The Complete Guide to Conveyancing

Buying or selling a property is rarely a quick process – and that’s because certain steps must be taken along the way. One such step is conveyancing. It’s a vital link in the chain and necessary to complete the transaction between buyer and seller.

What is conveyancing?

Conveyancing is the legal process of transferring property ownership from one party (the seller) to another (the buyer).

Any transfer of property begins with a negotiation of terms between the buyer and seller, including the purchase price and any conditions of the sale. Once an agreement is reached, the conveyancing process can formally begin.

One of the primary tasks in conveyancing is conducting searches and investigations to uncover any issues that may affect the property's title or use. These searches can include checking for outstanding liens, easements, planning restrictions, or other legal encumbrances that could impact the property's value or how it is used.

As a real-world example of what these investigations may uncover, let’s consider the issue of cladding in high rise buildings. For those considering buying a flat in a multi-occupancy building, the question of cladding is especially important following the tragic fire at Grenfell Tower in June 2017. A fire which started on the fourth floor due to an electrical fault in a refrigerator subsequently enveloped the entire tower. The fire was able to spread so quickly because combustible aluminium composite cladding and external insulation on the outside of the building fed the flames, leading to substantial loss of life. 

Ever since, many owners of flats in buildings with a similar cladding applied have seen the value of their homes nosedive. Conveyancers can help advise prospective buyers on the need for surveys and whether the cladding on the property they wish to purchase has the correct certificates of safety to confirm that it meets current regulations

Importantly and at the core of what conveyancers do is to , prepare and review and advise on legal documents such as contracts of sale, transfer deeds, and mortgage documents. These documents outline the terms of the transaction and ensure that both parties understand their rights and obligations and what they are buying and selling.

Who needs to do my conveyancing?

In the UK, conveyancing can be carried out by firms that are regulated as solicitors, legal executives  or licensed conveyancers. All are professional and are qualified and regulated to handle property transactions, but there are some differences between them.

Solicitors and Legal Executives are qualified lawyers who can practise in various areas of law, including conveyancing. They can have a broader legal knowledge base and can with their colleagues, often assist with complex legal issues that may arise during the conveyancing process not least because Solicitors firms can also provide additional legal services beyond conveyancing if needed.

Licensed conveyancers specialise in property law and conveyancing. They undergo specialised training in property law and conveyancing procedures, making them highly knowledgeable and experienced in the field of property transactions. They cannot generally however advise outside of that limited area should it be needed.

What will a conveyancer do?

As we have touched on, a conveyancer plays a vital role in ensuring that property transactions proceed smoothly, legally, and in the best interests of their clients. But what does it mean in practical terms? What do they do, exactly? Here are the primary responsibilities of a conveyancer.

●       Legal Advice: A conveyancer provides legal advice and guidance throughout the property transaction process. They ensure that their clients understand their rights liabilities and obligations, as well as any legal implications associated with the transaction. Which is to say, don’t hold back if you have questions!

●       Conducting Searches: One of the key tasks of a conveyancer on a purchase is to conduct various searches and investigations on the property being bought or sold. These searches aim to uncover any issues that may affect the property's value or use. This may include outstanding liens, easements, planning restrictions, or other legal encumbrances.

●       Preparing and Reviewing Documents: A conveyancer will also be responsible for preparing and reviewing legal documents related to the property transaction. Those documents include contracts of sale, transfer deeds, and mortgage documents. The conveyancer will verify that the document contents accurately reflect the terms of the transaction and protect their client's interests. In short, they go through all the small print.

●       Facilitating Communication: A conveyancer acts as a mediator between the buyer and seller, as well as other parties involved in the transaction, such as estate agents, mortgage lenders, and government authorities. They facilitate communication and ensure that all parties are informed of the progress and any relevant developments as they happen.

●       Managing Finances: A conveyancer manages the financial money movements of the property transaction, including the transfer of funds between the buyer’s conveyancer  and sellers’, payment of estate agents fees and taxes, and settlement of any outstanding mortgages or obligations relating to the property.

●       Registering the Transfer: After the completion of a purchase transaction, the conveyancer is responsible for registering the transfer of ownership from the seller to the buyer with the the Land Registry in the UK. This officially records the change of ownership and ensures that the new owner's ownership rights are legally protected

How much will it cost?

The cost of conveyancing can vary depending on several factors, including the complexity of the transaction, the value of the property, the location of the property and the clients personal situation and circumstances.  . All regulated conveyancers are required to provide details of their charging structure but they can vary – with some firms offering a more expensive bespoke service and others offering a more online service that allows cheaper fees but less personal contact  

Additionally, some conveyancers offer fixed-fee packages or no-completion, no-fee arrangements,. While conveyancing costs can add up, investing in a reputable conveyancer will provide peace of mind and ensure that the property transaction proceeds smoothly and legally.

