England will soon make a base rate cut. That’s been enough encouragement for high street lenders to drop their mortgage rates. The cuts – of up to 0.45 per cent – are expected to give a further boost to house sales, which have shown an upturn already during the first quarter of the year.
More than 84,000 sales completed in March according to HMRC, and mortgage approvals were up 20 per cent on the same month last year[1]. The property portal Zoopla is predicting the housing market is on track for 1.1 million sales this year – a 10 per cent increase on 2023.
But with the house sale process averaging around 12 weeks, and unexpected setbacks often adding eight weeks or more to the process, motivated home movers are being encouraged to get organised before they kickstart any sale or purchase.
The factors that can affect getting a sale over the line swiftly often start with lost or mislaid paperwork, or failing to get financial matters and in-principle mortgage offers sorted before starting the process. Once underway, delays are frequently caused by slow mortgage valuations and surveys, or local searches to identify any planning matters that affect the property.
And the longer the chain of buyers and sellers, the more likelihood of delays among all the different players.
For those who are selling after many decades in the family home, the bumps in the road are often due to changes that have taken place in terms of how title deeds are held and the sort of information required when going through the sales process.
Any property bought before 1991, with no subsequent change of mortgage or owners, may not be on the digital register of the Land Registry, the government department which maintains a record of information about land and property ownership and interests.
Whenever any land or property is bought, transferred or mortgaged, there is a legal requirement to register the transaction at the Land Registry, and since 1991 all titles have been stored electronically, replacing original paperwork. Once registered, they are an easily accessible record for all, showing who owns the property together with any charges, such as mortgages, and any details on rights of way or other important matters that relate to the property.
But if no transactions have taken place, then all the deeds and documents to prove ownership of your property will still be in paper form. Typically, banks and building societies used to hold these for safekeeping until a mortgage was repaid and would then send the document bundle to the owners.
“It’s surprising how many properties in England and Wales are still not registered and this means that paperwork will need to be found and submitted to the Land Registry in the event of a sale. This is going to add to the timeline, so if a property isn’t yet on the digital register, then ideally owners would get this sorted before the property goes on the market. Otherwise a sale could fail if there are any queries and it takes a long time to get them resolved. You will need to make sure you have all the paper deeds tracing ownership of the property back through the years,” explained Miss Dawn Cherry conveyancing expert of Rotherham Town-based Firm Oxley & Coward Solicitors LLP.
“When you’re selling, being prepared really pays off. And even if you have a property that is on the digital register, you may still have a bundle of deeds and conveyancing documents that are relevant. These old deeds may contain detailed information that does not appear in the digital records.”
Other key paperwork that will be required includes any relating to modifications to a property that required planning permission, or building regulations consent. Here, certificates will be required to show these aspects have been properly followed through. For leasehold property, any works requiring approval by the freeholder will need to be documented too.
She added: “Sellers who want to get ready before they go to market should ensure their solicitor has examined the title, lined up all the paperwork, anticipated any problems and dealt with them in advance. It’s a tactic that avoids delay later and means they are ready to act immediately when a buyer is found, and avoids potential fall-out when a slow-down occurs.”
Quick check list:
- Instruct a lawyer when you put your house on the market or, if you have nothing to sell, when you start your house search
- Look out all the conveyancing paperwork from when you bought the property including any paper documents needed to prove your ownership and the title to the property
- Check you have all the other necessary documents needed to complete the legal paperwork, including:
- Planning permission and building regulations for any works carried out by you or previous owners
- Installer and product certificates for any gas, oil or electrical works and for windows
- If the property is leasehold, request an up-to-date management pack
- When you receive an offer, check if the buyer is well prepared with legal and financial matters in place before accepting, or give a deadline for arrangements to be made before you accept
- Every source of funds must be validated and sources checked. If a deposit or capital contribution is being gifted or loaned to you or your buyer by anyone, make sure this is cleared through the necessary money laundering process well in advance.
- Keep a calendar check on the validity of your mortgage offer and other time-sensitive components, and apply for any necessary extensions in good time
- Ask about holidays from everyone in the chain and those of their lawyers, to enable forward planning to avoid last minute derailments
[This is not legal advice; it is intended to provide information of general interest about current legal issues.]
