PROPERTY PURCHASES - COSTS INFORMATION FOR RESIDENTIAL PROPERTY PURCHASES

Freehold and leasehold

There is a difference between freehold and leasehold properties which will affect your costs. Generally, the costs for purchasing a leasehold property are higher because of the additional work involved in reporting on the terms of the lease and considering replies to enquiries from Managing Agents and/or the Management Company and because there are often additional fees involved for informing these entities that you have purchased the property (see below for details of the additional disbursements often involved).

Owning the freehold of a property means owning the property outright, including the land it’s built on, whereas owning a leasehold property means you own the property for the length of your lease agreement with the freeholder. When the lease ends, you return ownership to the freeholder unless the lease is extended.

Costs information

We have set out this guide of our pricing for property purchases, however the best way to get an accurate estimate of the cost of our assistance is to speak to us on 01823 745777 (for our Taunton office) or 01643 707777 (for our Minehead office), to give us a full appreciation of the details of your intended transaction which will enable us to give you an individual cost estimate at the start of the transaction.

We will always advise you about any complication and discuss the potential impact before any additional charges are incurred. Our fees cover all of the work required to complete the purchase, including dealing with the Land Registry, dealing with any lender involved and dealing with the payment of Stamp Duty Land Tax (Stamp Duty) if the property is in England, or Land Transaction Tax (Land Tax) if the property you wish to buy is in Wales.

In the large majority of residential property purchases we will be able to give to you specific details upfront of legal fees and the disbursements which you will incur. In a few limited instances, where it is particularly difficult to determine what the transaction will involve at the outset, we might deal with the matter based upon the time spent in completing the transaction at an agreed hourly rate. However, for transactions involving residential property, this is rare – we can usually provide you with accurate details of the legal fees upfront.

Range of Maitland Walker LLP’s legal costs

For a freehold purchase

Our typical legal fees involving a residential property purchase of a freehold property start from £700 (+ VAT) for a simple transaction to £3500 (+ VAT) for a generally larger property with associated complexities.

For a leasehold purchase

Our typical legal fees involving a residential property purchase of a leasehold property start from £850 (+ VAT) for a simple transaction to £3500 (+ VAT) for a generally larger and higher value leasehold property with associated complexities.

Please note that any reference to VAT is at the rate applicable at the time of the transaction, currently 20%, unless otherwise stated.

We will also charge the following fees:

• Electronic money transfer fee – £35 + VAT (£42) – this fee is charged for the same day bank transfer that is required when transferring the purchase price to the Sellers’ solicitor on completion.
• Client and Lawyer verification fee –  £35 + VAT (£42) – This fee covers the cost of an identification search against all clients to comply with our anti-money laundering requirements and the cost of a search to verify the solicitors or licensed conveyancers acting for the seller to ensure they are a legitimate firm.

Disbursements

Disbursements are costs related to your matter that are payable to third parties – we handle the payment of such costs on your behalf as part of the service we offer. These disbursements are payable in addition to our costs. The likely disbursements that will be incurred in a residential property purchase are:

• We would suggest you budget £350 for search fees. The actual amount you incur will vary depending upon the amount the local authority charge for the Local Authority Search.
• Land Registry fees range between £40 and £910 depending upon the type of transaction and the value. They are on a sliding scale, see here for further information on Scale 1 Land Registry fees.
• Stamp Duty Land Tax – The amount of SDLT depends on the purchase price of your property. You can calculate the amount you will need to pay by using the HMRC website or if the property is located in Wales by using the Welsh Revenue Authority’s website.
• LMS fee – £15 plus VAT (£18) – If you are obtaining a mortgage to part fund your purchase and your chosen lender uses the LMS STARS system, they will make a charge of £15 plus VAT which will be payable on completion. This will be detailed on your completion statement if your lender has made this charge.
• Additional fees for the purchase of leasehold property – Generally for the purchase of leasehold property there may be additional fees payable to the Landlord or Management Company, some of which may be detailed in the lease. These are:
  • Notice of Transfer fee – This fee, if chargeable, is sometimes set out in the lease but will be confirmed by the Managing Agents. Often the fee is between £100 and £150.
  • Notice of Charge fee if the property is to be mortgaged – This fee, if chargeable, is sometimes set out in the lease but will be confirmed by the Managing Agents. Often the fee is between £100 and £150.
  • Deed of Covenant fee – This fee, if chargeable, is confirmed by the Managing Agents for the property and can be difficult to estimate. Often it is between £100 and £150.
  • Certificate of compliance fee – This fee, if chargeable, will be confirmed by the Managing Agents and is often between £100 and £150.