Here are some common expenses associated with conveyancing:

●       Conveyancer's Fees: This is the cost of conveyancing work itself and typically varies based on the conveyancer's experience, location, and the services included. Conveyancer fees may be fixed or based on a percentage of the property's value or (rarely) on a time spent basis .

●       Search Fees (Purchase only): Conveyancers need to conduct various searches on the property. These include conducting local authority searches, environmental searches, and water and drainage searches. These searches incur fees, which can vary depending on the location and the types of searches required. Some properties may also need mining searches and some clients may want more detailed searches about what may be happening in the local area etc.

●       Land Registry Fees (Purchase only): There are fees associated with registering the change of ownership with the Land Registry. The cost depends on the value of the property and whether it's being registered for the first time or has already been registered and is being updated.

●       Stamp Duty Land Tax (SDLT) (Purchase only): SDLT is a tax imposed by the government on property transactions above a certain threshold. The amount of SDLT payable depends primarily on the purchase price of the property but other factors, such as whether it's a second home, of the buyer has loved abroad, can play a significant role in how much tax is payable. This is a very complex area and specialist advice may be needed

●       Additional Costs: There may be additional costs involved, such as bank transfer fees, mortgage lender fees, or indemnity insurance premiums to cover any potential issues uncovered during the conveyancing process.

How long does the process take?

The duration of the conveyancing process can vary depending on many factors, including the requirements of the parties, the complexity of the transaction, the efficiency of the other conveyancer, mortgage offers, surveys and any unforeseen problems that may arise. However, on average, the conveyancing process in the UK typically takes between 12 to 16 weeks to complete, according to the HomeOwners Alliance whilst leasehold transactions can take considerably longer) .

In this time frame, the conveyancer will conduct the various searches and enquiries, review legal documents, and conduct any necessary investigations should further information be needed. Once all of this complete, and both parties are satisfied with the terms of the transaction, contracts are exchanged and both parties are committed contractually.

At this point, a completion date is agreed upon for you to move house. Following completion, the conveyancer ensures that the change of ownership is registered with the Land Registry and handles any remaining administrative tasks.

Do I need conveyancer for remortgaging?

Eagle-eyed readers will have caught the reference to mortgage documents in the first section of this guide, and they won’t be surprised to know that the answer is yes - in some cases.

Whether or not you’ll need to involve a conveyancer in your remortgaging process often depends on whether you’re remortgaging with your current lender or looking to move to a new mortgage deal with a new lender. If you’re sticking with your current mortgage provider, you may not be required to use a conveyancer. If you’re hoping to move to a new lender, you will need the services of a conveyancer.

Remortgaging, though less complex than the initial property purchase, still involves several legal steps.  Your identification will need to be verified for example and details of your current mortgage will need to be requested from your lender.

After your new lender evaluates the property and issues a mortgage offer, it will need to be reviewed and then signed.

On completion day, your legal representative receives the mortgage funds, settles your old mortgage, and disburses any remaining funds. Finally, they will update the Land Registry to reflect the changes in your property's legal title.

If you’re looking for exceptional, expert assistance with your residential property matter contact the team today at conveyancing@kiteleys.co.uk or call us on 01202 849242.

Buy to let – More Doom and Gloom?

There can be no doubt that Government action over the past year will have an effect on the market for residential buy to let properties.  Buyers will need to factor in the new 3% Stamp Duty surcharge on properties over £40,000 and existing landlords will be affected by limits on mortgage interest relief and ongoing pressures on income from regulations for gas appliances, electrical installations and fire-retardant furnishings.  As if these factors weren’t a sufficient deterrent, Landlord’s of older properties in particular now need to pay close attention to the Energy Performance Certificate for the property.  For some time now a Certificate has been required when renting out a property, but the actual contents were largely ignored by both landlords and tenants.  This is about to change.  Since 1st April 2016, tenants of short-term tenancies have the right to require alterations to their property to increase its energy rating if that rating is F or below.  The landlord cannot unreasonably withhold consent to the tenant’s request.  From 1st April 2018, it will be unlawful to let out properties with a rating of F or below.  Listed buildings will be given a further two years to comply, presumably to allow landlords the additional time needed to gain all the necessary approvals.

All of this paints a fairly gloomy picture for the future of buy to let properties, however the continued demand for accommodation shows little sign of subsiding and buy-to-lets could still prove attractive to those who prefer a bricks-and-mortar home for part of their future growth or retirement fund.  All investment decisions should be taken with advice from an experienced and qualified independent financial advisor, and if the decision is to invest, the Kiteleys residential property team, with huge experience of the buy-to-let market, will be on hand to make that investment decision a reality.