[1] Bank of England
Owning a property is a significant milestone, and the process usually involves a great deal of planning and research. However, in some cases, you may find yourself considering purchasing a house without viewing it first. While this may seem daunting, it is a practice that is becoming increasingly common, especially in today’s digital age. This article will provide you with an extensive guide on how to navigate this process, highlighting the potential risks and strategies to mitigate them, and ensuring you make an informed decision.
Understanding Sight Unseen Purchases
When we refer to buying a house “sight unseen,” we mean purchasing a property without physically touring it first. Instead, you may rely on photographs, video clips, virtual tours, and comprehensive research into the property and its surroundings.
When to Consider Buying a House Without Viewing
There are several situations where you might consider buying a house without viewing it in person. For instance, if you are relocating to a different part of the country or even internationally, it might be challenging or impractical to visit properties in person. You may also consider this option if you’re dealing with a highly competitive housing market and need to act quickly to secure a property. Another case could be if you’re a confident property investor looking to outbid competitors.
When to Exercise Caution
While there may be situations where buying a house without viewing is practical, there are also circumstances where you should exercise caution. For example, if you’re a first-time buyer or unfamiliar with the local housing market, it could be riskier to make a sight-unseen purchase. Visiting a property in person can provide valuable insights into the location, the condition of the property, and other factors that may not be apparent through virtual viewing.
Risks Involved
There are several risks associated with buying a house without viewing it first. The primary concern is the unknown property condition. Misrepresentation in online photos and descriptions can also be problematic, potentially leading to unexpected issues post-purchase. Furthermore, unfamiliarity with local housing market dynamics can result in overpayment or missed opportunities.
Strategies to Protect Yourself
To navigate the risks associated with buying a house without viewing, it’s crucial to adopt strategic approaches. Thorough research, utilising technology effectively, enlisting the help of local contacts, and commissioning a comprehensive property survey are just a few ways to safeguard your investment.
The Role of a Skilled Real Estate Agent
One of the most critical steps when buying a house sight unseen is choosing a reliable and experienced real estate agent. Your agent will be your boots on the ground, providing you with detailed local information, conducting video tours, and helping calculate the risks associated with the property. It’s essential to find an agent who is tech-savvy, knowledgeable about the local market and comfortable with negotiation.
Mortgage Preapproval: An Essential Step
Mortgage preapproval is an essential step in the home buying process, whether you’re buying a house sight unseen or not. Preapproval can help you shop for homes within your price range and show sellers that you’re a serious buyer. This can be particularly advantageous in a competitive market.
Virtual Property Tours: A Game Changer
Thanks to advancements in technology, virtual property tours have become a game-changer in the real estate industry. They allow you to have an interactive experience while touring the property from the comfort of your own home. However, it’s crucial to remember that no matter how high-quality the virtual tour is, it can’t fully replicate the experience of physically being in the property.
The Importance of Thorough Home Inspections
Whether you’re buying sight unseen or not, it’s always advisable to get a thorough home inspection. This can help uncover potential issues with the property that might not be visible in photos or during a virtual tour. If you can’t attend the inspection in person, consider setting up a video call with the inspector during the examination.
Making an Offer on a Sight Unseen Property
Once you’re satisfied with the property’s condition based on the information available, you can proceed to make an offer. This process is similar to a traditional property purchase, but it’s crucial to rely on contingencies that require specific criteria to be met before finalising the deal.
Exchanging Contracts
Once all inspections, searches and enquiries have been completed and the contract has been agreed, you’re ready to exchange contracts. This can be done virtually, with the necessary documents being signed and exchanged electronically.
Pros and Cons of Buying a House Without Viewing
Buying a house sight unseen comes with its pros and cons. On the plus side, it offers a quick and convenient way to view and purchase property, which can be advantageous in a competitive market. On the downside, there are risks associated with not physically viewing the property, such as potential structural issues and a lack of familiarity with the local area.
In conclusion, while buying a house sight unseen can be a viable option in certain circumstances, it’s essential to understand the risks involved and take measures to mitigate them. It’s important to note that conveyancing law and estate agency practices vary between the jurisdictions of the UK, including England and Wales, Scotland and Northern Ireland. By doing your research, working with a skilled estate agent, and taking advantage of technology, you can navigate this process successfully. However, it’s always advisable to seek professional advice before making such a significant decision.
If you’re looking to sell property in the UK, you may have considered selling at auction. But is selling property at auction right for you? In this article, we’ll explore the legal implications, rules and regulations, and important considerations when selling property at auction in the UK.