The above fees vary from property to property and can, on occasion, be more than the ranges given above. We can give you accurate figures once we have had sight of the lease and the replies to enquiries from the Managing Agents. You should also be aware that ground rent and service charge are likely to apply throughout your ownership of the property and some payment for these costs might be required upfront on completion. We can advise you of the anticipated service charge and ground rent when we receive replies to enquiries from the Managing Agents.

The above figures are either inclusive of VAT or no VAT is payable. When we provide you with detailed costings we confirm the VAT payable.

Factors that will determine Maitland Walker LLP’s legal costs within the range above

• The complexity of the property
• The purchase price
• The time which it is anticipated will need to be devoted to the matter
• The number of titles included within the property
• Whether it is freehold or leasehold
• The urgency
• The qualification level and specialist knowledge of the adviser who needs to be allocated to the matter (see below for our hourly rates)

Assumptions

The assumptions upon which the range of costs above is given are: (a) that property is not a farm or agricultural land (b) the transaction is not a purchase of part where titles are being split and detailed consideration needs to be given to the grant and reservation of easements (e.g. rights of way and rights for services) and the relevance and effect of covenants (things which a buyer cannot do or is obliged to do); (c) the property does not have a complicated unregistered title. If any of these assumptions do not apply to your transaction then this could bring our costs outside of the given range of costs.

Work excluded from our costs that will involve supplemental fees

Some transactions will involve additional features that will result in us having to carry out additional work. We charge the following additional fees in these scenarios:

• Indemnity policies – £25 + VAT per indemnity policy issued
• Help to Buy ISA – £50  + VAT per ISA
• Help to Buy Equity Loan or Shared Ownership – £175  + VAT
• New build – £200 – £400  + VAT
• Unregistered title – £150 + VAT
• Declaration of trust – £150 + VAT for a standard declaration of trust. Where a more complex deed is required we will refer the matter to our trust team who will advise you of their fee estimate.
• Statutory declarations – £75  + VAT per statutory declaration prepared
• Deed of priority – £75  + VAT
• Occupiers consent – £75  + VAT
• Completing a licence to assign or deed of covenant – £75   + VAT
• Serving Notice of Assignment/ Notice of Charge – £25 + VAT (per notice)
• Notice to other mortgagee – £25 + VAT
• Preparing Stock Transfer forms – £25 + VAT

How long will my purchase take?

How long it will take from the offer being accepted until completion will depend on a number of factors. The average transaction takes between 6-12 weeks.

It can be quicker or slower, depending on factors such as: the number of parties in the chain; the time it takes for finance to be arranged; title problems needing to be resolved; surveys revealing items of disrepair which require rectification; some parties in the chain not wanting to complete quickly.

For example, if you are purchasing an empty freehold property with no mortgage required, the purchase could complete in 4 to 6 weeks. However, if you are buying a property where there are a number of parties in the chain (and especially if issues arise which need to be resolved), this can take significantly longer – commonly 3 months or more. In such a situation additional charges are likely to apply.

What are the stages in the process?

The precise stages involved in the purchase of a residential property vary according to the circumstances. However, below we have set out some common key stages on sales and purchases:

• Solicitors take instructions and give initial advice
• Buyers check that their finances are in place to fund purchase and contact their lender if an offer of finance is needed
• Buyers commission a survey of the property if required
• Contracts, copy title documents and preliminary enquiries are dealt with
• Searches are carried out (these will vary depending upon the nature of the property)
• Buyers solicitors raise any necessary additional enquiries of seller’s solicitor
• Mortgage offer is received (if relevant) and the lender provides instructions to buyer’s solicitor
• Advice is given by buyer’s solicitors on all documents and information received, usually in the form of a property report
• Contracts are signed in readiness for exchange
• The completion date is agreed (date on which the ownership of the property changes)
• Contracts are exchanged (the deal is now binding)
• The buyer’s solicitor obtains all monies needed from lender and buyer
• The sale/purchase completes
• Buyer’s solicitor deals with the payment of Stamp Duty Land Tax
• Buyer’s solicitor deals with application for registration at Land Registry

Who will do the work for me?

Please view the following link to view our legal advisers who deal with residential property transactions. This details the advisor’s experience and qualification.

One of these advisers will be allocated to your transaction and will liaise with you directly.

Residential Property Hourly Rates