What you need to know about the stamp duty changes…

From 1 April 2016 anyone purchasing an additional property will have to pay an extra 3% stamp duty tax.

Buy to let Stamp Duty Changes

BandExisting residential SDLT ratesNew residential SDLT rates as of 1 April 2016 for second homes and buy to let investors£0-£125k0%3%£125,001 – £250k2%5%£250,001 – £925k5%8%£925,001 – £1.5m10%13%£1.5m plus12%15%

Who will pay more stamp duty?

Anyone owning a second property (that is not their main residence) and purchasing another or changing the property (they do not already live in) will likely be affected by the extra stamp duty changes.

Surprises arising from Budget 2016 SDLT….

To assist proposed buyers who may have been hit with delays in the selling process, the government are offering buyers 36 months from 25 November 2015 to apply for a stamp duty refund. To be clear, this change will only apply to those who are selling a main home and purchasing a new one at the same time.

Unfortunately, if you are buying a property with someone who already owns another property you will be subjected to the additional rates – there will be no apportionment for the ‘first time buyer’.

Originally there were talks that individual investors or companies who were buying 15 or more properties would be offered some form of relief. However, this is not the case, there is no exemption for large scale purchases or portfolio investors.

The budget allows for capital gains to be reduced from 28% to 20% for higher rate taxpayers and reduced to 10% for lower rate taxpayers (residential property has been excluded from this). Buy to let and second home owners have been deliberately excluded from the capital gains cut.

It has been speculated that the chancellor’s aim is to tackle the housing shortage and that the receipts from the extra stamp duty would be put towards community housing trust projects.

 SDLT on leases….

From 1 April 2016, there will also be a new 2% rate for high value leases with a net present value above £5 million.

 Are the stamp duty changes going to have an impact on buy to let investors?

Buy to let landlords, whether a company or an individual, are usually investing for long term. With this in mind, as a buy to let investor with a portfolio the new tax changes are not likely to make a big impact given that they would be well established and the rents would go up long term.

Purchasing a Mortgage Re-possession at Auction

Potential Problems and Pitfalls

Purchasing a re-possessed property can seem like a good way of acquiring a cut price property for investment or for occupation. Without the right advice, however, these “bargains” can often have defects that potentially take many years and tens of thousands of pounds to put right, or in the worst case you could be left with a property that is virtually worthless.

Unlike a normal purchase where there is a pre-contract stage to give you time to check the contract, make searches and arrange your finances, if you bid successfully at auction there is an immediate binding contract and you buy the property “warts and all” subject to any legal problems or defects in the property.

The key questions to consider are:

• Who is selling the property?

It will very often be the mortgage company exercising its power of sale under the mortgage and as such the mortgage company will not be the registered owner of the property. It is accordingly necessary to consider whether the power of sale has arisen (which will require examination of the original Mortgage Deed) and an examination of the title to discover whether the mortgage was a first or second charge over the property. If the mortgage company selling only has a second charge then it is sometimes necessary to enquire as to whether the purchase price achievable will cover the first mortgage, failing which the holder of the first mortgage may refuse to discharge that mortgage. Auction sale packs should at the very least contain an acknowledgement by the mortgage companies that they will discharge their mortgages and leave you as a purchaser with clear title to the property, as the last thing you will want is to buy a property with an existing mortgage.

• What is the status of the current legal owner?

If the owner is bankrupt, there may be bankruptcy notices against the property requiring that no transfer of the property be registered without the consent of the legal owner’s Trustee in Bankruptcy. Again, the auction particulars should given an indication as to how this problem will be overcome.

• What title guarantee is being offered?

Very often a mortgage lender will sell a property under its power of sale with no title guarantee whatsoever. This means that you will have no comeback against the mortgage lender if it subsequently turns out that they were not entitled to sell the property. This makes it crucial to have a full legal examination of the title and the Mortgage documentation.

• Who owns the contents of the property?

These may still belong to the legal owner of the property, who may not have taken steps to remove them. They can also be owned by a Trustee in Bankruptcy if the legal owner is bankrupt.   You cannot assume that merely because the contents have not been removed that they belong to the mortgage company.   The safest course of action is to assume that nothing of any value has been left in the property on purpose and any items that are there must be considered to be “on loan” until such time as they are collected, with the added obligation that you may be required to repair or replace any items that become damaged or cease to function.   The law assumes that after a reasonable period of time has passed, the items are treated as having been abandoned by the owner, however the length of time that is “reasonable” will depend to a large extent on the value of the item and the ease by which it can be removed from the property if required.

• What is the physical condition of the property?

Some borrowers with mortgage arrears are unlikely to have paid out the necessary sums for upkeep of the property and, indeed, the property may be in such a poor state and condition that the only option was for the property to go to auction rather than be placed on the general market. Nothing short of a full structural survey will suffice and you should ensure that your surveyor reports to you on the likely value of the property to avoid you paying excessively at auction. You should also have the electricity and gas wiring, cabling and piping checked by an appropriately qualified person.

