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Many first-time property buyers may not know gazumping, and those who have purchased property before may have been victims of it but didn’t know it was called gazumping.

When you finally find a property you like, and your offer is accepted, you often think it’s only a matter of time before you move in. However, the process of purchasing property can be long and arduous, with many opportunities for things to go wrong. One of the worst things that can happen is the dreaded act of gazumping.

What is Gazumping?

Two very similar terms are often confused: gazumping and gazundering. Gazumping occurs when another party makes a higher offer on the house you’re in the process of buying and has that offer accepted, pushing you out of the purchase and returning you to the beginning of the purchase process.

Gazumping can happen during various stages of the purchase process before you’ve exchanged contracts, usually when the property is listed as “Sold subject to contract.” In many cases, it happens because a higher offer is made, and the seller wants to maximise the amount of money they get from the property.

However, sometimes, it could be a timing issue, for instance, when you take too long to have a survey or sell your home or if the solicitor is dragging their feet. The seller may decide to reject your offer in favour of one from a buyer who is in a better position to move faster.

Although gazumping cases are still minimal, they have increased in recent years, causing concern among property buyers.

Is Gazumping Legal?

While gazumping sounds and feels unfair when you’re on the receiving end, it is perfectly legal in the property-buying process in England and Wales. An agreement to buy or sell property doesn’t become legally binding until written contracts are exchanged. Until then, neither party can be held to a prior verbal agreement.

Unfortunately, the exchange of contracts between the conveyancer and the seller’s solicitor comes relatively late in the process. After you’ve arranged for the property survey, the conveyancer has conducted the necessary searches, and you have received your mortgage offer. This can take at least several weeks between the seller accepting your offer and that agreement actually becoming legally binding.

Within this period, the seller may accept an offer from another buyer in preference to yours. This is usually because the new offer has a higher price. Gazumping is more likely to happen in areas with a strong property market, with lots of demand driving house prices up.

The estate agent is required to pass all offers to the seller, and of course, they may prefer higher prices because it reflects on their commissions. It is also not unheard of for the seller to claim a higher offer at the last minute from a buyer who already has a mortgage offer in place where there is none to facilitate a quicker sale.

What Can You Do to Avoid Gazumping?

Gazumping is not only unfair but deflating. It takes time to find a property you like and aligns with your dream. So, having the rug pulled out from under your feet and losing out on the purchase can be frustrating. Although there is little you can do to rule out gazumping completely, there are steps you can take to reduce the chances of this happening to you.

Act Quickly

One reason sellers end up going for another offer is that you’re taking too long to complete various steps. It’s unlikely that you will have all the elements you need for the purchase in place when you make your offer. There is quite a bit you need to do, such as running checks and surveys, which takes time; the quicker you can get these complete, the less time there is for gazumping. You may need to discuss this with your solicitor to ensure everything is done quickly.

Obtain a Mortgage in Principle

There are two reasons why you need to get a mortgage in principle prior to making an offer. The first one is that it shows you have the financial ability to purchase the property, which shows your seriousness to the seller. The second one is that it saves you valuable time.

Even though there are conditions that must be met when applying for the actual mortgage, having an MIP will speed up the process considerably.

Finding a Conveyancing Solicitor in Advance

The process of finding the right conveyancing solicitor can take considerable time as well. Doing your due diligence and hiring the solicitor in advance will save you time. Also, the solicitor will save you time. Because any payments to the seller must be made through the solicitor, it will also help if you can be prompt in getting the money to them on time. They often hold the money in advance so that payments can be made without delay.

Line Your Surveyor Quickly

Have a surveyor in mind and ready to go. You should be able to reach the surveyor and organise the survey as soon as you are ready to proceed. Get quotes from chartered surveyors in advance so you don’t have to spend time trying to find the right surveyor when you have already sent in your offer.

Get the Property Off the Market

As part of making your offer, you can ask to have the property taken off the market. The seller should be willing to do this, especially if they know that you are serious and ready to move quickly.

However, sellers are under no obligation to take a property off the market. They can be surprisingly open to this, especially in areas with fairly flat housing markets.

Get a Lock-in Agreement

A lock-in agreement, or lock-out, is a binding agreement in which the seller agrees not to negotiate with any other parties within a fixed period. This allows the buyer to arrange their mortgage without the fear of being gazumped.

These agreements work by having the buyer and the seller deposit a percentage of the property price. If either side tries to back out of the sale or change the price without good reason, their payment is forfeited to the other party. The agreement should list the things that would allow for an alteration, such as problems with the survey. Your solicitor should be able to help with this.

Provision should also be made for either side delaying sending paperwork. It stands to reason that such a document will cost some money in legal fees. However, it may be worth the cost for your peace of mind.

Get Insurance

The last option you have in your attempt to avoid being gazumped is to take out insurance which would pay you an agreed sum to cover losses in the event of being gazumped. Although it is not entirely certain that you won’t be gazumped, you can go in well-prepared and able to minimise your risks.

Conclusion

Gazumping can be a real nightmare for any property buyer, especially if it has happened to you before and very close to the contract exchange. However, while there is nothing illegal about it, there are steps you can take to reduce your chances of becoming a victim of gazumping. You can discuss the different options available with your solicitor to ensure you safeguard your purchase. It’s also crucial to move quickly through the different phases of the purchase process to maintain seller confidence in your ability and intention to purchase the property.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

A home is one of the most significant investments that most people make. Although everyone needs a home at some point, not everyone can afford it. There are different avenues you can use to help you purchase property. Some people turn to the government to help them buy property.

If you choose to get assistance from the government, there are two options: help to buy and Shared Ownership. Both are excellent choices, but you should take time to understand which one is right for you, which can be confusing.

This guide should help you debunk both schemes and choose which is best for you.

Help to Buy Benefits

The first option is Help to Buy, which requires you to save up a deposit of 5% for the property. You then get a mortgage of 75% and a government loan for the remaining 20%.

This allows potential home buyers to purchase property using a smaller deposit cost. The government loan is interest-free for five years. You can choose to pay off the loan when you move or when your mortgage is paid off, whichever comes first.

Some of the benefits of this scheme include the following:

Financial support for your deposit

Buying a brand-new home or even a self-build project comes with a hefty price tag, particularly in the modern market. The Help to Buy scheme works to ease the financial blow of such a substantial investment by enabling successful applicants to get a boost in purchasing the property. this level of support can make a significant difference to potential buyers with their sights set on a property that may be just outside their budget limit.

Increased property eligibility

Whether you’re looking for a newly built property or have dreams of building your home from scratch, the Help to Buy program covers all angles.

The support available through the incentive applies to self-built and new homes with a value of up to €500,000. The high ceiling means that many properties are eligible, giving buyers a larger pool of options.

Simpler Eligibility Criteria

Most programs, including mortgages, have a robust list of qualifications requirements that lock out many applicants and potential homebuyers. The rules and regulations for applying for the scheme are clear and simple. The scheme is exclusively for those buying their first home and focuses on helping newcomers to the property market.

