Residential leasehold purchase
Our fees and the disbursements payable for a residential leasehold purchase depend on a number of factors, therefore we always provide our clients with a bespoke quote before accepting instructions to act in a purchase.
Our fees cover all of the work required to complete the purchase with a mortgage of your leasehold home, including dealing with registration at the Land Registry and dealing with the payment of Stamp Duty Land Tax (Stamp Duty) if the property is in England, or Land Transaction Tax (Land Tax) if the property you wish to buy is in Wales, and in either case if the purchase is in fact subject to such tax.
- Legal fee ranging between £895 and £4,995 depending on the following factors:
- Purchase price
- Timescales required for transaction
- Mortgage and third party financing
- Property has been altered
- Access issues
- Issues arising from your survey of the property
- Issues with the legal title and with the lease
- Issues with service charges or the management of the property
- Is the purchase an assignment of an existing lease or is a new lease being granted
- Is an extension or variation of the lease required
- Is the property being purchased as part of a shared ownership scheme, help to buy or right to buy scheme
- Electronic money transfer fee £30 per transfer (usually one transfer required per purchase)
- Fax, telephone, photocopying and incidental expenses £25
- VAT payable on all of the above at 20%
Disbursements are costs related to your leasehold purchase that are payable to third parties, such as Land Registry fees. We handle the payment of the disbursements on your behalf to ensure a smoother process for you and your lender. There will also be disbursements which will be set out in the individual lease of the property you are buying. The disbursements which we anticipate will apply are set out separately below. This list is not exhaustive and other disbursements may apply depending on the terms of the lease. We will update you on the specific fees upon receipt and review of the lease and related documents from the seller’s solicitors.
- Search fees for local, water and drainage, environmental and other reports: these depend entirely on where your property is located and on what you/your lender require. Often the fees are between £250 and £600.
- Companies House search fee if required of between £40 and £50.
- HM Land Registry search fee £3
- HM Land Charges Registry fee for bankruptcy search £2 per borrower
- HM Land Registry fee to register your purchase: this depends on the purchase price of your property, see http://landregistry.data.gov.uk/fees-calculator.html
- Stamp Duty or Land Tax: This depends on the purchase price of your property and other factors. You can calculate the amount you will need to pay by using HMRC’s website or if the property is located in Wales at https://beta.gov.wales/land-transaction-tax-calculator
- VAT payable at 20% on local search fees
For an average leasehold residential purchase with a mortgage of a property for £800,000 in the LB of Camden where local, drainage, plansearch and chancel searches are required, our estimated fees inclusive of VAT total £2,406 and the estimated disbursement costs inclusive of VAT total £660, making an estimated total expenditure (aside from Stamp Duty/Land Tax of £30,000) for the purchase of: £3,066.
Disbursements linked to the lease
- Notice of Transfer fee – This fee is required by the freeholder and / or the management company and can be difficult to estimate. Sometimes the fee is set out in the Lease and sometimes it is set out in the management pack. Often the fee is between £50 and £150.
- Notice of Charge fee – (if the property is to be mortgaged) – This fee is required by the freeholder and / or the management company and can be difficult to estimate. Sometimes the fee is set out in the lease and sometimes it is set out in the management pack. Often the fee is between £50 and £150.
- Deed of Covenant fee – If the Lease requires this Deed, this fee is required by the freeholder and / or the management company for the property and can be difficult to estimate. Often it is between £75 and £300.
- Fee for issuing new Share Certificate (where applicable) – this fee is required by the freehold company and can be difficult to estimate. Often it is between £75 and £300.
- Certificate of Compliance fee (where applicable) – this fee is required by the freeholder and / or the management company and can be difficult to estimate. Often it is between £75 and £300.
These fees vary from property to property and can on occasion be significantly more than the ranges given above. In some cases VAT is payable but this depends on whether the freeholder or managing agents are VAT registered. We will give you an accurate figure once we have sight of your specific documents.
You should also be aware that ground rent and service charge are likely to apply throughout your ownership of the property. We will confirm the ground rent and the anticipated service charge as soon as we receive this information.
The exact stages involved in the purchase of a residential property vary according to the circumstances. However, a typical transaction involves the following stages, all of which would be covered by our fee set out above:
- Take your instructions and give you initial advice
- Check finances are in place to fund purchase
- Receive and advise on contract, lease, title documents and service charge and management information
- Carry out searches
- Consider survey of property
- Obtain planning, building regulations consents, guarantee and service charge documentation if applicable
- Make any necessary enquiries of seller’s solicitor on the title, lease and service charge information
- Give you advice in writing on all documents and information received
- Go through conditions of mortgage offer with you
- Send final contract to you for signature
- Agree completion date (date from which you own the property)
- Exchange contracts and notify you that this has happened
- Draft Transfer deed
- Obtain pre-completion searches
- Arrange for all monies needed to be received from lender and you
- Complete purchase
- Deal with notification of the purchase and any mortgage to the freeholder and transfer to you of the seller’s share in the freehold if applicable
- Deal with payment of Stamp Duty/Land Tax
- Deal with application for registration at Land Registry
How long will my purchase take?
How long it will take from your offer being accepted until you can move in to your property will depend on a number of factors, such as
- Whether there is a chain, and if so, the readiness of the other parties in the chain to progress the transaction
- Whether mortgage finance is needed and the speed at which your mortgage application is processed
- If you are buying a new build property
- If the legal title to the property is defective or unregistered, or has other problems
- If the lease is defective or if it has to be extended
- If your survey is not satisfactory
- If building regulations or planning consent have not been obtained
- If crucial documents needed to progress the transaction are not provided by the seller
The average process takes between 6 and 8 weeks.