• Plans – Do the plans include the whole of the property you think you are buying?

 They should be checked on site.

• Is the property freehold or leasehold?

If the property is leasehold, you will need to ensure that you have read through all of the obligations (covenants) on the part of the tenants contained in the lease to ensure that they have all been complied with. If you purchase a leasehold property and there is an existing breach of covenant then you could be liable to have the property forfeit by the landlord for that breach of covenant and you cannot always be guaranteed to have the sympathy of the court in applying for relief from forfeiture. The most common reasons for forfeiture are unauthorised alterations (look out for signs of any work recently carried out to the property), lack of repair (this is where your survey report becomes increasingly important), rent arrears and service charge arrears. Usually when purchasing a leasehold property you would be provided with a clear ground rent and service charge receipt from the landlord or the landlord’s agents, however this cannot be guaranteed to be forthcoming from the mortgage lender and therefore you must be prepared to make your own enquiries. You must also be prepared to ask questions of the owners of any surrounding property owned by that landlord to try to identify any potential problems that exist with the Landlord.

• Have you inspected the property?

In a usual sale by private contract, you will have the opportunity of asking the Seller various questions in relation to the property. Your solicitor will also ask a number of questions on your behalf. Some of the key enquiries raised relate to any rights which any other person may have over the property that are not disclosed in the title deeds. As you will not have the benefit of asking these questions (it is very unlikely that the defaulting borrower will be persuaded to answer them), you must make your own inspections. You must inspect the property for signs that anyone else uses the property, including pathways and any pipework and cabling underneath, over or through the property and you should make enquiries of the gas, electricity, telephone and water companies to try to identify whether their records show any pipes etc. going across the land.  Your solicitor can assist with this if required. You should also consider the access to the property and whether it crosses anybody else’s land and may require their permission. You will also need to enquire and inspect to see if there are any current occupiers of the property. The property should be vacant. As with all properties purchased, it is a good idea to inspect the property at different times of day and night both on weekdays and at weekends to get as full a picture as possible of the property being purchased, surrounding properties and the area in general.

• Have you carried out the appropriate searches?

The mortgage lender may have provided you with the result of a local search which they commissioned in respect of the property. This will be a search of the local authority’s records, however it is unlikely to be an “official” search and is most likely to be a search carried out through a search agency. In our experience search results produced by search agencies tend to be less accurate than official searches and we would always advise commissioning a local search yourself. Local Authorities’ records can reveal a lot of information about a property, including its planning history and any existing action that the local authority is taking in relation to the property (e.g. existing compulsory purchase orders).   You should also carry out a water and drainage search if one has not been commissioned by the mortgage lender and make further enquiries if you do not like the results. A useful tool is also an environmental search, which may reveal historic land uses that may contribute to subsidence or environmental contamination of the property, both of which will blight the property in the eyes of a future purchaser. We would also recommend that you carry out a chancel repair search to ensure that the property has no likelihood of suffering from an existing liability for chancel repair (an old medieval “tax” for the upkeep of the inner part of the medieval parish church) and, upon a successful bid being accepted at auction, you may need to put in place appropriate chancel repair insurance to cover against any liability to pay for the upkeep.

• Will you need any mortgage finance?

If you require a mortgage in order to complete the purchase then it is important that you have a mortgage offer in principle before you bid. You will be required to pay a deposit upon a successful bid and you must ensure that you have the funds available (a bounced cheque will often lose you the deal and leave you open to a claim for damages).   Your mortgage lender will instruct solicitors to consider the property in detail after exchange of contracts so that they can be sure the property offers good security for the amount being advanced. Your own solicitor can often act on behalf the lender as well, however in order to give a clear certificate to the lender confirming that the property offers adequate security, your own solicitor will need to be happy with the property prior to exchange of contracts.

• How much time do I have between a successful bid and completion of the deal?

This depends on the auction contract. You should obtain full legal advice on the auction contract as you will be treated as having accepted all the terms of the contract the moment you submit a bid for the property which is accepted by the auctioneer.

Horror Stories. We have been involved in cases where clients have purchased at auction without checking any documents and without seeking our advice. On one occasion there was no legal access to the first floor flat and on another one there was an occupier in the property not notified to the buyer. On a third case a client took a chance in believing she could sell her own property by the time of completion but the sale fell through and she had tremendous problems arranging finance so she failed to complete and lost the 10% deposit.

DON’T LET THIS HAPPEN TO YOU! Please contact us as soon as you receive the auction particulars so we can check out the conditions, title, searches etc. We can normally of this for a fixed fee.