Another condition is that the occupants must occupy the new property within two years of its purchase and must retain their primary residence for a minimum of five years. This requirement ensures that the scheme benefits genuine home buyers.

Shared Ownership

The alternative to Help to Buy is Shared Ownership. In this scheme, you buy a portion of a property (about 25% to 75%) and the rest is owned by a housing association. You pay a mortgage repayment on the portion you own and reduced rent on the portion you don’t own.

Like the Help to Buy scheme, the goal here is to allow people to buy a house without having to save up a hefty deposit.

The added benefit of Shared Ownership is that you can gradually buy more of the property until you buy the whole thing, a process called “staircasing.”

Benefits of Shared Ownership

Some of the upsides of shared ownership include the following:

Smaller deposit

Because you will be buying a share in the property, your deposit will be smaller. Your mortgage will be based on the cost of your share, and your deposit will be a percentage of that amount rather than the overall price of the property.

Greater stability

Owning a shared ownership property means you won’t experience the disarray of having to move at the landlord’s request. Naturally, this is dependent on you keeping up with repayments, which entails both rent and mortgage in shared ownership properties.

You can increase your share or not

Under shared ownership, you can choose to increase your share if you wish. This could ultimately mean you own the property outright. You get to choose how you want to proceed.

Shares can be sold

Housing associations stipulate that you must stay in the property for at least 12 months before you can sell. Once the year has passed, you are free to sell your shares in the property.

Comparison of Help to Buy and Shared Ownership

Although both options have some similarities and serve the same goal of helping you purchase property, they do have some differences that you should take into account when deciding which option is right for you.

Eligibility

• Help to Buy
• To qualify for the Help to Buy scheme, you must be a first-time buyer who is not renting their existing home. You must also be able to fund at least 80% of the property price through a combination of a repayment mortgage and a minimum deposit of 5%.
• Shared Ownership
• To Qualify for Shared Ownership, you must not currently own another home or at least be in the process of selling one. You must also be over 18 and have income below a specified threshold.

There is no set income threshold for the Help to Buy scheme. It depends on your location and how much you need to borrow. However, as a general rule, for a mortgage, you can’t borrow any more than 4.5x your gross annual income, so working on what you can borrow is a good place to start.

For Shared Ownership, your household must earn less than £80,000 per year. You must also be over 18 and unable to buy a suitable house on the open market.

You may not be eligible for both schemes if you have a poor credit history or if your mortgage, rent arrears or savings are not judged to be sufficient to cover the process of buying the property

Property Type

• Help to Buy
• The Help to Buy scheme applies to new builds only from a builder registered with the scheme, with a maximum price of £300,000.
• Shared Ownership
• For shared Ownership, most properties are new builds, but others are resales. You can check the conditions and qualifications for Shared Ownership in your area.

Deposit Size

• Help to Buy
• The Help to Buy scheme requires a 5% deposit on the property you want to purchase.
• Shared Ownership
• The Shared Ownership scheme requires that you put down 5% of the portion you will be buying. This might be significantly lower than putting up 5% of the purchase price because you will only pay for the share you want to purchase.

Ownership

• Help to Buy
• With Help to Buy, you will have an outstanding mortgage and government loan, but you will effectively own 100% of the property. Also, most properties under this scheme are usually freehold.
• Shared Ownership
• In Shared Ownership, you will only own a portion of the property you purchase between 25% and 75% unless you staircase way up to 100%. In most cases, Shared Ownership properties are leasehold.

Monthly Repayments

• Help to Buy
• With Help to Buy, you’ll only pay mortgage repayments plus £1 per month management fee after that, you will pay interest as well.
• Shared Ownership
• You will pay mortgage repayment and discounted rent

If you decide you want to sell your home, the Help to Buy scheme allows you to sell your home through the open market. If you haven’t fully paid back the money, this is when you will pay back the government loan.

Under shared ownership, you must first offer the property to the housing association so they can find another Shared Ownership buyer. If they can’t find a buyer, then you can sell it on the open market.

With this comparison, you should be able to determine the scheme that best suits your needs and makes it easy to purchase property.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

Shared Ownership is one of the more common property purchase schemes available to homeowners looking for assistance in purchasing property. As expected, the buyer must meet a wide range of qualifications and requirements to be considered eligible for this scheme.

Understanding the qualification criteria can save you the trouble of preparing for the purchase and applying to the scheme only to be turned away.

What is Shared Ownership?

If this is your first time looking into assisted property purchase and you come across Shared Ownership, it would serve you well to understand what it is and what it offers.

Shared Ownership is a government scheme designed to help people who struggle to buy a home traditionally get onto the housing ladder. It uses smaller deposits to make the housing buying process more manageable.

The idea behind Shared Ownership is that you buy only a portion of the property, perhaps 25%, so you don’t need to save such a big deposit. You can then pay mortgage repayments on the part of the property that you own and reduced rent on the part you don’t own, which is usually owned by a housing association.

Benefits of Shared Ownership

This method of purchasing property has its pros and cons. Some of the main benefits of buying property using this method include the following:

Accessibility

One of the main reasons people consider Shared Ownership is because it is much more accessible than buying outright.

The buyer is only buying a certain share of the property, not the whole thing. This means the costs are reduced, and you need a smaller mortgage and deposit. This opens up the market to more buyers who otherwise wouldn’t have the resources to purchase the entire property.

Although you will still have to pay rent and a reduced mortgage payment, which may be around the same as full mortgage repayment, you don’t have to put together a considerable deposit, which can often be the biggest hurdle.

Another advantage of owning property through this scheme is that the share of the home you purchase can increase in value in line with local house prices. This means that you’re still building equity, which is useful when you decide to take the next step.

Flexibility

Shared Ownership also provides flexibility for the buyer. You can always buy a bigger share of the property and work towards full Ownership at your own pace.

The process is called staircasing. Depending on your financial situation, it can be in small steps or one large chunk.

It’s important to remember that you will be buying the stake at the current market value, not the original price. But the opportunity to buy whenever you’re comfortable can be very reassuring.

Desirable Locations

Because you’re buying at a lower deposit and overall value, Share Ownership homes are often a great option if you’re looking to purchase in more desirable and expensive areas.

The platform has homes in various popular areas, which is excellent if you have your heart set on an area with great schools or local amenities. This is a unique advantage of shared ownership because it opens more opportunities for homebuyers who wouldn’t be able to afford the house using the traditional method of purchasing property.

Disadvantages of Shared Ownership

Just as it is important to understand the benefits of Shared Ownership, it is just as important to understand the limitations and downsides to determine whether it is the right option for you before looking into whether you qualify for it.

You’re still a tenant

You should remember that you’re only paying rent on a share of the property; you’re still a tenant, and most of the tenancy rules will continue to apply.

You can be evicted if you fail to pay rent, regularly cause disturbances, or do not follow the rules for sub-letting, among other things.

