Conveyancing Fees explained

When purchasing a shared ownership property (or any property for that matter), you will need to instruct a solicitor to act on your behalf.  It is worth getting a few quotations from different firms for a comparison of costs, but it is important to look beyond the “headline fee” to find out what each solicitor is actually charging for their services. 

What fees should you expect in your quotation?

Legal Fees – this is the fee the solicitor charges for their services. This can differ depending on the purchase price of the property and whether it is leasehold or freehold. A leasehold purchase tends to be charged more as there is more work involved.

Bank Transfer fees – this is a fee for organising the bank transfer of the purchase monies to the seller.

Preparing Stamp Duty Land Tax (SDLT) form – HMRC must be notified about property transactions on a Stamp Duty Land Tax (SDLT) return. This must be within 14 days of the date you complete your purchase, even if you do not owe any tax.  Your solicitor will do this on your behalf and charge a fee for doing so.

Mortgage lender fee – This is the fee a solicitor charges for acting for the mortgage lender.

These are all fees charged by solicitors for various aspects of the work they do for you. Most firms charge for the above items, but the amounts vary from firm to firm, resulting in very different final charges.

Some firms charge other fees for dealing with other aspects and some of the fees charged by a firm of solicitors may not be immediately obvious from their quotation and may be contained in their Terms of Service, so make sure that you get a copy of these before deciding who to instruct.

What about “disbursements”? 

These are expenses payable to third parties as part of the conveyancing transaction. They are paid via your solicitor to the third party; however, they can still vary from firm to firm.

Bankruptcy search fee – this costs £2 per name searched and should be the same irrespective of which firm you instruct.

HM Land Registry Search fee –This is another low-cost search and irrespective of which firm you instruct, the fee payable to the Land Registry will be the same.

Search fees – There are also searches that the solicitor needs to do as part of the conveyancing process, such as local search, flood search, water and drainage search, environmental search and chancel repair search. Depending on which provider a solicitor uses and which searches they choose to do, the amount quoted may vary from firm to firm. The searches are sometimes supplied by the Housing Association’s (HA’s) solicitors at a minimal cost if buying a new build property.

Land Registry registration fee – This is a fee for the registration of your title to the property.  There is a prescribed fee scale, based on the purchase price of the share, plus rent. Irrespective of which firm you instruct, the fee payable to the Land Registry will be the same.

Stamp Duty Land Tax – as this is a tax there is no flexibility here and the rules are the same irrespective of which firm does the conveyancing. The amount is calculated based on factors such as the price of the property, the share being purchased, and whether you are a first-time buyer.

Finally, there are some other things which a buyer of a new build shared ownership property ought to budget for:

1. It is standard practice for the HA’s solicitors to charge certain fees to the buyer. These vary depending on which firm of solicitors the HA uses and at the time of contacting a prospective solicitor for a quotation they will not know the level of those fees.
2. It is possible that there may be further fees payable to a superior landlord or managing agent.
3. HAs generally ask buyers to pay on completion the rent and service charge up to the end of the month of completion and for the whole of the following month. This could amount to paying nearly two months up front if you complete at the beginning of the month.

These expenses will be the same irrespective of which firm of solicitors the buyer instructs as their solicitor has no means of influencing them whatsoever, however many firms fail to mention these items in their quotation and so these costs can come as a nasty surprise.

In conclusion, when looking at quotations, it is important to make sure you read the quote carefully and don’t be afraid to seek clarification.  Be careful of cheap headline fees because often they aren’t as economical as they seem.  There is lots of legal jargon used by solicitors and quotations are often presented in a confusing way with lots of hidden charges.

Although this article focuses on fees, it is worth noting that price is only one factor. Buyers should also consider experience, expertise, recommendation and customer service when choosing their solicitor.