All of the above points to a necessity to have a solicitor involved in the process of buying a property at auction at the first available opportunity. It may be that you need to have your solicitor consider a number of auction packs before you are in a position to put in a successful bid, however the important thing is to have the confidence to place a successful bid in the knowledge that so far as possible all the legal risks have been dealt with to your satisfaction beforehand.

How complex do leases have to be?

During an average month I may see more than half a dozen different styles and forms of commercial leases pass across my desk.   The type of property and its location mainly dictates the type of lease. I may see anything from a lease for a small lock-up shop on Poole High Street to a factory unit on Upton Industrial Estate. I could be dealing with a major new office development in Swansea or part of a shopping centre in central London.

The quality of modern drafting is generally more consistent than its equivalent of a few decades ago, primarily due to the ability to reprint and re-create leases at the click of a mouse, but this ease of production has its downsides. Too often now I can be presented with a draft lease for a 3-year lease of a small unit based on a lease the landlord’s solicitor had used for a major new development, with all its minutely detailed provisions relating to service charges and approval for subletting. Whilst leaving no stone unturned, such leases are usually overkill, as they can run on for 80 pages or more, and invariably end up costing the landlord and tenant more, as the solicitor is under no less duty to advise.

Landlord’s can often save time and money and have a tenant completing a new lease sooner by choosing a solicitor who will carefully prepare the first draft so as to be as straightforward as possible given the length of the term and the type of property, whilst ensuring that the key issues are addressed in the document.

Residential Property: Boundaries and boundary disputes

When you purchase a property the last thing you want to inherit is a boundary dispute. This is why it is so important for you to check any plan you receive very carefully to make sure it accurately reflects the property you believe you are buying.

As solicitors we do not physically inspect the property but rely upon our you/your surveyor to draw to our attention any discrepancies. You should investigate the precise boundaries of properties carefully, in particular where there is some obvious inconsistency between the physical aspects of the land and the wording of, or plan in, a document.

If a dispute arises between neighbours about the boundary between their properties the legal documents will be looked at to determine boundary ownership. However, the boundaries between properties can differ from those described in the title documents or lease. The most common are where they have been changed by agreement or by encroachment (occupation without permission).

Sometimes where the deeds seem clear, on closer examination there may be uncertainties. If you think that the boundaries are not defined in the title document or lease, or that the boundaries have been changed by agreement or encroachment, you will probably need to get legal advice from a solicitor and/or a surveyor.

Even where the boundary appears clearly defined on the Land Registry title plan, the red edging on that plan is ‘indicative only’ and as Land Registry plans are described as accurate ‘to within a metre either side’, there is substantial room for disagreement.

Boundary disputes can be costly and time consuming and generally create a lot of unhappiness and mistrust for all parties involved. They can quite often escalate beyond all proportion to the original dispute. Any disputes would need to be disclosed to any future buyer of the property and this could impact upon the value of your home. Often it can far better in terms of time and expense to reach a compromise, however this should not be attempted without an opinion from a solicitor and surveyor as to the likely true position should the matter reach the Courts.

There are of course steps you can take to make disputes far less likely, or prevent them escalating. Thoroughly check any plans and flag up any issues to both your solicitor and the surveyor and deal with any encroaching fences with your neighbours at the point when the footings are going in, rather than when the fence is already erected and has been standing for six years or more!

Kiteleys’ property team can help you by reporting on any likely disputes at the time of purchase and our dispute resolution team can give advice to homeowners on progressing a claim in court if matters cannot be resolved amicably with your neighbour.

Tenancy Deposits – to protect or not?

As most landlords are aware, since the 6th April 2007 all security deposits taken by landlords must be protected in one of the approved Government Tenancy Deposit Schemes [TDP]. Landlords have always had a choice of schemes to which they can safeguard each deposit that must then be followed up with the serving of a statutory notice [Section 123], which must be served upon the Tenant no later than 30 days of receiving the deposit.

The question arises though; must all deposits be in monetary form and must all deposits be protected? The answer is surprisingly no, since the latest legislation amendments of April 2015, landlords can now accept actual valuable items instead of money. Examples include a car, a piece of furniture or even jewellery, such physical assets do not need to be protected by any such scheme therefore giving an “opt out” option to a number of landlords who find the deposit schemes ineffective and time consuming.

Other types of deposits that do not come under the TDP legislation are deposits from lodgers, certain types of live-in landlords and company lets. As the landlords are not obliged to take deposits in these circumstances some get to avoid the rules altogether but landlords do need to be mindful of the fact that the TPD legislation only applies to Assured Shorthold Tenancies [AST].

The schemes are free and not over complex but still landlords are apprehensive to get involved as in some schemes require the full amount of the deposit must be protected where as other schemes which are insurance based, require the landlord to pay an ongoing insurance premium. Furthermore, at the end of the tenancy the landlord has the option of returning the full amount of the deposit or part sum depending on whether any dispute arises. If dispute does arise then usually an arbitrator will decide upon the validity of the issues and pays out accordingly.