When considering this method of property ownership, you must also make sure that you can afford both the rent and the mortgage payments.

Stamp duty considerations

Ideally, you don’t pay stamp duty as a first-time buyer. However, with shared ownership, these rules change slightly. First-time buyers of a shared ownership home pay no stamp duty on the first £425,000 of any home that costs up to £625,000.

However, you might pay stamp duty in two different ways: the first one is based on the total amount upfront or just on the share that you’re buying.

Although paying the full cost upfront will be higher, you will never have to pay it again, even if you buy the whole property outright.

If you pay a portion, the initial cost is lower, but you will have to pay more later when you staircase your way upwards to increase your share of the property.

Service charges

Regardless of how low your share is, you will have to pay any ground rent or service charge that is present on your property.

It’s important to remember this when you’re planning your finances and how it might change throughout the process.

I’m I Eligible for Shared Ownership?

Now that you understand Shared Ownership and its offerings, if you still want to proceed, the next step is to check whether you’re eligible for the scheme.

The basic criteria for eligibility in Shared Ownership include:

• You must be at least 18 years old
• Your household income must be less than £80k (less than £90k if you’re buying in London). There is no set minimum income, but the housing association might have their threshold.
• You don’t have to be a First Time Buyer. But you can’t own another home at the same time. If you do, you’ll need to show that it’s up for sale and that it’s unsuitable for your current needs. Additionally, the home must be sold by the time you exchange contracts for the new home.
• You must be unable to buy a home that suits your needs without the help of a scheme.
• You must be able to demonstrate that you’re not in mortgage or rent arrears.
• You must have a good credit score and show that you can afford regular payments and the costs of purchasing the property.
• You must have access to a specified sum of money in order to pay the legal fees.

The housing association you choose may have additional conditions, but these are the general requirements for the Shared Ownership housing scheme.

Affordable Homes Programme Eligibility

Some of the homes delivered through the new Affordable Homes Programme also have rights to Shared Ownership. However, tenants in these homes must meet additional requirements in order to become shared owners, such as:

• Must have lived in the property for at least 12 months and been a social tenant for the last three years.
• Must have a maximum household income of £80,000 or less
• They are required to undertake an affordability assessment to prove they can afford to own a home.
• Must not be going through bankruptcy proceedings.

I’m I Eligible for Shared Ownership If I’m Self Employed?

Yes, you may be eligible for Shared Ownership if you’re self-employed. However, you will need to show at least three years of your accounts to showcase financial stability. If your income varies considerably, you should consider seeking financial advice before committing to owning a home.

I’m Eligible for Shared Ownership If I’m Retired?

If you meet the set requirements, you can purchase a Shared Ownership home if you’re retired. If you are over 55, you may be eligible for the Older Persons Shared Ownership Scheme (OPSO).

Is Shared Ownership Right For Me?

It’s one thing to qualify for Shared Ownership, it’s another to weigh the options and determine whether it is the right option for you. If you’re looking for a property you can customise but don’t want to commit to living in it long-term, you should consider other better options.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

Whether you’re purchasing or selling property, it’s essential to understand the cost implications before engaging in the transaction.

Of the many costs associated with buying or selling a house, conveyance disbursements are among them. These are additional fees that a conveyancer is required to pay to third parties on behalf of the client during the process of transferring property ownership. This guide looks at conveyance disbursements and how they can impact the transaction.

What are Disbursements in Conveyancing?

Conveyance disbursements refer to certain fees paid to third parties by the conveyancer or solicitor on behalf of the client.

These costs are separate from the actual fee charged for the conveyancer’s professional services. They are incurred when conducting necessary checks on the property, such as property searches, and acquiring relevant documents that are crucial in legally transferring the ownership of the property.

Examples of conveyancing disbursements include:

• Stamp duty: This is a tax paid to the state government when you buy a property.
• Title search fee: This is a cost of service for the Land Registry to search the title of the property and ensure that it is free of defects and encumbrances.
• Registration fee: This is a fee paid to the Land Registry to register the transfer of ownership of the property from the seller to the buyer.
• Building inspection fee: This is paid to have a qualified building inspector check the property for any structural defects or damage.
• Pest inspection fee: The fee paid to have a qualified pest inspector inspect the property for pests or termites.
• Strata report fee: This fee applies only if the property is part of a strata development. It is paid to the strata management company to obtain a strata report for the property.
• Courier fees and other administrative expenses: The fee to cater for courier services may also be included in the conveyance disbursements.

The industry standard for conveyance disbursements is that the conveyance solicitor will collate and create an estimate for these expenses before starting the conveyancing process to give you a good idea of the total cost of the service. You can also find the total cost of these fees on the final quote in the section under “conveyancing disbursements.”

Who Is Responsible for Paying Conveyancing Disbursements?

Any costs that pop up during a property transaction are never ideal. However, the fees have to come from someone. Usually, they come from the buyer or the seller of the property. Most of the fees apply to the buyer of the property, while others are paid by the seller.

As a buyer, you incur a substantial amount of the fees to ensure a smooth transaction. Some of the conveyance disbursements that are paid by the buyer include the following:

• Search fees
• Land Registry fees
• Stamp duty land tax
• Bank transfer fees
• Telegraphic transfer fee
• Land Registry office copies to confirm ownership
• Bankruptcy search for mortgage purposes.

The share of conveyance disbursements for sellers is reduced and usually only applies when the seller agrees to pay for some of the fees. Some of the administrative costs you will incur when selling property may include:

• Telegraphic transfer fee for the transfer of funds on completion of the sale
• Land registry office copies to confirm ownership.

Other transactions may incur extra charges, such as indemnity insurance, if required as part of the property transaction process.

When Do You Need to Pay Conveyancing Disbursements?

Understanding the amount you need to pay in conveyance disbursements and the timing of the disbursement is important to keeping the process smooth and moving.

Ideally, the costs are incurred during various phases of the purchase process, alongside the fees for your conveyancer’s labour. In this case, the fees can be settled upon completion (stamp duty).

However, you should be aware of the timelines to ensure you can manage your budget effectively during the intricate process of property transactions. Your conveyancer should be upfront with you about which charges are payable and when. If you’re not certain, you can always ask the conveyancer for a breakdown and a schedule so you have the finances ready on time.

Initial Stages

Some conveyance disbursement fees are necessary in the initial stages of the transaction. These fees are usually required to ensure due diligence is completed. These include local searches, environmental searches and water and drainage searches, which are crucial in determining the value of the property.

During Exchange

The solicitor may need to settle the Telegraphic Transfer Fee to ensure prompt transfer of funds. The fee will vary depending on the amounts in question. The transfer is crucial in securing the agreement between the buyer and seller and indicates a commitment to the transaction.

Completion and Finalisation

Upon completion, the conveyancer will finalise the land registry fees, which are relative to the property’s price. The disbursement is made to update the records to reflect the change in ownership. Stamp Duty Land Tax (SDLT) must also be settled with the HMRC and requires accurate calculation and timely payment to avoid penalties.

