Conveyancing for First Time Buyers
So, you’ve found your first dream home, and now the legal process starts – the conveyancing. At QLAW our ethos is to make law simple, accessible, and easy – for everyone! At no point does that ethos become more important that when you are choosing your conveyancing solicitor as a first time buyer.
You’ll hopefully find all of the answers you need as a first time buyer, and if you don’t – do reach out! We’re here to help.
What is Conveyancing?
Conveyancing is the legal process in the UK transferring the legal title of properties from seller to buyer.
What’s the meaning of Conveyancing?
The phrase comes from documents used historically during the legal process known as a ‘conveyance’. Although no such documents form any part of the legal process any longer, the phrase has stuck as a description of the overall process!
At what stage do you get a Solicitor when buying a house?
You should look to appoint your conveyancing solicitor as soon as the estate agent has got your offer agreed with the seller. There is no harm shopping around before that.
Can I get a Solicitor before my Mortgage Offer?
Yes, though the conveyancing process is unlikely to start until you have a mortgage offer ‘in principle’ in place.
Conveyancing – who does what and when?
Although conveyancing is strictly speaking the legal process, your property solicitor does not co-ordinate the whole process. And so, it is good to know who does what when buying your first home.
There are perhaps 5 key people/organisations:-
- Estate Agent – employed by the seller and will put the deal together
- Lender – your chosen mortgage company
- Surveyor – you will employ them to do your survey
- Solicitor – dealing with the legal process
- YOU – at the heart of it all is you
How do I choose a Solicitor when buying a house?
Good question! How to choose your conveyancing solicitor as a first time buyer is a very personal thing. They say that the most stressful things in life are moving house; divorce; and bereavement! So, you want the right conveyancer on your side when its your first house purchase right?
So, speak to a few solicitors. Think about things like:-
- Law Society Conveyancing Quality Scheme
- Lender Panel – can they act for your chosen lender
- APP – are they a traditional conveyancer or can they deliver you a seamless digital service?
Do I really need a Solicitor to buy a house?
Yes! Most of us will take a mortgage when we buy our first home, and it is a requirement of all lenders that you have an expert property lawyer acting for you. This is to make sure that the money they have allowed you to borrow is ‘secured’ against a sound legal title.
What is the Conveyancing Process?
The conveyancing process can seem daunting, but in principle it is quite straightforward. Alongside the legal processes, you will have other things to sort out directly yourself – for example get a survey, and arrange your mortgage.
The process all points to one magic pointer known as ‘exchange of contracts’. Until that point, either party can walk away. But, once exchange of contracts has happened, everyone is then legally bound to go through with the sale/purchase.
What needs to happen before Exchange of Contracts?
As a first time buyer, there are broadly 6 things that you will need to have sorted before you are ready to exchange contracts. And actually, that needs to be true for everyone else in your ‘chain’ as exchange of contracts normally happens for everyone up and down the chain on the same day. The 6 key stages for conveyancing pre exchange of contracts are:-
- ONBOARDING – engaging you as a client; getting ID; and so on
- CONTRACT PACK – this is issued by the seller’s solicitors to your own conveyancer, and will include the contract that will later be ‘exchanged’
- SEARCHES – these will include local search; water & drainage search; and environmental search. Your solicitor will obtain these searches and explain all of the results to you
- MORTGAGE – you will have arranged your mortgage. Your lender will issue both you and your conveyancing solicitor with a formal mortgage offer
- SURVEY – Survey’s are checking that the bricks and mortar are sound. They range in detail (and cost) from a simple valuation, through to a full survey which is a warts and all detail look at anything and everything
- ENQUIRIES – conveyancing enquiries or ‘pre contract enquiries’ is a formal process where, having done all of the above, the buyer’s solicitor will raise various formal questions/queries of the seller’s solicitor. This can be anything from planning issues to whether the cooker is being left!
What is Exchange of Contracts?
With all of the above 6 things in place, you are ready to exchange contracts. Conveyancing is all about ‘buyer beware’ and so this is what you must do everything possible to make sure you know what you are buying – from a legal perspective and also the building itself (hence getting a survey).
Exchange of contracts can only normally happen when not just you, but anyone else in your ‘chain’ are ready too. This is one of the greatest frustration for buyers and sellers alike as details of the chain can often be sketchy!
Once exchange of contracts takes place you are legal bound to then ‘complete’.
What happens on Exchange of Contracts?
Your conveyancing solicitor will only exchange contracts when (a) everything is in order, and (b) you have given them your express authority to do so! So don’t worry, it wont happen without your knowing!
Exchange of contracts happens by telephone between solicitors. Once that has happened:-
- Contracts are physically exchanged between conveyancing solicitors by post
- Your deposit is sent to the seller’s solicitor
- Completion date is set
What is Completion?
This is the day of you moving into your first new home!
When is Completion date fixed?
Completion day is fixed when exchange of contracts happen.
What happens between Exchange and Completion?
Now the fun starts! You will have your completion date, so you can plan for work, and of course book removals if you need them.
Your conveyancing solicitor will prepare and give you a ‘completion statement’. This will show all money in and out (including your deposit and mortgage money), and will also include confirmation if any more money is needed ready for completion.
How long between Exchange of Contracts & Completion?
This is typically anything from same day, to (more normally) 1-2 weeks. It is difficult to get things like removals booked if exchange and completion happen on the same day.
How much deposit do I need to pay?
As with all buyers, first time buyers are typically expected to pay a 10% deposit on exchange of contracts.
When do I pay the deposit?
The deposit is paid on exchange of contracts.
What happens if we don’t Complete?
If you fail to complete (and it is your fault), then assuming exchange of contracts has happened you can be sued for breach of contract, and you will lose your deposit.