To summarise, since the introduction of the TDP Schemes in 2007 there has been much confusion and a genuine lack of knowledge in regard to the legal requirements which has left many landlords in trouble. The rules are very stringent so if landlords do not want to get into strife, the following condensed summary is a useful breakdown of the current position that landlords of AST’s find themselves in since the latest amendments of April 2015;

• Deposits do not have to take monetary form, physical items can be used as a deposit that do not come under the TDP and therefore do not need to be protected;

• Once a deposit is received it must be deposited within 30 days and notice of the prescribed information [s123 Notice] must be served on the tenants;

• Proof of service is invaluable as without it any attempt of the Eviction via the Section 21 route will undoubtedly fail;

• Detailed inventory checks and reports must be carried out by independent, authorised third parties as without such documentation a landlord will not succeed in any claim for damage against a deposit;

Failure to comply with any of the rules will not only prohibit a landlord from serving a section 21 and regaining possession but will also result in a hefty fine that could be three times as much as the deposit.

Buying a Beach Hut?

Beginning life essentially as changing rooms for Victorian beach goers, beach huts have very much become a symbol of the great British sea side. Not at all a glorified shed but a valuable haven for the enjoyment of our beaches not just for the summer but all year round, and undoubtedly locally, high in demand. Head of Office of Savills Canford Cliffs Keith Fensom observes that beach huts are rare to the market and at Savills they hold a list of hopeful purchasers. So what is involved and how do you get one?

One option is to rent from the council. Poole Council re-opened its waiting list for the annual use of its beach huts at the start of 2014 after being closed for 7 years. Open to all Poole council residents, there are 7 lists relating to the different locations, including the prestigious Sandbanks and Canford Cliffs areas. However according to figures on the Poole Council website as at June 2015 the waiting list is up to 20 years for a Sandbanks beach hut. Indeed the council are currently in the process of building 86 new beach huts, due to be completed July 2015.  Weekly and daily lets are also available at less of a wait.

The alternative is to purchase. A beach hut is a long term investment and people tend to hold on to them for generations and pass them down to their children and grandchildren. Newspapers and Estate Agency’s are a good start your search and the National Association of Beach Hut Owners can offer advice.

In terms of legalities, in general, beach huts are Leasehold and purchased on a fixed term lease. This means that in addition to the initial purchase price, a yearly license fee, a sort of ground rent, is payable to the land owner. VAT may be payable on the purchase price and will need to be charged when sold. Some are sold with a share of Freehold, such as those at Branksome Chine, one of which was recently marketed by Savills of Canford Cliffs and is currently under offer at £99,000.00. Some Councils like Bournemouth charge a fee being a fixed percentage of the sale price when the beach hut is sold so the sale needs to be structured in a certain way.

In addition to the Licence fee, non-domestic rates apply to beach huts. Under current rules, if you do not own another commercial property you can apply for a reduction in the charges. Regular maintenance is needed and insurance will need to be obtained from a specialist provider, with the majority of claims being made for theft or vandalism. Commonly overnight stays are not permitted, an exception being at the beach huts on Hengistbury Head, hence the disparity in prices, with Beach Huts there selling for over £200,000.00. Despite prices such as these, no lender will generally lend on a beach hut although some interest is now being shown by specialist lenders.

Once you have purchased your beach hut you may be free to change it, as long as you comply with the guidelines for the area, which can run not just to pages but small books! Most will have no running water or electricity and so it is sensible to check whether solar panels will be permitted.

For such an important purchase and one with so many variables it is essential that any prospective beach hut purchaser instructs a specialist solicitor to look over and advise on the lease arrangements so that you are aware of exactly what you are purchasing, and what is and is not permitted.

An abridged version of this article appeared in the Kiteleys July/August newsletter.  If you would like to subscribe to our newsletter please contact paula.rose@kiteleys.co.uk

How to move home with the least stress possible

Moving home is said to be one of the most stressful events in life, but why?

I don’t suppose moving home is something that anyone decides to undertake lightly. You have probably put a lot of thought into preparing your home for sale, decorating and fixing those little quirks that you have lived with forever, spent months or years scouring Rightmove for just the right property, speaking to the estate agents in the location you have carefully chosen, researching the schools.

Then one day it all falls in to place. Sale agreed, you can go ahead and purchase that property that you had set your heart on, but the journey does not stop there.  The weeks that follow can be the most tense, excruciating, nervous time whilst you anticipate that magical moment “exchange of contracts”, when you can book your removals and tell all of your friends your moving date.

So how can you make those weeks easier for yourself and reduce your stress levels at a time when, lets face it, you already have quite a lot to do?