Property auction process
First, it’s important to understand the auction process. Auctions are typically held in a public venue or online and allow potential buyers to bid on the property. The highest bidder at the end of the auction is legally bound to purchase the property, provided the reserve price (the minimum price at which the property can be sold) is met.
What to know about selling property at auction
One of the biggest advantages of selling property at auction in this way is that it can be a quick and efficient process. Unlike traditional sales methods, which can take several months or even years, auctions are typically completed within a matter of weeks. Additionally, auctions can generate a lot of interest from potential buyers, leading to competitive bidding and potentially higher sale prices.
However, there are also potential disadvantages to selling property at auctions. For example, if the reserve price is not met, the property may not sell at all. Additionally, sellers may need to pay auction fees, which can vary depending on the auction house and the type of property being sold.
The legal side of selling property at auction
Before deciding whether to sell your property at auction, it’s important to consult with legal and financial professionals to fully understand the legal implications and costs involved. Here are some important legal considerations to keep in mind:
Contractual obligations
When you sell via an auction, you are entering into a legally binding contract with the highest bidder. It’s important to ensure that you have a clear understanding of your obligations and the buyer’s obligations under the contract.
Property disclosures
You are required by law to disclose any material defects or issues with the property to potential buyers. Failing to do so could result in legal action against you.
Payment and completion
Once the auction is complete, the buyer is legally bound to pay the purchase price and complete the transaction within a set timeframe. It’s important to ensure that you have a clear understanding of these deadlines and any consequences for failure to comply.
Legal and financial advice
It can be a complex process, and it’s important to seek legal and financial advice to ensure that you are fully aware of your rights and obligations.
Rules and regulations
In addition to these legal considerations, there are several rules and regulations that govern property auctions in the UK. For example, auction houses are required to provide potential buyers with a buyer’s guide, which outlines the terms and conditions of the auction and any fees that may be charged.
It’s also important to be aware of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which give buyers certain rights to cancel a purchase within a set timeframe.
Choosing an auction house
Finally, it’s important to choose the right auction house when selling your property. Look for an established auction house with a good reputation and experience selling properties similar to yours. Be sure to read reviews and ask for references before making a decision.
Selling property this way can be quick and efficient way, but it’s important to fully understand the legal implications, rules and regulations, and costs involved. Seek legal and financial advice, and choose the right auction house to ensure a successful sale.
Buying property at auction can be a thrilling and potentially rewarding experience. However, it is important to be aware of the legal implications, rules and regulations, and possible risks involved in such a purchase. In this article, we will explore the key considerations for anyone looking to buy property at an auction in the UK.
Understanding property auctions
Firstly, it is important to note that purchasing property at auction is a legally binding agreement. This means that once the hammer falls, the winning bidder is legally obliged to complete the purchase. Therefore, it is essential that you thoroughly research the property before making a bid. This should include a detailed inspection of the property, checking for issues or defects, and obtaining a copy of the legal pack.
What is the legal pack?
The legal pack will contain important information such as title deeds, searches, and any planning permission or building regulations that apply to the property. Instructing a solicitor or conveyancer to review the legal pack and provide you with their professional opinion on any potential issues or concerns is advisable.
Property law and auctions
It is also important to be aware of the UK’s rules and regulations surrounding property auctions. These will vary depending on the auctioneer and the type of auction being held. Typically, auctions are governed by the Auctioneers and Valuers Association (AVA) and the National Association of Valuers and Auctioneers (NAVA). These bodies set standards for auctioneers and provide guidance on best practices.
Property auction process
When attending an auction, arriving early and registering your interest with the auctioneer is essential. You will be required to provide proof of identity and, in most cases, a deposit in order to bid. The deposit is typically 10% of the purchase price and must be paid immediately if you are the winning bidder.
It is important to set a budget before attending the auction, and stick to it. Auctions can be fast-paced and emotionally charged, so getting carried away and overbidding is easy. Also, remember that there may be additional costs on top of the purchase price, such as legal fees, stamp duty, and auction fees.
Should I buy property at auction?
The main benefit of buying property at auction is the potential to secure a bargain. However, it is important to be aware that risks are also involved. For example, the property may have hidden defects or be subject to restrictions that could affect its value or your ability to use it as intended.