Additional Conveyancing Costs and Fees

Other fees related to the conveyance fees that are not part of the disbursement fees that you should be aware of as well. You must also accommodate these fees because they influence the total expenditure and should be factored into the budget.

Bank Transfer Fees

Financial institutions charge bank transaction fees to securely transfer funds during the property transaction. These can also include the lender’s cost for sending money to the seller’s solicitor.

Management Company and Service Charges

If you’re dealing with a management company, you will incur additional fees when purchasing a leasehold property. These entities are responsible for the upkeep of the common parts of the property, and they can charge a service fee for this maintenance. Expect to find the charges laid out within the service charge statement.

Indemnity Insurance

Indemnity insurance policies include chancel indemnity insurance and search indemnity insurance, which are designed to protect against specific potential legal issues or property defects. An example is chancel repair liability, which can affect properties with certain parishes. Costs for indemnity insurance policies vary based on the coverage amount and the type of property involved.

You may also be expected to pay other government and regulatory fees, such as:

• Taxes and levies
• Statutory required action
• Land charges register and other official documents

Closing Remarks

While conveyance disbursements are not the highest cost you will pay when buying or selling property, they are a crucial part of the transaction and must be made available to the conveyancer on time to ensure the process proceeds smoothly. You also need to be aware of the fees to budget for them and factor them in when determining your budget for purchasing the property.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

When purchasing property, you will also be purchasing use of the piece of land the property sits on, even when you purchase property with a leasehold. The piece of land where the property sits may have something called a covenant attached to it, which will affect how you use the land. Understanding what the property covenant is can be crucial in helping you understand what you can and can’t do when living on the property.

In some instances, the deed to the new property may refer to the covenant. In this guide, we examine the property covenant, what it means, and what may happen if you break it.

What is A Property Covenant?

A covenant is essentially a rule or set of rules attached to a property that dictate what you can and cannot do as the owner of that piece of land for the period you are there.

If you purchase a property with an existing covenant, you automatically agree to and should abide by the rules highlighted in that covenant.

Types of Covenants

There are two common types of covenants: positive and restrictive covenants. Here is a closer look at what each type of covenant means.

Positive Covenant

A positive covenant highlights a condition of an exception of an action. If you agree to this covenant, you will be agreeing to do something with the land you own. This can include building or maintaining something or contributing financially to a shared space.

A positive covenant is tied to the owner who initially agreed to it rather than the land itself. That means if the covenant is pre-existing, it may not have been passed on to you when signing the lease unless a conveyancing device has been used.

If you’re purchasing a property and you suspect that it has a positive covenant, you should get a solicitor to help you determine whether the positive covenant has been passed on to you.

Restrictive Covenant

A restrictive covenant is the opposite of a positive covenant. It is a stipulation of what cannot be done with the property and the land. These restrictions highlight what you can build or what you use the property and land for. Unlike positive covenants, restrictive covenants are tied to the property and will be passed from owner to owner.

If you have ambitions for the property you’re looking to purchase, it is important to determine if there is a restrictive covenant that might prevent you from doing what you want with it.

Common Examples of Covenants

Some of the examples of positive covenants include:

• Erecting and maintaining a fence or wall on the boundary of the land
• Contributing to the maintenance of a shared driveway (financially or manually)
• Contributing to maintenance and repairs of a shared roof

Essentially, a positive covenant could increase the property’s running costs if passed to you. Although the extent of the increase will depend on the responsibilities being passed to you, it is essential to carefully consider it and factor in the additional costs when doing your analysis to ensure you have a much broader picture.

Common examples of a restrictive covenant include:

• No putting up extra buildings or structures on the land
• No alteration of the property on the land
• No non-domestic animals are to be kept on the land
• The land is not used for business

Some covenants might even prevent you from hanging your washing out, letting out the property, or having a satellite dish. Therefore, it is crucial to understand these covenants before committing to purchase the property to avoid inconveniences down the line.

Why Are Covenants Needed?

The most common reason for adding covenants to new and old properties is to maintain uniformity of the area and protect the surrounding land that you will now own. The covenant can also be designed to maintain the value and use of the land or property.

For instance, keeping noise at a minimum, not parking commercial vehicles in and around the property, and restricting the animals allowed could help keep property prices at a maximum. This also means that all occupants and owners get to enjoy the neighbourhood at a certain standard.

What Happens If You Break A Covenant?

Breaking a covenant can have various outcomes depending on what is detailed in the covenant. These outcomes can occur whether you break the covenant knowingly or by accident.

The breach of covenant can be called out by the party that has the benefit of the covenant. This can be the owner of the land, a developer or another person you’re sharing the land with.

Before purchasing a property with a covenant, you should find out who benefits from the covenant because that is the person you will have to answer to if you break the covenant.

The outcomes of breaking a covenant vary depending on various factors, including the following:

Remove the offence

The lightest outcome is to undo what you have done that has broken the covenant. You may be asked to get rid of the thing that goes against the covenant. Sometimes, this can also be the costliest outcome. Take, for instance, if you built a wall that goes against the covenant. You would be required to take it down.

Pay a Fine

One of the more serious outcomes of breaking a covenant is the fine you can end up paying. The fine may vary depending on the part of the covenant you have broken, but it can run into thousands of pounds. This is paid to the person with the benefit of the covenant.

Legal Action

In the most drastic of circumstances, legal action may be taken against you over breaking the agreed covenant. However, with most covenants, legal action is a last resort and often follows after you have failed to comply with the other outcomes.

None of these situations are ideal, which is why you should be aware of any covenants before making an offer on the property.

You should also have a discussion with your conveyancing solicitor about what you would like to do with the property to ensure you purchase a property that aligns with your dreams and aspirations for it.

Can You Change or Remove a Covenant?

Currently, it’s not possible to remove a positive covenant from a property as they are tied to the owner and not indefinitely passed on with the land.

However, restrictive covenants tied to the land and passed from owner to owner can be changed through the Lands Chamber of the Upper Tribunal, which has jurisdiction to change or remove them.

The most common reason for changing or removing a restrictive covenant is that it has been passed on for too long and has become obsolete or is negatively impacting the ability to improve the property’s value. However, you would have to prove this in some way to have the covenant changed or removed.

Before changing a restrictive covenant, you should seek professional legal advice from your conveyancing solicitor to ensure that this is something you can do.

Conclusion

Covenants are one reason why you need a professional to look around and do searches for your property. Beyond the physical appearance of the house, the finishing, and the environment, there are many other things that could affect the purchase and even how you can use the property in the future, like the covenant.