Its all about preparation and choices.  I’m not saying that you can completely eliminate the possibility of anything going wrong, no one can prevent life’s catastrophes, but you can ensure that you are organised and you will retain a much greater degree of control over your move.

So what steps can you take to ensure that you are prepared?

Gathering your Paperwork

Before you have even marketed your property start to think about the kind of things your buyer may want to know about it.

If there have been any home improvements start to gather your planning documents, your receipts and guarantees.  If you have had any electrical or Gas works carried out you should have certificates for these. If you have had windows replaced, you should have a FENSA certificate.

Consider whether you would like to have your boiler serviced for your buyer, no this is not necessary but is it something that your buyer would like, and therefore make the process smoother?

The point is, you are thinking about your property and preparing for the questions that will be asked when you get to the legal stages, and if you recognise early that the dog ate all of your guarantees, you have plenty of time to ask the installers to send you copies!

Preparing your finances

This may sound obvious but have you really looked into this in as much depth as you should?

Make a breakdown of all of the costs involved, and I mean everything, so that it is accurate and there are no unpleasant surprises later. You would be surprised how many times when people question the amount of money required from them to complete their purchase that they have forgotten to include stamp duty in their calculations!

Choosing the right solicitor for you

Who you choose to act for you in your conveyancing can have a huge impact on your experience of moving home, and whether this is a pleasant or unpleasant time.

Do your research. Ask friends what their experience was like. Ask for recommendations.

You need to know what you want from your solicitor and establish who can give it. Get on the telephone and speak to the solicitor. Do not limit your research to getting a quote. Email with a question, not necessarily a legal one, what you want to know is how you will be treated. Is your telephone call returned and your email replied to?  Are you happy with the content?

You must be satisfied not only that your solicitor has the expertise required but also the understanding and communication skills, and that you are “singing from the same song sheet”.

In summary

Gather your information, and choose who represents you carefully. Appoint your solicitor early, it will not cost you any more! Ask questions, plan in advance to enable you to better manage your move and reduce any stress involved.

Finally remember, prior preparation and planning of your move will prevent a poor performance (there is another p in there somewhere but I am a lady!).

By Deborah Fenton

http://www.lawsociety.org.uk/for-the-public/common-legal-issues/buying-a-home/

https://www.kiteleys.co.uk/personal-legal/conveyancing/moving-home-choose-kiteleys/

http://www.which.co.uk/money/mortgages-and-property/guides/buying-a-house/conveyancing/

Changes to Stamp Duty Land Tax

George Osborne revealed in his Autumn Statement to the House of Commons that he was reforming the way Stamp Duty was paid on property purchases. He hopes that this will benefit 98% of property buyers.

The old system worked on a tiered basis. As a result, the rate at which Stamp Duty was payable applied to the whole of the price. If the purchase price did not exceed £125,000 there was no Stamp Duty to pay. However, if the property cost say £125,001, Stamp Duty at the rate of 1% was paid on the whole price, working out at a rather large £1,250. If the purchase price was over £250,000, Stamp Duty was paid at the rate of 3% of the total price. For a property purchased above £500,000 (but not exceeding £1 million), the rate of Stamp Duty was 4% of the total price.

Under the new system buyers will now only pay Stamp Duty on the portion of the price that is within a certain tax bracket. Like under the previous rules, if the purchase price does not exceed £125,000, there is no tax to pay. However, a new 2% rate is charged on the next £125,000 of the price. If the purchase price exceeds £250,000, you will then be charged 5% on that part which exceeds £250,000, up until £925,000.

For example, if you are buying a property for £275,000, no stamp duty would be payable on the first £125,000. £2,500 would then be payable on the next £125,000 (£125,000 x 2%) and £1,250 would be payable on the final £25,000 (£25,000 x 5%). Therefore the total Stamp Duty payable would be £3,750. If you had purchased the same property under the old rules the tax would have been much higher, namely £8,250 (£275,000 x 3%).

Example on a purchase price of £275,000
First £125,000
Tax Free £125,001 – £250,000
2% Tax Rate £250,000 +
5% Tax Rate
£125,000
No Tax to pay Next £125,000
£2,500 tax Last £25,000
£1,250 tax

In summary, there will be no tax to pay on the first £125,000 of the purchase price. You pay 2% of the purchase price on the portion between £125,000 and £250,000 and 5% on the portion above £250,000 up to £925,000. Higher rates apply thereafter.

The new Stamp Duty rates are shown in the table below:
Purchase price of property Percentage paid on the part of the property price which falls within the tax band
£0 – £125,000 0%
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1,500,000 10%
£1,500,000 and over 12%

If you would like to discuss the changes with one of our specialist conveyancing solicitors at Kiteleys or would like to receive an estimate for conveyancing fees please contact our team at info@kiteleys.co.uk or call 01202 708634.