It is important to approach it with caution and fully understand the legal implications, rules and regulations, and any risks involved. By doing your research and seeking professional advice, you can increase your chances of a successful and stress-free purchase.
Property continues to catch headlines, whether prices are up or down; city dwellers are moving to the country or back again; or how long it may take to get the keys to a new home.
Following the dramatic 30% fall[1] in the number of sales agreed in the aftermath of last year’s mini-budget, when mortgage rates soared, there were concerns that double-figure inflation and the cost of living crisis would put a permanent dampener on the property market. But those fears look to be mistaken with latest figures from the property portal Rightmove showing that the number of sales agreed is on the rebound and just 11% down on 2019.
But while markets may be calmer, it’s a ‘new normal’ with a much-extended timeframe from putting a property on the market to completing the paper process and moving home. The time taken to achieve a sale has risen by 50% to 65 days compared to a year ago, with the time to property exchange up 5% to 139 days, according to property data specialists TwentyEA.
The slowdown is due to a number of factors. The market has had to contend with a massive backlog that arose during the pandemic, while also experiencing a surge due to the stamp duty holiday that reduced the cost of moving during 2020 to 2022. According to Rightmove, there were 44% more homes sold subject to contract in June 2022 than in 2019.
The huge volumes are putting a strain not just on conveyancing departments, where pressures are compounded by many different firms likely to be involved in any individual property chain, but also those involved in the many connecting strands of sale and purchase. They include the Land Registry – which is the government department responsible for registering property transactions – local authority departments, and lenders.
Whenever a property is sold the buyer will have a ‘local search’ carried out to check there are no planning restrictions that could have an impact on the future property value, and record numbers of search requests have put extra demands on the process. Many local authorities are taking as much as a month to handle these requests.
Similarly, mortgage lenders are under pressure, with the time taken to secure a formal offer typically taking up to six weeks.
Said Dawn Cherry : “It may sound inconceivable, but for those hoping to celebrate Christmas 2023 in a new place, this spring is a good time to start getting paperwork in order before putting up the sale board.
“It’s like preparing for a marathon in today’s market, as it’s not unusual for the sale process to take as long as six months. In these conditions, buyers need to ensure they have their mortgage offer agreed, and sellers need to be well prepared before they even instruct the estate agent. It’s this sort of approach that will make the difference between a failed sale and getting over the finish line to completion.”
For sellers, preparation includes checking the location of any relevant deeds and conveyancing documents from the original purchase. While most properties are held by the Land Registry as an electronic entry, old deeds may contain detailed information that does not appear in the Land Registry records. And any property that has not changed hands for many years may need to be subject to a digital registration, requiring the original deeds.
Other key paperwork is to cover any modifications to a property that required planning permission or building regulations consent. Here, certificates will be required to show these aspects have been followed and satisfied. For leasehold property, any works requiring approval by the freeholder will need to be documented too.
And any electrical or gas work will need a certificate to show that the work has been properly carried out in accordance with applicable regulations by a suitably qualified technician. Similarly, new oil boilers or oil tank installations should have an OFTEC certificate and new windows should have a FENSA certificate.
She added: “Sellers who are race-ready before they market will make sure their solicitor has already examined the title, lined up all the paperwork, anticipated any problems and dealt with them in advance. It’s a tactic that avoids delay later and means they are ready to act immediately when a buyer is found.
“And for those chasing the perfect property, with a continuing shortage of new instructions coming on to the market, make sure you are the best bet, not just the highest offer. Sellers will choose the safe option to keep their move as smooth as possible. Buyers who instruct solicitors, get their finances in order, mortgage offers confirmed and even go into rented property so they are chain-free and flexible on completion dates, will show sellers they are serious.”
[This is not legal advice; it is intended to provide information of general interest about current legal issues.]
Eight Things to Remember When You’re Selling a House
Conveyancing can be a long and stressful process, but the work of conveyancers helps to reduce this significantly by taking on many of the more complex tasks. Selling a house can be daunting, and many legal considerations need to be taken into account to ensure a smooth and successful sale, such as providing an Energy Performance Certificate and completing Property Information Forms. It is also important to consider issues such as property boundaries, Capital Gains Tax, and the conveyancing process itself. Understanding what each of these issues includes can help you understand the work of your conveyancer.