Once you determine the property has a covenant, the next step should be to determine how that covenant affects you and whether it will affect the prospect of purchasing the property. For restrictive covenants, you can discuss the option of removal with your solicitor. However, this could take some time.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

Finding your dream home is one of the most exhilarating experiences. For some home buyers, it takes a long time to find a home they are happy with, and if you’re lucky, your search might be short-lived. Once you identify the home you want to purchase, it’s time for the real challenge to start. First, you have to make an offer on the house, and your offer has to be accepted for you to stand any chance of proceeding with the purchase and owning the house down the road.

If you’ve had your offer rejected before, this can be an anxious time which could send you back to the property market and search again. But, if you stick around, this guide should help you avoid most pitfalls associated with making an offer on the house and provide you with valuable tips that increase your chances of getting your offer accepted.

What To Do Before Making an Offer on a House

Before you can make an offer on the house, there are some steps you should complete to be as prepared as possible. These include:

Getting Preapproved

If you’re serious about purchasing a house, the first thing you should do before you even start looking at houses is to get preapproved. During the preapproval process, your mortgage lender will review your income, finances and credit history to determine how much you can borrow for your mortgage.

Once you’re preapproved, you will receive detailed information about the interest rates, closing costs and your estimated monthly payment. You will also receive a preapproval letter that you can show home sellers.

The preapproval letter indicates the amount you’re eligible to borrow, which could strengthen your offer in the eyes of the seller and show your commitment to purchasing the property.

Find a Real Estate Agent

Again, before you start the home-buying process, you should find a qualified real estate agent to work with and possibly a conveyancing solicitor. A real estate agent is essential if you’re a first-time buyer.

The agent will research and find potential properties that meet your requirements, and more importantly, they will guide you through the negotiation process. You also have a better chance of getting your offer accepted if you make it through the agent.

How to Make an Offer on a House

Once you complete the preapproval process and find a reputable real estate agent and a conveyancing solicitor, you can start looking for houses. The real estate agent will do most of the heavy lifting, saving you unnecessary viewings and making it easier to find the house of your dreams.

Once you identify the property, you will need to make an offer on the house, and this, too, is a process. Here are the steps you should follow:

Decide on a Price

You and your real estate agent will need to settle on a price to offer on the house. You can use several criteria to determine the amount to offer.

Some of the factors your agent will consider are the comparative market analysis that they’ll perform to determine the correct offer amount. You will also want to consider other factors like how long the house has been up for sale, local market conditions and the average time it takes to sell a home in that area.

When making the offer, you should also consider your ability to afford the house and the amount your preapproval says you can borrow from the lender.

While it can be tempting to get into a bidding war, especially if it’s a house you like, it’s unwise to commit to a home outside your budget and overextend yourself to get an offer accepted.

Consider Contingencies

When making the offer, you should consider whether to include any contingencies. For example, you can include a contingency stating that if the home inspection reveals problems with the home, you can walk away from the sale without losing your earnest money.

In real estate, these contingencies protect the home buyer, but a contingent offer can also be problematic in the seller’s market. If your offer includes contingencies, the seller may end up choosing another offer.

Before adding contingencies, carefully discuss with your agent whether certain or any of them are appropriate for your home offer.

Decide How Much Earnest Money to Offer

Earnest money is a type of deposit that protects the seller if the contract falls through. It is usually set between 1-3% of the transaction price. The earnest money deposit is held in an escrow account during the purchase process and eventually goes towards your downpayment or closing costs when you close on your home.

If you want your offer to be attractive to the seller, you can offer a higher deposit than the average. This shows the seller you have the cash to back up your purchase offer.

Write an Offer Letter

Once you iron out the details of the offer, you can put together an offer letter with the help of your real estate agent that will be submitted to the seller’s agent. The offer letter is your chance to stand out to the seller, so you want to be sure you do it right.

The letter should include:

• The seller’s name
• How much you’re offering to pay for the home
• The address of the property
• Any contingencies you want to include with the offer
• How much you’re willing to pay in earnest money
• When you want to close on the home
• A deadline for when the seller should respond to the offer

You should also include a few attachments with the offer letter for the seller to review. These should include the preapproval letter to show you have the finance aspect of the purchase workout and are ready to pay. If you’re buying the house in cash, you should attach a proof of funds letter.

Receive Seller’s Response

The seller’s response can be one of three answers: an acceptance, a rejection, or a counteroffer. Getting your offer accepted on the first try is the possible scenario. You will be able to move forward with the home sale without further negotiations over the price of the home.

If the offer is rejected, it’s likely the seller opted for another offer over yours. At this point, you should regroup with your real estate agent and look at your remaining options.

If you receive a counteroffer, you should talk to your agent about the conditions of the counteroffer and whether it is wise to raise your offer. If the seller is willing to counteroffer, they are clearly willing to negotiate. Your agent can talk with the seller’s agent to gauge their expectations and revise the offer letter accordingly or walk away from the sale.

If your offer is accepted, you can proceed to get the home inspected. Your conveyancing solicitor should advise on whether other surveys and searches are necessary, depending on the property’s location.

Tips to Make a Winning Offer on a House

You can use some tips that will make your offer more appealing to the seller and increase your chances of winning the offer on the house. Some commonly used tips include:

Get the Price Right

The offer price significantly impacts whether your offer is accepted. To attract the seller’s attention, you should set your price at or slightly above the list price. If you’re going above the list price, you should be clear about where you set the line.

Show Proof of Prequalification

Remember to attach your preapproval letter. The letter shows your homeowner that you’re serious about buying the house. The preapproval can also help you determine what you can afford to buy.

Offer More Earnest Money

Essentially, earnest money is a good-faith deposit towards the purchase of the home. To stand out among the sea of buyers, you may choose to increase the earnest money to 5% or higher.

Waive Certain Contingencies

Contingencies are typically standard, but in a competitive market, you might choose to waive some of them to get on the seller’s good side. Your real estate agent can help you decide which contingencies to offer without exposing yourself to risk.

Include an Escalation Clause

If you’re worried about being outbid on the property, including an escalation clause can help. This type of clause automatically increases your offer prices to a maximum amount if another buyer outbids you.

However, you should be clear on how high you are willing to go and discuss this option with your solicitor and agent. An escalation clause could help persuade the seller to accept your offer, but it could also lock you into a pricier home.

Limit Your Ask for Extras

Limiting your ask for extras and avoiding padding the offer letter with fluff can also make your offer more appealing. You can leave out asking them to throw in the furniture or nitpicking over minor repairs that you can easily handle yourself.

Be Agreeable

Take time to understand the seller and the reason they are selling. Appealing to their needs when writing the offer letter can help improve your chances of getting approved.

Conclusion

Sending an offer letter for a property that you have fallen in love with can be a challenging time. You can improve your chances of proceeding with the transaction by ensuring you’re prepared for the purchase by having your preapproval ready and working with a real estate agent. You can also use the highlighted tips when writing the offer letter to boost your chances of getting your offer accepted.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

The house sale and purchase process involves various vital documents that must be completed for the sale to go smoothly. One of the documents you will need to go through and sign is a memorandum of sale.

