What are the legal costs of buying a home?
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See exactly what costs you will have as part of the legal process of buying a house.
Moving house is a big event. But, what costs can you expect to pay, and when will you have to pay them. Here, we look at the legal process of moving home, and the costs involved in that. We also take a quick look at what other moving costs you might incur on top of the legal costs.
What is Conveyancing?
Conveyancing is the legal part of buying and selling houses/land. The phrase comes from an historical document (called a conveyance) which formed part of the legal documentation. That document is no longer part of the legal paperwork, but the phrase has stuck to describe the general legal process of buying and selling houses in the UK.
What are solicitor fees for buying a house?
When you look around for the best conveyancing solicitors, do make sure you compare like with like. And in doing that, it is important to differentiate between:-
- Solicitor fees (ie payment to them for their services)
- Disbursements (ie payments to third parties)
In building terms, it is the difference between ‘labour’ and ‘materials’. And so, when choosing your conveyancer, do be sure to look at the ‘bottom line’ of the quote as different property lawyers will set out their conveyancing fees differently from one quote to the next.
What are the average Solicitor costs for buying a house UK?
This is generally between £750 – £1,500. There will be VAT to add to that at 20%. And remember this is for the conveyancers professional services. So to reiterate the building analogy it is the property lawyer’s labour charge! You will also have to pay for ‘materials’ (disbursements).
But, do beware as some conveyancers will quote their own fee as one figure. Other’s may quote a cheap fee as a headline figure, but then there are things that appear to be separate that are actually simply part of their professional fees!
The sorts of things that are sometimes split out from the main quoted fee include ‘completing your SDLT return’; ‘liaising with your lender’; or ‘dealing with HMLR’. These are all ‘labour’ things and not costs payable to third parties (ie they are not disbursements). So, do be sure to understand the full extent of the conveyancing solicitors fees when you receive their quote.
What Conveyancing disbursements will I have to pay?
When you are buying a house, your disbursements will be different to selling a house. They will include:-
- Search Fees – local search; environmental; and water & drainage
- SDLT – Stamp Duty Land Tax (see below)
- Land Registry Fee – to have you registered as the new owner(s)
How much do Conveyancing Search fees cost?
Searches are generally provided by specialist search companies, and the costs are all much of a muchness. Most solicitor practices will use the same search firms, and so the costs will be largely the same whichever conveyancer you chose. You will only be charged the exact cost of the searches, and there should be no ‘mark up’ on the cost for the conveyancing solicitor to pocket (we’re back to the materials and labour analogy!).
The costs vary largely by area – ie where the property is in England and Wales.
Search fees are generally in the region of £250-£350.
How much are Land Registry fees when buying a house?
The Land Registry (HMLR) will charge a fee at the end of the conveyancing process to have you registered as the new owner(s). Visit the HMLR website to view the current fees.
How much is Stamp Duty Land Tax (SDLT)?
SDLT is paid against the value of the property you buy. Rates are as follows:-
|Value of property
|Up to £250k
NB SDLT is paid at those rates for the part of your home that falls into that value category. So, the first £250k is zero for everyone. If for example you are buying for £875k you do NOT pay at 5% across the whole value.
The standard rates above are for ‘principle private residence’, and for UK residents. Second homes and non UK residents attract high rates.
What is First Time Buyer Stamp Duty Relief?
One notable relief is first time buyer relief. Reduced rates are available to those buying for the first time as long as the property value is under £625k. If the property value is more than £625k then no relief is available. If it is under £625k, then the reduced charges are:-
|Value of property
||First time buyer SDLT rate
|Up to £425k
When do I pay Stamp Duty?
Stamp Duty is paid when you ‘complete’ your purchase. Your conveyancer will make this payment to HMRC on your behalf.
When comparing conveyancing quotes do check like with like.
What else will I pay via my Conveyancer?
The other notable payments you will make via your solicitor will be:-
- Deposit (on exchange of contracts)
- Balance (if any) to complete (ie if the balance due is more than the mortgage you are taking)
How much deposit do I pay?
Standard protocol requires a 10% deposit to be paid. This can sometimes be reduced if the person selling agrees to it.
When do I pay the deposit?
The deposit is paid on exchange of contracts. Your conveyancing solicitor will ask you for that in good time, but you should be ready with that 10% from the point at which your offer is accepted and the conveyancing process starts.
What happens to my deposit if we don’t complete?
If you do not complete and it is your fault, then you will forfeit the deposit paid on exchange of contracts.
What is a Completion Statement?
Your conveyancer will prepare a completion statement for you once exchange of contracts has happened. This will include:-
- Solicitors fee
- Disbursements paid
- Deposit paid
It will then set these off against the purchase price, showing any balance that is due from you in order to complete the purchase.
Does it cost more for Joint Owners?
Generally no! One big decision for you as joint owners is whether you own as joint tenants or tenants in common. Your conveyancer will advise you on this and it normally forms part of their fee. Meantime, take a look at our guide to joint ownership which explains in full the pros and cons of the different types of joint of ownership.
How much will my survey cost?
There are different levels of detail that surveys might go into this, and that is likely to be reflected in the price. This might be anything from a simple valuation, to a full blown detailed survey. Expect to pay (in the region of) £250-£1,500, dependent upon the level of detail you want.
Who will pay my Surveyor?
You will. It is for you to choose a surveyor, and you will pay them directly. This is not something that your conveyancing solicitor will be involved with.
Who pays the Estate Agent?
This is something for the seller – not the buyer!
What other costs might I have when I move?
The main other expense you might have when buying a house is removals company. Like your survey, this is something for you to sort, and won’t be any part of the legal process with your property solicitor. However, you should NOT book your removals until you have exchanged contracts. The reason for this is that the completion date (the day you move) is fixed on exchange of contracts. And, ahead of exchange, even if you have an ideal date for completion, the parties are not yet legally bound and so everything can technically fall through. Once exchange of contracts has happened you will be both legally bound, and have the magic completion date – hence you can then book the removals. It is of course a good idea to have got quotes ahead of this and provisionally pencilled in who you might like to use.
Summary of the cost of buying a house
So, to summarise, these are the costs you are going to have, some of which will be paid via your conveyancer, and some that will not be. They will all be included in your ‘completion statement’:-
- SOLICITORS FEE (for their ‘labour’ – beware hidden costs)
- DISBURSEMENTS (payments to third parties: Search fees; SDLT; Land Registry fee)
- PURCHASE (10% deposit, mortgage advance, balance from you if applicable)
The purchase price (point 3 above) is money paid to the seller via the seller’s solicitor. It will typically include:-
- Mortgage advance
- Balance (if any from you)
Your mortgage advance will be sent to your solicitor by your lender ahead of completion. If you intend to be paying for your new home with more cash than the 10% deposit paid on exchange of contracts, then your conveyancer will detail this in the completion statement giving you time to transfer that balance to your solicitor ahead of completion day.
How do I choose the best Conveyancing Solicitor?
There is of course lots to have in mind when choosing the conveyancer that is right for you. We hope you will choose QLAW! And, why not check out our guide on how to choose the best conveyancer which looks at all sorts of stuff to have in mind (as well as price).
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