Getting on the property ladder!

Part One – House or Flat?

by Adele Parkinson

With lending to first time buyers at its highest since December 2007, it looks as though it is becoming just that little bit easier to get your foot on the property ladder.

Anyone contemplating buying their first property should consider speaking to a financial adviser who will be able to give you an idea of what is available in terms of lending options, give you a budget to work towards in terms of your maximum purchase price and typical monthly repayments.

Once you have a budget, you can begin the fun part – looking for the right property! But are you going to be looking for a house, or a flat? If you are looking in Bournemouth,Pooleor the surrounding areas, then the closer you get to the coast the more likely it will be that the only properties within a first time buyer’s budget will be flats or apartments.

Here are just a few considerations you may want to take into account before you decide whether to opt for a house or a flat.

In legal terms, most houses are “freeholds” and most flats are “leaseholds”. The difference is that with a freehold, you own the land absolutely but with a “leasehold” property you buy exactly that – a lease for a number of years.

Although it sounds obvious, it is important to check at an early stage how long is left to run on the lease. Many mortgage companies (i.e. lenders) are unlikely to lend on flats where there is 70 years or less to run on the lease because of their concern that it may devalue the property and be less easy for them to sell on if they were to repossess.

When you buy a leasehold property, there will also be a “freeholder” who owns the freehold of that land, i.e. an individual or a company that owns the block as a whole.

The residents of the block may have formed a company and bought the freehold themselves. This is known as “share of freehold”. As a purchaser, you would also become a shareholder or member of the company on completion.

Many people see “share of freehold” flats as preferable because the residents have more control of the upkeep of the block and most importantly, they are free to extend and update their leases when necessary.  If the block is not share of freehold then the freehold owner may charge a large premium to extend the lease.

So, my tips when buying a leasehold property would be:

• Check with your Solicitor or Estate Agent who owns and manages the freehold  3(they might not be one and the same)

• Check to see whether the flat is “share of freehold”

• Check how long there is left to run on the lease and whether the lease term could be extended

• Check the restrictive covenants contained within the lease – for example, are you required to have sound proof flooring? Are pets allowed?

• Check the level of ground rent and maintenance charges and work them into your monthly budget along with the rest of your outgoings.

For more information, please ask for Adele Parkinson in the Property team, adele.parkinson@kiteleys.co.uk or telephone 01202 708634

Moving with Kiteleys

Moving home is a huge commitment practically and emotionally. Finding the right solicitors to guide you through the process as well as on the big day is so important to ensure it goes through as smooth as possible. Given that it is reassuring that a friendly solicitor team can be on the end of the phone if you have questions or queries throughout the moving day.

They can be your middleman between all parties in the moving chain and give you the knowledge you really need when in a possible panic.

You will probably be working between the two properties during the day, if there are more than one of you can make this easier by sharing the duties, and if possible more the merrier.

For an almost effortless moving day here are a few reminders and tips:

The Old House
•    Night before the move, chargeyour mobile and so on the day keep your ‘fully charged’ mobile close to hand
•    Have a few extra boxes, bags and wrapping materials on hand for last minute items
•    Check all rooms , cupboards, sheds, garage and garden to make sure you haven’t missed anything
•    Clean up after yourself, mopping , sweeping, hovering as each room is emptied, closing the door behind you  to show that it is completed
•    Take meter  readings – make a note or call immediately if you can (so take note of numbers to call), electric, gas, water (if necessary)
•    If you know the property will be empty for a while, turn off water at the stopcock and electric at the fuse box
•    Leave an instruction guides/manuals  for new tenants in an obvious place
•    Leave contact details just in case the new tenant needs to forward post or has an emergency question

The New Home
•    Keep your mobile (and charger) close to hand
•    Emergency kit – take the must-have kit with you which includes the simple things, kettle, mugs, spoons tea, coffee, milk, bathroom toiletries and small first aid kit, maybe the odd treat!
•    Very important possessions – keep important documents, e.g passport, bank account details, insurances etc with you so you know they are safe and not lost. Take small heirlooms, wedding albums and your most prized items if you can and put them somewhere safe
•    Lay protective sheeting or polythene over carpets while removals are bringing boxes in
•    Make a note of meter readings
•    Keep on eye where boxes are going, and direct where necessary
•    Don’t upset the neighbours – if the removal van or your car blocks someone’s access, ask first and introduce yourself, people are much more accommodating if they are informed initially
•    Keep the gangways clear – make sure hallways, corridors and pathways  are left empty for faster and easier transportation of boxes into rooms and the garden
•    Cork open the champagne!

If you would like to speak to a specialist Conveyancing solicitor, please call Mandy Jeneson on 01425 278866.