Associated with the buying and selling of homes around the UK, conveyancing fees cover the amount a prospective homeowner pays to ensure that their purchase is handled correctly. Usually split into two parts, legal fees refer to what a conveyancer or solicitor charges for completing them, and disbursements refer to what third-party services charge for other tasks such as searches. How conveyancing fees are handled may vary and it’s important to get a good grasp of how they function before buying or mortgaging a home.
The Cost of Conveyancing Fees
As with any mortgage-related transaction, the cost of conveyancing fees will vary according to factors such as locations, additional searches, or complicated circumstances. Conveyancing fees also cover the cost of disbursements.
The Cost of Legal Fees
Computed by weighing the amount of work completed by a conveyancing solicitor, legal fees for leasehold properties often cover more than conveyancing fees. Some of these fees cover:
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Bankruptcy searches
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Local authority searches
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Anti-money laundering inspections
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Property fraud inspections
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Bank transfers
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Ownership transfers
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Title deeds
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Stamp duty land taxes
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Deposits
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Help-to-buy supplements
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Help-to-buy ISAs
Types of Disbursements
A disbursement covers a wide range of payment types that may involve interest payments on loans or operating expenses. The varying types of disbursements include:
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Anti-Money Laundering Checks
Used to verify your identity, these checks are usually performed by an online entity. If you’re a foreign national or living abroad, you may be charged extra on top of the average £6 - £20 fees.
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Title Deeds
Obtained from your land registry when selling a property, the fees covering your Title of Deeds will depend on whether you’re selling a leasehold property or freehold property. The cost of procuring the title is around £6.
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Searches
To purchase a property, you’ll also need to complete local authority searches that span drainage and environmental inspections. You might also choose to perform a planning search to note any developments that may be erected nearby. These search expenses can be hefty, amounting anywhere between £250 - £450.
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Property Fraud
As with any major expense, you’ll want to perform a property fraud check on your acting lawyer to ensure that the money you’re transferring ends up with a legitimate company. These checks cost a mere £10.
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Ownership Transfer
To have your Land Registry transfer your name with your buyer’s upon completion, you must pay a fee of £200 - £300.
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Telegraphic Transfer or Bank Transfer
To ensure that your funds transfer to your mortgage provider’s account on a given day, you’ll need to undergo a telegraphic transfer, as fulfilled by your solicitor. Along with a bank charge, you can expect to pay anywhere between £20 - £30.
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Stamp Duty Land Tax
You need only to pay stamp duty if purchasing a home that costs more than £125,000. Charged on a sliding scale, these costs can vary greatly and must be personally requested.
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Help-to-Buy Supplement
A Help-to-Buy scheme offers equity loans of just a 5% deposit to first-time buyers who are purchasing a newly-built home. This is supplemented by the government. It usually entails extra legal work and can cost you between £200 - £300.
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Gifted Deposits
Prospective homeowners receiving help on their deposits must pay an extra fee for paperwork to prove that the money is being provided by a legitimate source. Some law firms will charge you up to £100 and offer insurance that costs £200. Insurance isn’t always necessary, so weigh your options before accepting an offer.
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Lifetime or Help-to-Buy ISA
A more extensive version of a Help-to-Buy supplement, charges are usually capped at £50 plus added VAT.
Charges on Leasehold Properties
Working around leasehold properties will accrue additional costs as such agreements involve supplementary paperwork and investigations. For example, you may need to shoulder a Deed of Covenant, which is a legally binding agreement between you and your landlord regarding factors such as repair work.
Other work might cover additional investigations regarding the length of a lease, information about service charges and management details, or serving notices on your landlord or managing agents. These costs can range from £100 - £1,000.
Other Potential Conveyancing Costs
Though not usually common, some circumstances may demand added fees, such as when a seller doesn’t have FENSA or building regulation certification for extra features. If such is the case, you may need an insurance policy. Remortgaging may also demand other conveyancing fees.
When to Pay Conveyancing Fees
When hiring a conveyancing solicitor, it’s often expected that you pay a deposit of up to 10%. The rest of your conveyancing fees are usually settled after the sale of the home is completed.
Sales that Falls Through
Every now and then, a sale will fall through. If your conveyancing solicitor offers a “no sale, no fee guarantee” you may not have to pay a full conveyancing bill. Though some may also waive legal fees, it’s important that you get a feel of who you’re working with to ensure that you’re partnering up with only the best conveyancing solicitors in London.
Hiring a Conveyancer
Though not a legal requirement that you hire a conveyancing solicitor, doing so can make the job for you and your mortgage lender much simpler. You’ll likely need to work with one if you’re transferring equity on a property and other activities such as bankruptcy searches, Land Registry searches, identification searches, and other transfer fees that may incur legal costs.
Without a mortgage, it’s still entirely possible to perform the conveyancing yourself. If so, make sure to consult a conveyancing fee calculator to get a good grasp of what you’ll need to set aside throughout the process.
Saving on Conveyancing Fees
If you’ve skimmed through all the information above, you may be wondering whether all of the listed fees are necessary. In most cases, they are, so your best case for saving on such fees is to compare conveyancing quotes before making a final decision regarding your conveyancing solicitor. When shopping around, be sure to ask whether or not disbursements are included in a conveyancing solicitor’s given fees and if they are likely to be required.
Conclusion
If you are unhappy with your conveyancing bill and have the means to prove unaccounted charges, you’re well within your rights to report being overcharged. However, it’s important that you procure accurate information by working closely with your conveyance solicitor and researching any potential fees that you might incur throughout the home-buying process.
To instantly compare conveyancing quotes in London, visit Conveyancing Calculator! We provide fully transparent quotes without hidden fees and save you time comparing prices from nationwide property solicitors.
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