This article will explore eight important issues that have to be considered when selling your home in England and Wales, many of them are legal considerations that your solicitor will take care of as part of their standard processes. This Conveyancing Week, look to understand the work being carried out by many conveyancers behind the scenes, helping sales and purchases to go as smoothly as possible. Plus, whether you are a first-time seller or have sold properties before, understanding what goes on behind the scenes can help ensure a successful and stress-free sale!
National Conveyancing Week
National Conveyancing Week runs from Monday 20th March to Friday 24th March, and focuses on shining a positive light on the work of conveyancers. Much of the work done by those in this profession goes unseen and can be complex, leading to misunderstandings about what is involved. A lot goes into selling a property, but these experts do it each and every day, despite the challenges faced!
1 – Conveyancing
The conveyancing process involves transferring legal ownership of the property from the seller to the buyer. It is essential to work with a qualified solicitor or conveyancer who can handle the legal aspects of the sale, including the drafting and review of contracts, the transfer of funds, and the registration of ownership with the Land Registry.
2 – Energy Performance Certificate (EPC)
An EPC is required when selling a residential property in England and Wales. The EPC rates the energy efficiency of the property on a scale from A to G, with A being the most energy-efficient. The certificate is valid for 10 years and must be provided to the buyer before the sale is completed.
3 – Capital Gains Tax
Subject to certain conditions, you do not need to pay Capital Gains Tax when you sell your home. If you sell a property that isn’t your home, or you live abroad, you may need to pay Capital Gains tax. A specialist tax advisor can help you understand whether any tax might be payable.
4 – Property Information Forms
When selling a residential property, the seller is required to complete a Property Information Form and a Fittings and Contents Form – so your conveyancer will make sure this is complete by sending you all the relevant paperwork, and help you complete it.
The Property Information Form provides the buyer with details about the property, such as any disputes or complaints with neighbours, building work or renovations, and any guarantees or warranties that are still valid. The Fittings and Contents Form lists all the items that are included in the sale, such as appliances or light fixtures.
5 – Property Boundaries
It is important to ensure that the property boundaries are clearly defined and any disputes with neighbours over the boundaries are resolved before completing the sale. This can be done by checking the title deeds, commissioning a survey, or consulting with a solicitor.
6 – Estate Agent’s Fees
If you are using an estate agent to sell your property, you will need to pay their fees, which are typically a percentage of the sale price. It is important to shop around and compare fees from different agents to ensure you are getting a fair price.
7 – Repairs and Renovations
It is important to consider any repairs or renovations that may be required before putting your property on the market. Addressing these issues before the sale can help to increase the property’s value and make it more appealing to potential buyers.
8 – Timing
The timing of your sale can have a significant impact on the price you receive and the speed of the sale. Factors such as the time of year, market conditions, and the state of the economy can all impact the sale price. It is important to consider these factors when deciding when to put your property on the market, and to be prepared for the possibility that the sale may take longer than expected.
Eight Things to Remember When You’re Buying a House
Buying a house is one of the most significant investments that most people make in their lifetime. Whether you are a first-time buyer or an experienced property investor, the process of buying a house can be daunting and complex. In addition to finding the perfect home, there are numerous legal considerations that you need to keep in mind when purchasing a property, but that is where your solicitor comes in. As experts in conveyancing, they will know the property market inside out and the processes involved in buying your dream property.
If you are buying a house in England and Wales, there are several important legal aspects that must happen to ensure a smooth and successful transaction. In this article, we will outline eight crucial legal issues that your conveyancer will assist you with when buying a house in England and Wales to help you navigate the process with confidence.
1 – Conveyancing
Conveyancing is the name of the legal process of transferring the ownership of a property. You should engage with a solicitor to handle the legal aspects of the transaction, as it can be complex, and there are clear procedures that need to be followed.
2 – Property searches
Your solicitor will carry out a range of property searches to check if there are any potential issues with the property which could affect your use or enjoyment of the property. These could identify, for example, whether the property is listed, subject to a tree preservation order or whether there are highways or planning decisions that could affect the property. Once these searches have taken place, the solicitor will report back to you about any issues they found, or if there is any cause for concern.
3 – Stamp duty
Stamp duty is a tax that you need to pay when you buy a property over a certain price. The rules and rates for stamp duty vary depending on the value of the property and other factors.