What is Stamp Duty for First Time Buyers?
When thinking about how much you can afford to pay for your first home, you will need to think about Stamp Duty Land Tax (SDLT). This is a tax paid by house buyers. However, the good news is that are reliefs available for first time buyers.
| Purchase Price | First Time Buyer SDLT rates 2023 |
| Up to £425,000 | 0% |
| £425,001 – £625,000 | 5% |
| £625,001 plus | Normal SDLT rates apply |
This is against standard rates for non first time buyers which are:-
| Purchase Price | SDLT | SDLT (additional properties) |
| Up to £250,000 | 0% | 3% |
| £250,001-£925,000 | 5% | 8% |
| £925,001-£1.5mil | 10% | 13% |
| £1.5mil plus | 12% | 15% |
If you are due to pay SDLT as a first time buyer, your conveyancer will tell you in good time, and confirm the exact amounts in your completion statement.
Help to Buy for First Time Buyers
There are various Govt schemes aimed at helping first time buyers get on the property ladder. They include Shared Ownership (where the freeholder will retain a share of the value of the property and ‘rent’ that bit of it to you); and Help to Buy mortgage guarantees.
What is the difference between Leasehold and Freehold?
As a first time buyer there is every chance that you will be buying a leasehold property. In its simplest terms, leasehold properties will typically be those homes where there are shared areas – so most notably flats. Freehold properties tend to be stand alone – so houses.
The practical reality is in the main that there will likely be a management company who look after the common areas for leasehold properties (gardens, hallways, parking etc). And, you will probably have to pay some sort of maintenance payment to the management company as your contribution to those costs.
What are Property Chains?
A property chain is a series of purchases/sales that are dependent upon each other. They are perhaps the most frustrating part of the conveyancing process to buyers, sellers, estate agents, and conveyancing solicitors!
As a first time buyer you will, by definition not have anyone ‘below you’ in a chain – as you are not selling a property, just buying. There may however be a ‘chain’ above you.
The estate agent and or your solicitor will be able to let you know how long the chain is. Unfortunately, however quickly your solicitor is ready to go, you can only exchange contracts once everyone in the chain has also done all of their pre exchange stuff! For all sorts of reasons, buyers and sellers up and down the chain may be cagey and not let on the full reasons for any delays. It is often something as simple as wanting to go away on holiday, or school terms, and so on. And/but what tends to happen is that full disclosure of that is not made, leaving everyone else biting their finger nails! This is perfectly legitimate and there is really NOTHING anyone else in the chain (or your solicitor) can do to force this.
How much should a Solicitor charge for buying a house?
As a first time buyer, you will unfortunately incur all of the normal charges that everyone else does when moving house (save for the relief available on SDLT). Your costs will include:-
- Search fees
- Land Registry fees (to have you registered as the new owner(s)
- Solicitors fees (for their professional services)
- SDLT
What are Conveyancing Disbursements?
These are payments made by your solicitor to third parties – eg search fees and Land Registry fees. These will be largely the same whatever solicitor you decide to use.
How much are Solicitors fees for First Time Buyers?
When you are choosing your first time buyer solicitors do shop around, and do check like for like. Different conveyancers set out their quotes in different ways, and so the total fee payable is what you are looking for. Some will quote their own professional fees as one figure. BUT, some will include a very appealing headline figure for their professional services, but then have separate fees listed for what amounts to their services, and are NOT disbursements.
So for example, one firm might quote, say £995 for their fee, but it is all in. Another might have what seems to be cheap conveyancing as they are advertising a headline fee of just £795. BUT, they will sometimes then list separately stuff that the first quote all included (eg submitting your SDLT return, dealing with your lender, a leasehold supplement, and so on).
Do First Time Buyers pay Solicitors fees?
Unfortunately, yes, first time buyers do have to pay solicitor’s fees. Buying a house is perhaps the most significant financial commitment that any of us will take during our lifetime. And so having the right experts on your side is a must.
Interestingly, the conveyancing fees market has become very competitive over recent years. And, on average, the selling estate agent will receive a much larger fee than any of the solicitors – often ten times as much (or more)!
First Time Buyers – Joint Ownership
If you are buying jointly as first time buyers, you will need to decide which of two types of joint ownership you will hold the property as. They are:-
What is a Joint Tenancy?
If you are joint owners under a joint tenancy, then you hold the whole of the property in equal shares together. You are then known as ‘joint tenants’. With this type of joint ownership, if one or other owner dies, their share passes automatically to the surviving owner(s). This is due to a legal principle called the ‘right of survivorship’.
What is a Tenancy in Common?
A tenancy in common is joint ownership where the joint owners (known as tenants in common) hold separate individual shares, which are often (though don’t have to be) unequal amounts. The right of survivorship does NOT apply to a tenancy in common. And so, the death of any one joint tenant will leave that share passing via the terms of their will, or if they die without a will (intestate) it will pass via the rules of intestacy.
First Time Buyer – do I need a Will?
Yes! Yes! Yes! Buying your first home is a busy and stressful time, but owning your first home is an ideal moment to make a will if you haven’t done so already. Whether you are buying alone, or jointly, you should make a will.
As joint owners as joint tenants, and you pass, your share would pass automatically to the survivor of you automatically due to the right of survivorship. However, you should still have wills – for example to cover a situation if you were to die together.
As tenants in common, joint owners should in any event have a will to direct who gets their share of the property.
What happens after completion?
After completion you will be busy settling into your new home! Your solicitor will have some ‘post completion’ stuff to look after. This includes getting your registered as the new owner(s) at the Land Registry (HMLR). They will also formally lodge your lender’s mortgage at HMLR too.
