Once you’ve had an offer accepted on an investment property that you intend to let out, the next stage in the process is conveyancing so it’s important to understand what this involves.
Put simply, conveyancing is the legal process of transferring ownership of the property from the seller to yourself, but although this might sound simple, it’s not necessarily clear cut. There are plenty of steps involved in buy to let conveyancing, so here, we explain what you need to know.
Want to speak to a mortgage advisor? Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 1,000 reviews.
How does conveyancing work?
When you purchase a buy to let property, ownership of the property will need to be transferred from the seller to yourself. The conveyancing process starts when your offer is accepted and your solicitor and the seller’s solicitor have swapped details, and ends when all the legal work has been carried out, and the sale completes, at which point the total amount needed to buy the property is received by the seller’s conveyancer and you pick up the keys to the property. Read more in our article How to find a good conveyancer or solicitor.
The buy to let conveyancing process
Once your offer is accepted, your solicitor will contact the seller’s solicitor to request the contract pack to check.
The contract pack contains the contract itself, which outlines the particulars of the sale, including the agreed price, your names, the property address and title number. It also includes a Fixtures, Fittings and Contents form, which the seller should have completed, and explains which fixtures and fittings are included or excluded from the sale. For example, this’ll detail whether curtains and blinds will come with the sale, and you can request any items you might be interested in buying in addition to those listed, if you want.
If the buy to let property you are purchasing is leasehold, which many rental flats are, a Leasehold Information Form will be enclosed in the pack which explains the terms of the lease. Finally, there will be the title documents from the Land Registry, showing the title register and title plan, and any guarantees, for example, if the property has been treated for woodworm or damp, the work should be guaranteed.
It is your conveyancer’s role to review all this information very carefully, so that they can then raise any queries that may need answering with the vendor’s solicitor. Your conveyancer will also need to carry out the required property searches, to establish whether there is anything that might affect the property’s value or your ability to sell in future. These searches include Land Registry, local authority and environmental searches and should uncover things such as whether the seller got the legal permissions required to complete any building work they’ve done on the property.
Your conveyancer will also ensure there aren’t any restrictions on renting out the property as a buy to let investor, and it’s important to let them know of any particular plans you have for the property, such a loft conversion or extension, if possible.
Remember that if you’re taking out a mortgage you’ll need a buy to let mortgage instead of a standard residential mortgage. Read more in our articles Understanding buy to let mortgages and How to apply for a buy-to-let mortgage.
Once you’ve received your buy to let mortgage offer, your lender will send your conveyancer a copy of this. They’ll go through the conditions of the mortgage and flag anything of concern to you. As part of the process, the lender will arrange a valuation of the property to ensure that it’s a suitable security for the amount you want to borrow.
Once the necessary searches have been completed, your conveyancer will draw up a transfer deed (contract) for you to sign and to send to the seller’s conveyancer for completion. They should also be able to help with other documents you might need for your buy to let property such as a tenancy in common agreement if you’re buying with your partner.
Your conveyancer deals with the transfer of funds to buy the property, and sends any Stamp Duty owed to HMRC. Bear in mind that with a buy to let property you may have to pay additional Stamp Duty as you’re purchasing a second property. Read more in our article Stamp Duty explained.
The final step for your conveyancer is registering the property in your name with the Land Registry.
How long will the buy to let conveyancing process take?
The length of time it takes to complete the buy to let conveyancing process will depend on which local authority it falls under, as some are faster than others at responding to search requests. It’ll also depend on how many queries your conveyancer raises, and how quickly the seller and their conveyancer responds to them.
If you’ve arranged a survey on the property, this can also affect the length of time the conveyancing process takes, as the surveyor may spot issues, such as damp, that you may want resolved before the purchase completes. Find out more about surveys in our article Which property survey should I get?
As a general rule however, you should allow around 5-12 weeks for the buy to let conveyancing process to complete, but your exact time scale may be more or less than this.
Can you speed up the conveyancing process?
To ensure the process runs smoothly, make sure that your conveyancer has all the documents they’re likely to need, such as proof of buildings insurance if you’re taking a buy to let mortgage, and your identity and address details. You should also answer any queries they may have during the process quickly.
Bear in mind that the longer the process and the more questions you have along the way, the more time the conveyancing process is likely to take, and the more it’ll probably cost too.
How much does conveyancing cost?
This depends on a variety of factors, such as whether additional searches are required, and how much help you need from the conveyancer before you’re comfortable going ahead with the purchase. However, usually the legal fees for a property purchase range from about £500 to £1,500, but they can be higher for certain types of properties, such as leasehold properties, or if there are things which might make the process more complicated, such as if any covenants apply.
Bear in mind you will also pay fees for searches, taxes and administration costs. Read more in our article How much does it cost to move house?
What happens once the conveyancer has got all the necessary information?
When all the questions your conveyancer has submitted to the seller’s solicitor have been answered, and you’re ready to proceed with the purchase, you will need to sign the contract in front of a witness so the contracts then can be formally exchanged. Remember, though, that before this is done you’ll need to have arranged building insurance on the property if you’ve taken out a mortgage to buy it, as this is a legal requirement. Find out more about home insurance in our guide Your essential guide to home insurance.
Once contracts are exchanged and you’ve paid the deposit, you can rest assured that the purchase is going ahead and that the property now effectively belongs to you. However, you can only start letting out the property once it’s vacated and the sale has completed, as it’s only at this point that the mortgage funds are transferred and you can collect the keys. You can liaise on a completion date with your seller, via your conveyancer, and this will depend when it suits everyone in the chain, if there is one. This date may be around the same time as exchange, or several weeks later.
Once the sale has completed, the title register will be updated to include you as the new legal owner.
Get expert mortgage advice
The conveyancing process for a buy to let property involves many of the same steps as buying a home to live in, although when you apply for a buy to let mortgage, lenders will look at various different criteria than they would if you wanted a residential mortgage.
Want to speak to a mortgage advisor? Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 1,250 reviews.
Rest Less Money is on Instagram. Check out our account and give us a follow @rest_less_uk_money for all the latest Money News, updated daily.