4 – Exchange of contracts
Your solicitor will have negotiated the terms of the contact with the seller. The transaction is the point at which the buyer becomes legally committed to buying the property and the seller is legally committed to sell it. Your solicitor will explain the terms of the contract to you and the implications of the exchange of contracts.
5 – Completion
At completion, the purchase price, taking into account any deposit paid at exchange of contracts, is paid to the seller and the buyer becomes the owner of the property. Your solicitor will tell you when this has happened and you will be able to collect the keys from the estate agent.
6 – Property ownership
There are two types of property ownership in England and Wales: freehold and leasehold. Your solicitor will carry out a search of the Land Registry to find out whether the property you are buying is owned on a freehold or leasehold basis. Your solicitor will explain the implications of this to you and any obligations that you might have to fulfil if you buy the property.
7 – Mortgage
If you need to take out a mortgage, it is important to understand the terms and conditions of the mortgage agreement. Mortgage advisors and solicitors often work together, helping protect your interests and offer the best financial options for you.
8 – Property insurance
It is important to arrange adequate insurance coverage for the property, both before and after completion. Your solicitor will help you to identify what types of insurance you might need and when you might need them.
National Conveyancing Week
National Conveyancing Week aims to shed a positive spotlight on the vital work carried out by conveyancers, from Monday 20th March to Friday 24th March. Despite the complex and often unseen nature of their work, these professionals are responsible for successfully completing property sales on a daily basis. Misunderstandings about the intricacies of the conveyancing process can lead to confusion, but the experts in this field rise to the challenges they face to ensure a seamless experience for their clients!
January is the time of the year we all start making plans for all those things we hope to achieve across the year laid out in front of us.
What better time could there be to decide if the house you are in is the home you want to see yourself or your family in before next year? In this article, we look at why January is a good time to start preparing to sell and just how you can do that.
The market refreshed
Traditionally the housing market takes a small decline from October through to December, before a rush of property is added in the spring. This is thought to be due to people not wanting to move in the lead-up to the festive season, but it is also very understandable that the thought of trying to transfer all of your valuable possessions from one house to another on a cold winter’s day is not one to warm many hearts.
Come the New Year, people start to look once again at taking that first step or the next step on the property ladder. If you’re looking to sell within the year, now is the time to start making those plans a reality, letting you get on the market before everyone else. The sooner you get your property on the market, the sooner you can instruct a conveyancing solicitor who can begin to prepare all the basic documents you will need to sell your home, helping to speed up the process.
Spring sales
The vast majority of homeowners who choose to sell do so in the spring, leading to a saturated market full of competition for those looking to sell. It becomes a buyers’ market which can lead to deflation in the price you can hope to achieve. If you have a valuation you aim to sell at or even need to meet to make a move worthwhile, this could take longer during this period.
There is also more chance of being stuck in a property chain when the market is busier, extending your selling process as there will be buyers before you. The conveyancing process for a buyer is typically longer since there are more steps involved. Selling in the early part of the year allows your property to be seen before others join the marketplace making it far easier for your property to achieve its potential, and it is likely you will be earlier in the chain. As the market becomes more saturated, the time it takes for conveyancing also becomes longer, meaning you could wait months before you get your new property.
Getting ready to sell
Selecting your conveyancing solicitors early on can help you find the right team for you, making it easier along the way to have open communication. As a seller, conveyancing has fewer steps but instructing a solicitor when you decide to list your house allows the paperwork to start early and hopefully prevents delays when a buyer is found.
A big part of moving home is being ready for that big move day. So why not take advantage of the colder weather and that natural tendency to want to stay indoors to declutter? Clearing out those things you no longer want or need helps you make things easier when it comes to moving and will have the added advantage of making the presentation of your home for sale so much easier too.
New year, new property
So, if you’re considering selling, why don’t you start getting ready now? Adding your property to the market before there is more competition could lead to a better sale for you. The sooner you begin finding and instructing a conveyancing team, the smoother the process is likely to go. Plus, getting your home ready is a perfect New Year’s resolution.
Garden predators are taking root in the courts, as householders take action to fight off plant invaders that can be highly destructive and undermine property values.
One of the most common reasons for garden-related legal action is when Japanese knotweed has taken root. This highly invasive, aggressive and fast-growing plant can cause structural damage to building structures, with roots that can spread seven meters.