If you’re buying or selling a house, it is essential to know what a memorandum of sale is, when it will be issued in the transaction and what happens once it has been sent. Your solicitor will explain what to expect in the memorandum of sale, but if you’re the type of person who likes to be prepared, this guide will walk you through everything you need to know about a memorandum of sale and its essence in a property transaction.

What is a Memorandum of Sale?

A memorandum of sale is a document commonly used when selling or buying property. It details all the essential information about the transaction, including property information and the buyer’s and seller’s information.

In most cases, a memorandum of sale will include the following information:

• Address of the property
• The agreed sale price of the property
• HM Land Registry number and proof of ownership
• Whether the property is a freehold or leasehold
• How much deposit will be paid
• Estimated date for exchange and completion
• Name, address and contact details for the buyer, seller and both solicitors
• Whether the sale is from a cash house buyer, via auction or with a mortgage
• Any fixtures and fittings that will be included
• Any conditions related to the sale, such as the repair work, should be completed prior to its completion.
• Any extra observations and notes relevant to the sale

The details in the memorandum of sale may change depending on the terms and conditions of the sale. The document will usually be issued by the estate agent and sent to the buyer’s and seller’s solicitors via email or post.

The buyer and seller might not be able to view the memorandum of sale as it contains confidential information about each party. However, their solicitor will act as the liaison and pass on the necessary information as needed.

Types of Memoranda of Sale

Several types of memoranda of sale are available depending on the nature of the sale. Some of the more common ones include the following: 

Selling Your House Quickly – Memorandum of Sale

When you’re selling your house to a quick-buying company, the process is slightly different, and as you can expect, the memo of sale will also be slightly different.

The sale process is much faster, and the completion and exchange date are firm. As such, there may be stipulations in the document, such as the provision of a cash advance. In these situations, the solicitors must have the essential information upfront. The buyer may also take out insurance to make sure the sale is guaranteed. Because of the change in the terms of sale, a quick sale will have a slightly different memorandum of sale.

Auction House Sale – Memorandum of Sale

The memorandum of sale at an auction is also slightly different in several ways. For instance, when the gavel or hammer falls, the buyer effectively exchanges contracts and is committed to the sale.

They will then be required to complete the memorandum of sale right away and pay the deposit and the auction house fees. ID checks are also done on the same day.

The memorandum of sale is then forwarded to both solicitors alongside the exchange contract and other relevant documentation.

This is the same case even with an online auction house process. However, online auction houses are faster and more efficient than traditional auction houses. But the memo of sale process is similar.

Is a Memorandum of Sale Legally Binding?

The memorandum of sale is not a legally binding document. Neither the buyer nor the seller needs to sign it, and both can withdraw from the sale after the document has been issued.

It is simply a supporting document to help with conveyancing and to ensure both parties have the information they need to commit to the sale. The sale is only legally binding once the contracts have been exchanged.

What is a Memorandum of Sale Used For?

A memorandum of sale records an agreed-upon property sale. It contains the purchase price, buyers’ and sellers’ full contact details, and the completion date, among other details pertinent to the house sale.

The document is drawn up by an estate agent or an auctioneer, or if you are using a house to buy a company, they will do it after the sale is agreed upon.

Once drafted, the memorandum of sale is then passed onto conveyancing solicitors as part of the conveyancing process, and they can present it to the seller or buyer.

The memorandum of sale document can look different and be customised depending on the company or estate agent that prepares it. However, the document’s essence is to provide essential details that will make the transaction move along smoothly.

Why is a Memorandum of Sale Necessary?

A memorandum of sale is necessary for several reasons. The most common one is it enables vital information to be provided in one document that is available to all the parties.

Using a memorandum of sale can save you unnecessary time going back and forth to confirm specific details that are readily available in the document.

Once the sale has been confirmed, the estate agent should circulate the document through the solicitors as quickly as possible. This allows the sale to proceed quickly and smoothly.

It is also recommended that you produce the memo even when you’re selling privately. However, you should keep in mind that it does not contain all the information and is not legally binding. Also, the buyer or the seller does not have to sign the memo of sale, as it is otherwise called.

When is the Memorandum of Sale Issued?

A memorandum of sale is issued once there’s an agreement to purchase or sell the property and is subject to the contract. It’s usually issued on the day the selling price of the property has been agreed by both parties.

Most estate agents are keen to get the memo of sale out to the solicitors as soon as possible to help the transaction complete faster. However, in some transactions, there can be delays, especially if the seller is still choosing their solicitor.

It is best to maintain contact with the estate agent to see where the process is at. You can also help the process move along by making sure you have all the information you need at hand prior to creating the memorandum of sale.

What Happens After You Send the Memorandum of Sale?

The memorandum of sale may be one of the first steps in a process that involves many more steps before the completion date. Once the solicitors receive the memorandum of sale and there are no legal issues, they can proceed with the transaction and complete it to receive the keys.

Some of the steps that occur after you get the memorandum of sale include the following:

Buyer Checks

After the memorandum of sale is sent, the next step is the buyer’s check. This checks to make sure that the person buying has the money to buy before you move on to anything else. This ensures the process doesn’t drag on, only to find out the buyer can’t pay the agreed price.

For this, you will need proof of a mortgage (from the mortgage lender), which tends to be known as a decision in principle or agreement in principle (AIP). This will normally last for 2 months before you have to get another one.

Conveyancing

The solicitor will start communicating about the next steps. This will include things like checking IDs, and they may need some fees or upfront costs to cover their service. The buyer’s solicitor will communicate with the seller’s solicitor.

Several documents will also need to be completed during the conveyancing process. Your solicitor will walk you through the process and ensure you understand each document’s purpose and meaning before appending your signature.

Other steps that can follow the memorandum of sale include searches, surveys, and, ultimately, the exchange of contracts and completion of the sale.

Final Thoughts

Although a memorandum of sale is not a legally binding document, it is an essential part of the property purchase and sale process. It is crucial to ensure the transaction moves along without any complications. Although you’re not required to sign the document, you should understand its content and the information it contains, as it could be pertinent in determining whether you should proceed with the purchase.

all year round, but trying to book them early can save some valuable time.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

When you find a property you like and want to purchase, your solicitor will most likely advise you to have a house survey to inspect it for any signs of issues or damage that might lead to costly repairs in the future.

Building surveys are designed to provide valuable information about the property, especially regarding structure issues, damp, and other dangerous hazards like asbestos. However, considering how timelines can be tight during this process, you might be worried about the survey taking too long. That’s why it’s natural for potential homeowners to wonder how long a house survey takes.

What is a House Survey?

A house survey examines the condition of your home and is an essential part of the home-buying process. It involves an expert inspecting your property and highlighting anything that might be a concern, unsafe, or will cost you money down the line.

Depending on the type of survey you get, the surveyor will tell you if there are any structural problems with the property, such as unstable walls or subsidence. The surveyor can also highlight any major repairs that are needed, such as fixing the roof or chimney.

