Investing in a buy-to-let property is exciting but can also be stressful. Understanding the legal side of things can help make landing the keys to your property much more simple.
Using an experienced, trustworthy conveyancer or solicitor to carry out the legal work on your purchase is essential, and understanding what’s going on throughout the process should help make things less stressful.
Conveyancing for buy-to-let property transactions works in much the same way as it does for a residential purchase – so if you’re already a homeowner, you’ll probably know what to expect.
There are three main stages to conveyancing when you’re buying a property that you intend to rent out:
Once you’ve found your perfect buy-to-let investment pad and had an offer accepted, the first step is to find solicitor or licensed conveyancer to carry out the legal work on your purchase.
Conveyancers – as their name suggests – specialise in conveyancing. They’re fully trained in property law (and sometimes probate) but aren’t qualified to help with other legal matters. Solicitors offer a wider range of legal services and so can sometimes cost a little more. If you use a solicitor, make sure they have plenty of experience in property law.
Once you’ve chosen a solicitor or conveyancer, they’ll set to work carrying out all the relevant checks needed to formalise the purchase. This includes arranging property searches to find out about issues such as flood risk and planning restrictions which could affect the property and its value.
Preparing to exchange contracts is usually the longest part of the process, and things often go a bit quiet while all the checks are being carried out. Understanding what’s happening during this time can help to make things a bit less stressful.
While your solicitor or conveyancer does their bit, you’ll need to arrange a survey on the property you’re buying to find out about its condition. If any significant issues are uncovered, you can attempt to negotiate the price with your seller or ask them to get the problems fixed.
Your solicitor will review all of the information collected through the various checks, searches and your survey to draw up a contract of sale, ready to exchange with your buyer’s solicitor.
When the terms of the sale have been finalised and everyone’s happy to go ahead, you and your seller will sign matching contracts and give these to your solicitors to exchange. At this point, you’ll need to pay a deposit – normally 10% of the sale price.
Once contracts have been exchanged, you and your seller are legally bound to complete the sale on the agreed completion date – usually between one and four weeks after you’ve exchanged.
On completion day, your solicitor will send the remaining balance to your seller’s solicitor. When they’ve confirmed receipt, your seller will vacate the property and drop the keys off to their estate agent, ready for you to collect.
Conveyancing fees typically cost between £500 and £1,500, depending on which firm you go for and the type and location of the property you’re buying.
Some solicitors charge a flat fee, while others will charge you a percentage of the property’s price.
If the property you’re buying is a leasehold, there’s a little more work involved and you’ll usually have to pay a leasehold supplement to cover this.
Conveyancing is the legal process you have to go through if you’re buying, selling, remortgaging or extending a lease.
Typically, a sale or purchase in England or Wales will take around 8-12 weeks from the moment an offer is accepted to the point of completion.
However, the conveyancing process varies from case to case and it can take longer depending on the complexity of the transaction, the number of people in the chain (if applicable), and how quickly you can respond to queries from your conveyancer.
When you buy or sell a property, conveyancing typically costs between £500 and £1,500. But fees can vary depending on a number of factors including the firm you choose, the type and price of the property in question, and where it’s situated.
See our guide to conveyancing fees to find out more about the costs involved, or use our cost calculator to get a personalised quote with a cost breakdown.
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A conveyancer is a legal professional who specialises in property law and can carry out the legal side of buying or selling a property, remortgaging or extending a lease.
Stamp duty, also known as stamp duty land tax (SDLT), is a tiered tax charged on residential properties in England and Wales with a purchase price of more than £125,000 (£40,000 for second homes and buy-to-let properties).
Use our cost calculator to find out exactly how much stamp duty you'll have to pay.
Exchange of contracts is the point in the process when both the buyer and seller commit themselves to a legally binding agreement.
To exchange, the seller's conveyancer draws up two copies of the same contract and both the buyer and seller signs their own copy. When both parties are ready to legally commit, the two contracts are exchanged.
Once contracts are exchanged, both the buyer and the seller are legally bound to go through with the house sale.
The amount paid by a buyer to a seller when contracts are exchanged to make a property sale legally binding.
These are legal fees and expenses paid on your behalf by your solicitor or conveyancer. They include the fees paid for official copies of deed and title documents, estate agent's fees, and any bank charges for transferring funds.