There’s a standard conveyancing procedure that takes you through transferring a legal title of a property to another person. This transaction is completed over two phases, which are the exchange of contracts and then completion, making it a relatively straightforward process with minimal approvals required. Your conveyancer is responsible for ensuring this process is completed as effortlessly as possible on your end.
Some homeowners are exploring options outside of the typical conveyancing process. While you can always go for the traditional standard procedure, you can also opt for Help to Buy conveyancing, which consists of government initiatives to help people get on the property ladder. For instance, you might already own a home but need a bit of help with attaining your next move. While the process is a bit more complicated than the standard procedure due to the additional contract with the Government, taking advantage of the schemes offered can present some benefits.
Here’s how conveyancing fees in the UK and other factors differ with Help to Buy conveyancing.
Help to Buy: Equity Loans
This scheme is one designed to help first-time home-buyers get a property with a 5% deposit. It is an equity loan from the government, who lends both existing homeowners and first-time buyers money to purchase a new-build home. To be eligible for this loan, the purchase price on the home should not exceed £600,000. One benefit homebuyers can take advantage of as long as they have saved 5% of the deposit is that they can borrow 20% of the purchase price without interest for the first five years. You can even borrow as much as 40% of the purchase price if looking for a home in London.
Requirements for Help to Buy Equity Loans
The first step in qualifying for this loan is to save a deposit of at least 5%. You must also select a new-build home or flat for which the government can lend you 20% to 40% of the total sale price while you loan the rest via a mortgage. Equity loans should be repaid after 25 years, although you can opt to repay it earlier if you decide to sell your home. Once it’s time for the sale or repayment, the same percentage as the initial equity loan must be paid. After the first five years of being interest-free, fees will be subject to 1.75% interest and may also be affected by inflation.
Surveying conveyancing quotes in London is one of the most important steps so that a qualified conveyancer can assist you in the property purchasing process, especially with the different specifications of the Help to Buy Equity Loan. Carefully review the conveyancing fees before settling on a conveyancer. Apart from the usual legal fees, there might be other things like search reports, land registration fees, and others. Make sure you are well aware of the costs before committing.
Help to Buy: Individual Savings Account (ISA)
Another scheme that the government offers is the Help to Buy ISA, a savings scheme that enables first-time buyers to save up to £200 a month to finance their first home. One great benefit is that the government contributes 25% to your savings, so for every £100 you save, they’ll add £25 on top of it. This is allowable up to a maximum of £3,000 where the buyer would have to put in £12,000 in the ISA. If you live outside of London, then the bonus applies to homes purchased up to £250,000. For those residing in London, the limit is higher, going up to £400,000. ISAs are also easily accessible from banks to credit unions.
Requirements for Help to Buy ISA
When considering the best value conveyancing, the ISA is an enticing option for couples since the benefit is available per buyer rather than per household. You and your partner could receive a bonus of up to £6,000 when purchasing your first home. To apply for the ISA bonus, speak to your conveyancing solicitor and ISA manager before everything else to ensure they are aware that you wish to claim the government bonus.
ISA bonuses at £400, which means your Help to Buy ISA needs to have at least £1,600 before you are eligible to claim your bonus. When you’re close to purchasing your home, inform your conveyancer so they can apply for and receive your bonus, which will be added towards funding your first home. For the bonus to be considered, it needs to be consolidated with the funds during completion.
However, homeowners must take note that the bonus cannot be used for the deposit made during the exchanging of contracts. It also shouldn’t be used to fund agents’ or solicitors’ costs associated with buying a home. While a conveyancer might charge you to process your bonus application, he or she must not exceed £50, including VAT.
Help to Buy: Shared Ownership
The third scheme available for the Help to Buy conveyancing process is Shared Ownership, which allows homeowners to buy a share of the home they are purchasing. With this option, you can choose to buy anywhere between 25% and 75% of your home’s value and then pay rent on however much is remaining. Even if you cannot afford to buy bigger shares upon purchasing the house, you still have options to buy bigger shares in the future. Those who go with this option can choose to buy an existing home through a resale programme or a new-build home.
There are several requirements buyers need to meet to qualify for this scheme. Household income should be less than or equal to £80,000 (£90,000 in London) annually, and you must be a first-time buyer. If you have owned a home in the past but can’t afford to buy one now and are an existing shared owner looking to move, then you can apply for this scheme.
Some homeowners may be wondering if the conveyancing process is really any different with Help to Buy schemes. While the process essentially remains the same, there are more complexities in Help to Buy schemes that will require your solicitor’s expertise to get the benefits. Choose a conveyancer who has plenty of experience in government schemes so that they can handle your home purchase properly. Not only are they well versed in these transactions, but they can ensure everything goes smoothly for you, whether that’s dealing with the mortgage broker or ensuring your eligibility requirements for the scheme of choice. The right conveyancer will make the process seem smooth and seamless for the benefit of their client, so it’s worth investing in a qualified individual you can trust.
At Conveyancing Calculator, we are fully regulated conveyancing professionals who provide our clients with instant quotations to help them purchase a home, remortgage their property, or move into another house. If you’re in need of cheap conveyancing solicitors in Manchester, get in touch with us today!