It’s worth noting that there are several types of surveys you can get, and each one’s timeline can be different. The type of survey you choose will depend on your personal choice, the type of property you are buying, and how thorough you want to be.

What are the Different Types of Surveys?

There are three levels of the RICS house survey:

• The Level 1 Home Survey: This is also called a condition report. It is the most basic report and gives an overview of the property’s condition.
• Level 2 Home Survey: This is also called the Home Buyer’s Report. It provides an overview of the condition of the property based on a visual inspection and is suitable for most modern and conventional properties.
• Level 3 Home Survey: Also called a building survey. It is the most detailed survey. It provides a comprehensive report and analysis of the property’s construction and condition. This survey is ideal for older or unusual properties.

Depending on the type of survey you choose and how detailed it is, the time it takes to complete the survey and provide the report.

How Long Does a Level 1 Report Take?

A condition report is the most basic house survey you can get for a property. This basic assessment usually takes around an hour, depending on the size of the property.

How Long Does a Level 2 Survey Take to Carry Out

The homebuyer’s report is more detailed than the Level 1 report and, therefore, takes more time to complete. Depending on the size and condition of the property, this survey can take anywhere between 90 minutes and 4 hours.

How Long Does a Level 3 Survey Take to Carry Out?

This is a more in-depth survey that can take up to 8 hours to complete. It could be longer depending on the type of property, its size, age, and condition.

How Long Before the Survey Is Done?

The time it takes to complete the survey is more predictable than the time it will take before it is completed.

How long it takes before the survey is done will depend on how quickly you book it. Once you make an offer and it has been affected, it’s a good idea to get the survey booked. This shows you’re serious about the buyer and keen on the move, but it will also get you to the point of exchange and legally owning a home quicker.

The type of surveyor will also determine how long it takes to complete the surveyor. It is essential to shop around and get a few local surveyors and compare. This will not only save you money but also ensure you work with a more efficient surveyor who can complete the process in a shorter time.

When Can I Receive the House Survey Report?

Several elements will affect the time it takes to get a house survey done. These include:

The surveyor’s diary

Once you settle on a surveyor, you will have to wait for them to be available to visit the property and conduct their report. For busier firms, this could take some valuable time.

The seller’s diary

The surveyor and the seller must agree on a suitable time to see the property. The surveyor will need complete access to the property. If you’ve been having problems getting the seller on the phone, you can rest assured that the surveyor might have the same problem, which could drag the survey longer.

The survey process

Once the surveyor arrives at the house and has access, most types of surveys can be completed on the same day. The longest surveys take about 8 hours.

Writing the report

After completing the survey, the surveyor must write a report. The length of the report will depend on the type of survey undertaken and the depth the surveyor intends to go into.

The level of detail and the length of the report can vary greatly. As a result, the writing of the report could take anywhere from a few hours up to 10 working days to conclude.

Can You Speed Up the Survey Process?

Time is of the essence when buying a house. Not only because you can’t wait to move into the new house but also for legal reasons because you have a conclusion date. Anything you can do to move the process along faster will come in handy.

One way to keep things moving is to deal with the surveyor directly. Working through a network will slow down the process, as you have to communicate through middlemen.

Unfortunately, most surveyors are busy all year round, but trying to book them early can save some valuable time.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

The process of owning a home seems straightforward until you start looking for one. Once you start looking for a house, you will immediately realise there are multiple steps to follow and jargon that you need to familiarise yourself with.

You will find words like ‘exchange of contracts’, ‘conveyancing’, and ‘settlement’, among others. You might also come across another common term in the real estate world, ‘under offer.’ Here is a closer look at what it means and how it could impact your dream of owning a home if you like a property listed as ‘under offer.’

What Does it Mean When a House is Under Offer?

Under offer refers to when a buyer presents an offer that the buyer is still considering. The property in question hasn’t been sold, and the transaction hasn’t become legally binding.

The term ‘under offer’ is commonly used by estate agents in marketing and advertising to imply that an offer has been put forward on the property with the aim of making potential buyers act more urgently.

When a property is described as being ‘under offer’, it does not mean the sale has been finalised or is legally binding. Under offer simply means that a buyer has put forward an offer, and the seller is currently considering it. However, another buyer can still make an offer for the same property for the seller to consider.

Conditions to be Met When a House is “Under Offer”

When a property is listed as ‘under offer, ‘ certain conditions are attached. The property will only proceed to the final sale once these conditions are met. These include:

Subject to Finance

Usually, a buyer makes their offer subject to securing finance to buy the property. Using this clause gives the buyer time to do this. Some buyers may even have mortgage pre-approval from a lender but run into issues when they go to have their mortgage application unconditionally approved.

If the buyer is unable to get a home loan or the lender values the property at less than the sale price, then the property will no longer be under offer and will be available again to other potential buyers.

Subject to Sale

This is another condition that is placed on a property while it’s under offer. It is commonly attached when the buyer has to sell their property first in order to finance their new home. There is a wait period with this condition, which can make things more difficult. If it takes longer than expected for the buyer’s property to sell, the seller may want to pull out.

Also, the buyer may not receive the price they expected from their sale and, therefore, fall short of what the seller wants for the home. Either of these cases may result in the offer falling through and the home becoming available again.

Subject to Building and Pest Inspection

With this condition, the buyer sources qualified inspectors to give reports on any existing or potential problems with the home.

Common issues that might be considered problems include drainage issues, cracks in the slab, termites, problems with roofing, and mould. These issues could result in the buyer pulling out of the sale.

What is the difference between Under Offer and Sold STC?

Besides the ‘Under Offer’ condition, you might also stumble on another condition: ‘Sold, Subject to Contract’ or ‘Sold STC.’ Both mean the seller has accepted the offer, but the sale is still not legally binding. The seller and the buyer will commence the conveyancing and work towards an ‘exchange of contracts, ‘ at which stage the deal would become legally binding.

You can still make an offer on the house labelled as ‘Sold STC’, but some estate agents may be reluctant to allow offers at this time as this means that the deal has been agreed upon and the parties have started to follow the conveyancing process. Submitting offers on a property labelled as ‘Sold STC’ can derail the earlier transaction.

What Does Under Offer Mean in Scotland?

The conveyancing process in Scotland is slightly different from that in other regions, such as Wales and Scotland. A good example is the use of the term ‘under offer.’

In Scotland, a property labelled as ‘under offer’ means that the buyer’s solicitor has made an offer on behalf of their client. However, in other regions, it means the seller has accepted the offer in writing.

Additionally, Scotland doesn’t have a Sold STC stage. Instead, it’s called the ‘STCM’ stage, which means Sold Subject to Conclusion of Missives. Missives are the legal paperwork required to buy property in Scotland.

In most areas across the UK, under offer is a somewhat vague term that can represent different stages of the buying process, depending on the circumstances. However, in Scotland, it is an essential term among conveyancers and estate agents that shows the process is being finalised.

Can You Make an offer on a House That is Already Under Offer?

