Buy-to-Let Lawyers

What Is the Buy-to-Let Conveyancing Process?

Buy-to-let conveyancing is the legal process for transferring ownership of a property to you as an investment you intend to let out.

Pre-contract

Once an offer is made and before the contract of sale is signed, the following steps will take place:

The sellers’ solicitors will:

• Prepare the contract of sale and obtain the title documents
• Work with the seller to complete the relevant property information (TA) forms
• Provide any other information required by the buyer and their solicitors
• Ensure the seller receives appropriate advice for any potential tax liabilities (for example, Capital Gains Tax)

The buyers’ solicitors will:

• Investigate the seller’s title to the property to uncover any potential issues
• Review the contract of sale, request any necessary changes, and raise any enquiries
• Carry out pre-contract searches on the property
• Advise the buyer on any additional issues, such as around financing or the EPC rating via a detailed property report

Completion

The ‘completion date’ is when the remaining balance of the purchase price will be paid and the sale will be finalised.

On the completion date, the buyer’s solicitor will:

• Transfer the remaining balance of the purchase price to the seller’s solicitor
• Ensure any Land Transaction Tax (LTT) or Stamp Duty Land Tax (SDLT) due on the property is paid
• Register the change of ownership with the Land Registry (and with the

The seller’s solicitor will:

• Handle the transfer of the balance of payments and confirm to the seller that this has taken place
• Formally release keys with the agent
• Arrange the repayment of any mortgage secured against the property
• Transfer the remaining balance of funds to their client

• Understand the buy-to-let mortgage requirements – Buy-to-let mortgage have different application criteria from a standard mortgage, typically the interest repayment rates tend to be higher. You will also normally need to achieve a minimum monthly rental income as part of the terms of the mortgage. Further, following completion, the new mortgage is registered with Companies House
• Calculate how much Stamp Duty you will be liable for (property in England & Northern Ireland) – Landlords pay an additional 3% stamp duty compared to owner-occupiers, meaning stamp duty rates of 3-15% will apply, depending on the value of the property. Use this calculator to confirm the stamp duty that will be payable for your purchase
• Calculate how much Land Transaction Tax you will be liable for (property in Wales) – The rules on Land Transaction Tax are different for buy-to-let properties than for owner-occupied property. Buy-to-let properties incur a tax rate of between 3-15% depending on the value of the property. Use this calculator to confirm the Land Transaction Tax that will be payable for your purchase
• Understand the difference between Freehold and Leasehold – Before buying a property, it is essential to understand whether it is freehold or leasehold and what this means. For buy-to-let investors, the additional costs of owning a leasehold property (such as ground rent and service charges) will need to be factored in when working out your expected income
• Consider and estimate the resale value of the property – Buying a property that is likely to increase in value will impact the long-term value of your investment. It would therefore be wise to buy in an area that is affluent or up-and-coming, or where the property value can be increased by making home improvements
• Factor Capital Gains Tax into your planning – When you come to sell the property, you will most likely be liable for Capital Gains Tax. This cost should therefore be factored into your plans from the outset. We recommend you seek specialist advice prior to committing to a purchase