Even the smallest amount of root material is enough to allow new growth, meaning removal usually involves costly specialist waste disposal. Classified as hazardous waste, landowners can be fined up to £5,000 or sent to prison for two years if they allow contaminated soil or plant material from Japanese knotweed to spread in the wild.
Property values may be downgraded significantly where knotweed is present, and a landmark ruling in 2017 established that landowners are responsible if they do not prevent the plant from spreading from their land to adjoining properties. Here, a group of homeowners in South Wales took action against Network Rail after Japanese knotweed grew into their garden from adjoining railway sidings. In spite of there being no physical damage, the court ruled in their favour saying that the presence of Japanese knotweed was sufficient reason for compensation, as it had the potential to seriously affect the market value of a property. The judgement was later upheld by the Court of Appeal.
A further case in 2019 saw a £50,000 compensation pay-out being made after a surveyor failed to tell a buyer about knotweed at a £1.2 million flat.
And in one of the latest cases to reach the courts, the owners of a property in north west London are claiming £250,000 in compensation from their neighbours, saying that a failure to deal with knotweed has devalued their house, which would otherwise now be worth £1.67 million.
Typically, mortgage lenders have restricted their lending on properties that are affected and homeowners have found themselves having difficulty in selling, or finding the value of property significantly reduced.
But there may be a shift in attitude in future. For this year the Royal Institute of Chartered Surveyors (RICS) has issued new guidance for valuing property where knotweed is present. The RICS guidance for its surveyor members on how to assess the impact of any infestation suggests that previous parameters were overly strict and marks the end of the so-called “seven metre rule”. It also marks a shift in stance on managing any infestation, from permanent removal to achieve eradication towards management of the problem through herbicides.
Conveyancing expert Dawn Cherry of Oxley & Coward Solicitors LLP commented: “While there may be a shift in future, until we see clear evidence of a greater acceptance of knotweed from surveyors and lenders, the message has to be to keep on top of any infestation, whether on your own property or in a neighbouring garden.
“If it’s on your land, while there is no legal requirement to remove Japanese knotweed unless it’s causing a nuisance to neighbours, inaction is likely to result in a bigger problem in future.
“Where you know it to be present on adjoining land, you should get a request on record for the neighbour or landowner to ensure it does not spread over the boundary. And once there is evidence of it crossing the boundary to your property, you may have grounds for a nuisance claim, and to ask for an eradication programme and guarantees from a specialist company, as well as seeking compensation.”
She added: “Your home is usually your biggest asset, so it’s important to protect it – whether you’re planning on moving in the near future or not. Certainly, when a property is being sold, part of the conveyancing process includes a comprehensive questionnaire for the owner, which includes asking whether Japanese knotweed has ever been found on the property.”
[This is not legal advice; it is intended to provide information of general interest about current legal issues].
Earlier this month, the Prime Minister announced an extension to the Right to Buy scheme in an attempt to make home ownership possible for millions more in the UK. Right to Buy is a government scheme that allows most council and now housing association tenants in England to buy their homes at a discount.
Owning your own home can be an investment for your future and a very valuable asset for your family, so is the scheme worth considering as a route to home ownership? In this article, we answer some frequently asked questions by looking at how the scheme works and who is eligible.
What is the Right to Buy Scheme?
Since the 1980s, the Right to Buy scheme has allowed over two million people to own their own homes. The scheme enables council and housing association tenants to buy their homes and receive a discount of up to £87,200 or £116,200 in London.
Who can apply to the scheme?
You can apply for the scheme if your council or housing association home if:
- The property is your only or main home
- It is self-contained
- You have been a public sector tenant for three years (this does not have to be in a row)
- You are a secure tenant
Can I make a joint application?
Yes, you can make a joint application with someone who shares your tenancy or up to three family members who have lived with you for the last 12 months.
How has the scheme been extended?
The Right to Buy scheme will extend to tenants renting homes from housing associations. The extension of the scheme could benefit up to 2.5 million tenants, providing them with an opportunity to buy their homes.
Do I need a solicitor to complete my purchase?
Yes, you will need a solicitor or a licenced conveyancer to carry out the legal aspects of your purchase, including land registry fees, deeds and searches.
Can you sell your property after using the Right to Buy scheme to purchase it?
If you buy your home using the Right to Buy scheme, you can sell; however, if you sell within the first five years of ownership, you will likely have to pay back some or potentially all of the discount you received at the time of purchase. The amount you pay back will also depend on the value of your home when you sell.