Another buyer can make an offer on a house that is already listed as ‘under offer.’ The contracts have not yet been exchanged, and the sale is not legally binding, which allows other prospective buyers to present the seller with new offers.

But, when you reach the stage where you exchange contracts, that is when you are legally committed to the sale. Some estate agents may limit the number of viewings on a property that is ‘under offer’ or ‘Sold STC,’ but it will still be on the market.

How Long Does a House Stay Labelled as Under Offer?

A house that is marked as ‘under offer’ doesn’t stay that way for long. Both parties will likely want the transaction to conclude quickly because an offer has been accepted.

Other prospective buyers can still make an offer, but as soon as the contracts are signed and exchanged, the transaction will become legally binding. Both parties will be in a hurry to reach this stage.

The length of time the house stays on the market will depend on how quickly or efficiently the transaction progresses. The buyer will still have to complete various tasks and arrange a mortgage in principle, which lengthens the time it takes to exchange contracts. On average, it could take up to 12 weeks for the property to go from ‘under offer’ to legally sold.

Closing Remarks

When a home is under offer, it cannot be sold to anyone else. However, because offers to buy can often fall through, the seller is still allowed to keep the property on the market and hold an inspection.

If you find yourself in a position where you’re interested in a property but it’s under offer, you can express your interest in the property to the real estate agent. If the initial deal falls through, the agent is likely to approach you.

Finding a property you like listed ‘under offer’ can be disheartening. However, it doesn’t always mean that you can’t purchase the property. Your chances of submitting an offer and succeeding are minimal and depend on the previous deal falling through.

Hiring a conveyancing solicitor in London when buying or selling property is a no-brainer. Get in touch with us!

The process of purchasing property is a detailed one with various steps that need to be executed at different stages. When purchasing the property, your solicitor will need to run various searches before buying the house. Some are mandatory, while others are simply a precaution that could save you significant problems down the road.

These searches are necessary parts of buying a home and should be carried out diligently. They can reveal important information about the home, which can make it easier to determine whether you should proceed with the purchase or back out of the contract before you’re in too deep.

What Are Conveyancing Searches?

Conveyancing searches or property searches are enquiries made by your solicitor to find more information about a property you intend to purchase. As part of their due diligence, the solicitor will carry out a variety of searches. Some of the searches are done by local authorities, while others are conducted by private entities, depending on the type of search in question.

Why Do I Need a Conveyancing Search?

When purchasing a property, you should know that the seller is not obligated to provide certain details about the property before the sale. Even if they do, the information they provide might be inaccurate or out of date. A conveyancing search is the only way you can enter the transaction with detailed and accurate information that might impact your decision to buy the property.

You should carry out the searches before the contract is exchanged. If necessary, you can use the information from the searches to raise enquiries with the seller.

After the exchange of contracts, you will have no recourse if something comes to your attention. However, some searches from official sources are backed by guarantees, which gives you peace of mind about the details of the property.

Cash buyers are not legally required to conduct searches. However, it is still a good idea to search to verify information and ensure the property is worth purchasing. If you’re purchasing the property through a mortgage, the lender will most certainly insist that you carry out the searches to minimise your exposure to risk and, consequently, theirs.

Conveyancing searches can also determine whether the property in question has land disputes, which can include ownership issues and boundary disputes. Without searches like a land charge search, you may have to deal with dispute issues that arise after the purchase.

Which Conveyancing Searches Do I Need?

There are quite a number of conveyancing searches you should conduct before entering into a contract. Some are more important than others. The three most common conveyancing searches and those usually required by mortgage lenders include:

Local Authority Search

The local authority search covers quite a number of issues about the property. These include planning and building relations and whether the road immediately outside the property is adopted or not. The search will also determine whether there are any nearby roadwork or railway schemes and whether the property is listed in a conversation area.

Water and Drainage Search

The other important conveyancing search you need to consider is the water and drainage search. This reveals whether the property is connected to the main water supply and the public sewer for the drainage of foul water and surface drainage.

The search will also reveal the location of the water mains and whether there is a public sewer within the boundaries of the property, which may affect your ability to extend the property.

Environmental Search

There is also the environment search, which unveils important information about the property, such as the contamination risk from nearby landfill sites, former or nearby industrial uses, ground stability, flood risk rating and radon gas hazard.

This search will give a certificate stating whether the search has passed and, if not, what further action needs to be taken.

Besides these three conveyancing searches, there are additional searches that might be necessary depending on the location of the property. A good example is properties in areas with a mining history that require a mining search.

These searches might be necessary if one of the first three searches highlighted above points to an issue. For instance, if an environmental conveyancing search reveals a flood risk, a flood search may be necessary to provide additional information on the risk.

Some of the other conveyancing searches you can consider include the following:

Planning Search

A planning search reveals the planning history of the property and the surrounding neighbourhood. The Local Authority search only focuses on the planning history of the specific property. It does not reveal anything about the neighbouring properties.

Chancel Liability Search

This is a medieval liability search that can be conducted to help pay for the cost of church repairs. According to a law passed in 2013, any liability should now appear on the title deeds for the property, but there are still situations where this is not the case, and this search can help with that.

Commons Registration Search

A search is recommended if a property borders common land, is in a rural area, or borders a village green. This is in accordance with the Commons Registration Act of 1965. This property search should be carried out when purchasing agricultural land.

Mining Search

If the property is situated in an area with a previous or current mining history, it is at risk of being built on unstable ground. This search is commonly carried out for the benefit of the mortgage lender.

Land Charges

A land charge search is necessary if you’re dealing with unregistered land. It must detail any bankruptcy proceedings attributed to the owner of the land. It also highlights whether there are any restrictions on the use of the land, estate contracts, and mortgages.

Other conveyancing searches that can be conducted on a case-by-case basis include:

• Flood search
• Energy and infrastructure search
• High-speed rails 2 (HS2) search
• Underground railways search
• Dev assess search
• Disadvantage areas search relief

Your conveyancing solicitor can discuss with you the searches needed for your property depending on the location and any concerns they might have about the properties.

How Much Do Conveyancing Searches Cost?

The cost of conveyancing searches varies depending on the type of search and the property’s location. This is mostly common with the Local Authority search results.

The approximate costs of some of the more common searches undertaken are as follows:

• Local Authority searches £150 and £400 depending on your Local Authority.
• Water and drainage search – £60
• Planning search – £35
• Flood search – £24
• Chancel repair liability indemnity insurance – £5.20

These are only estimates and may vary. The costs may also be adjusted, so it is essential to confirm the cost before conducting the searches.

Bottom Line

Conveyancing searches are an invaluable part of the property-buying process. They reveal valuable information that helps you determine whether you’re getting a good deal or the transaction is riddled with trouble.

Besides the three major searches that you need to do, especially if you’re funding the purchase through a mortgage, your conveyancing solicitor should be able to advise on any additional searches you need to minimise risk depending on the location of the property and other factors.