Is the scheme right for me?
Buying your own home is never a decision to be taken lightly, whether using the scheme or otherwise. When you buy your own home, you take on costs that you might not necessarily be liable for as a tenant, including:
- Maintenance of the house and repairs – your landlord is no longer responsible for any repairs or maintenance, and you will need to pay for these yourself
- Home insurance – while you might already have contents insurance if you are renting, when you are the owner, you will also need buildings insurance
- Income protection – this is something you may also want to consider in the event that you can no longer pay your mortgage
- Service charges – these are most common if you are buying a flat for the maintenance of the building and upkeep of surrounding areas
Before making any decisions, you should seek professional advice to determine if the scheme and home ownership is the right option for you.
Stamp duty changes ahead for multiple and mixed-use purchases
Property buyers looking to pay reduced rates of stamp duty when buying multiple residential properties or claiming mixed residential and non-residential use can expect a tightening of the rules following a consultation by HMRC.
Stamp Duty Land Tax (SDLT) is payable in England on residential property transactions where the market value is more than £125,000, with a tiered scale related to the purchase price, and with different rules if you’re a first time buyer, or buying an additional home or a buy-to-let, through a company or when resident overseas. Non-residential property transactions are subject to different rates, which are presently lower than residential rates.
The consultation by HMRC has put the spotlight on how tax is calculated in two key areas: transactions using the Multiple Dwelling Relief (MDR) rules and those involving mixed-use purchases of both residential and non-residential property.
Under the present rules, MDR can be claimed when at least two dwellings are purchased in a single transaction, or as part of a series of linked transactions between the same vendor and purchaser. This allows the rate of SDLT to be calculated based on the average value of each dwelling, calculated individually and added together, rather than on their combined value.
For example, rather than calculating stamp duty on a single transaction of three properties at a total cost of £1.5 million, the tax could be calculated on three individual properties valued at £500,000 each. This can enable significant savings as stamp duty rates are tiered according to property value.
Savings can also be made when claiming for mixed-use purchases, which are subject to SDLT at lower non-residential rates, even where the amount of non-residential land in the purchase is very small. As HMRC highlights, mixed-property purchases can range from a country house with some land let for grazing through fast food shops with flats above, pubs and B&Bs, to large-scale city centre developments comprising ground floor retail outlets with floors of flats above.
Because mixed-property purchases are classed as non-residential, as well as benefiting from the lower non-residential rate of SDLT, purchasers can avoid the surcharges due when an individual already owns residential property, or is currently living overseas.
Also, mixed-property purchases can be combined with MDR, while still qualifying as being non-residential, unlike multiple dwelling claims involving only residential property, which would be calculated to include any surcharges payable by existing residential property owners or non-UK residents.
Purchases of six or more dwellings in a single transaction are taxed as purchases of non-residential property.
For the purposes of SDLT, there is a definition of what is meant by a ‘dwelling’ and in deciding if it qualifies HMRC will use a number of indicators, such as whether there is a separate council tax bill and energy supply, or a lockable front door, as well as the facilities needed to live independently, such as a toilet or washing facilities.
Said conveyancing expert Miss Dawn Cherry of Rotherham town solicitors Oxley & Coward Solicitors LLP: “Change is undoubtedly coming, and there may be a motivation to move on with any purchases where you may be able to claim these reliefs.
“When stamp duty was introduced, the tax charges on residential and non-residential property were similar so there was no significant tax advantage, but now there is a big difference once property values are over £1m, or where higher rate additional dwelling rates apply.”
They added: “However, this is a complicated area and it’s worth getting specialist professional advice on the topic. Mixed-use purchases and multiple dwellings relief is not automatic and must be claimed through a land transaction return and non-specialist conveyancers may not be aware of the potential to make a claim, or what constitutes a legitimate claim and HMRC will push back on anything that is misrepresented.”
Some examples of non-residential usage claims rejected by HMRC are outlined in the consultation document, including a room above a detached garage used as an office by the purchaser, when part of a large, detached, six-bedroom home; leasing the garage of a suburban, semi-detached property to a company for storage; and a paddock area behind the back garden of a substantial residential property in an affluent location being used for informal grazing by a neighbour’s horse.
[This is not legal advice; it is intended to provide information of general interest about current legal issues].
