Conveyancing Fees Explained
Conveyancing Fees Explained
Buying a home is usually the biggest financial transaction a person will make, however beyond the asking price, many people are unaware of the other costs involved in the sale or purchase of a property.
One such area is understanding what conveyancing fees are, what these costs include, who pays and when.
This guide explains what conveyancing fees are and details of what they include.
What are conveyancing fees?
Conveyancing is the legal and administrative process when you are buying or selling a property, extending a lease or remortgaging. Conveyancing fees are paid to your solicitor or conveyancer for undertaking this legal service when you sell or buy a home.
The amount you pay in conveyancing fees will depend on many factors, including the type of property you are buying or selling. Generally speaking, apartments and brand-new properties are more complex than second-hand houses. More complex means more legal work, and more legal work equals a higher conveyancing fee. Typically, conveyancing fees are made up of a legal fee and disbursements. The legal fee is the fee you would pay your conveyancer for their time in undertaking the work required.
In addition, there will be some other additional charges and disbursements that you will also need to pay. These are fees charged by third parties which the conveyancing or solicitor pays on your behalf. Most of these are standard and won’t change depending on which conveyancer you choose.
What is the average cost of conveyancing in the UK?
According to research by Property Solvers, the average cost of conveyancing fees is currently £1,187.98 for the sale and £1,265.65 for the purchase of a freehold property and £1,401.99 for the sale and £1,491.83 for the purchase of a leasehold property. This is based on data from 100 conveyancing firms in England and Wales. This amount is for the conveyancing fee and VAT only and does not include disbursements.
The conveyancing fees and disbursements are only one element of moving costs; you should also consider the other costs involved in selling your home. These can include refurbishment, mortgage fees and removals.
Why is conveyancing so expensive?
A question that is often asked is why does conveyancing cost so much? However, the truth is that conveyancing fees vary depending on factors such as the cost of the property, property tenure, if it is a new build, the local area, and if there are any increased risks that may affect the transaction.
The cost of disbursements and third-party payments can also vary and are beyond the control of any conveyancer or solicitor. The largest outlay on any property transaction is usually estate agents’ fees on a sale and Stamp Duty Land Tax on a purchase. In comparison, the conveyancer’s fee often pales in comparison.
The complexity of the property transaction and the time involved for your conveyancers has a large impact on your final costs, so it is important to be upfront about the circumstances of your sale or purchase from the start to allow your solicitor to give you an accurate quote.
It may be tempting to look at cheaper options for your conveyancing, however to ensure the smooth handling of your transaction and quick resolution to any legal problems that may arise, it is highly recommended that you seek the assistance of a licensed conveyancing firm such as Enact.
There are other ways to help keep your financial costs down when moving home such as choosing a less popular day to move, completing any deep cleans yourself and putting items into storage if you are downsizing.
What do conveyancing fees include?
Your conveyancing fee quote should include the costs you will need to pay in disbursements and third-party fees.
Below is a list of some of the more common conveyancing fees you will see:
Stamp Duty (SDLT) is a Government Tax which may be payable when buying a property or land. To find out the exact amount of Stamp Duty you must pay, which will depend on your personal circumstances, use the Government Calculator.
If you are buying a property with the aid of a mortgage, you will need conveyancing searches and they are highly recommended if you are a cash buyer. Typically, these consist of a local authority search, water and drainage search and an environmental search. The role of your conveyancer is to order and then review the content of these searches and report back to you accordingly. The price of searches can vary, so best to get an online conveyancing quote.
This fee is charged for every money transfer your conveyancer makes on your behalf. It covers the administrative work that is involved sending monies through electronic banking systems.
Your conveyancer will be required to submit a Stamp Duty Land Tax Form irrespective of whether you pay stamp duty or not. This fee covers the legal and administrative work involved to submit the form on your behalf.
Land Registry searches are split into two sections: a bankruptcy search is carried out to check that you have not been made bankrupt. Furthermore, a Land Registry priority search is carried out before completion to check no adverse entries have been added to a registered property title since it was last inspected. This search also gives a priority period for you to register your interest at the Land Registry following completion.
A Land Registry Fee is a fee charged by the Land Registry to transfer the property into your name once the process has been completed.
Running Anti Money Laundering (AML) checks is an important factor when it comes to conveyancing. The checks your conveyancer will complete help to ensure the property purchase is not being used for the purpose of laundering money. They will also confirm that the funds being used to buy the property are coming from a legitimate source.
FAQs
Who pays for conveyancing?
Who pays the conveyancing fees, buyer or seller? The simple answer is both. The seller pays their own conveyancer’s fees and the buyer does likewise.
Fees will differ depending on whether you are buying, selling or both. Costs tend to be higher for those purchasing a property than selling; this is primarily due to there being higher third-party costs. There are also more actions a conveyancer needs to take on a purchase, e.g. checking a mortgage offer and submitting the Stamp Duty Land Tax return.
Make sure you discuss your conveyancing fees and what you are expected to pay with your conveyancer at the start of the process.
When do you pay conveyancing fees?
When you instruct a conveyancer or solicitor you will need to send them an ‘upfront payment on account‘. This is to cover initial third party costs relating to disbursements including searches, online ID checking fees, the purchase of official copies from HM Land Registry etc.
If you’re buying then there is nothing more to pay until you exchange contracts where you typically need to pay 10% of the purchase price (however, this is not always the case and your conveyancer will advise).
The final balance of the money is paid the day before completion (this includes stamp duty, land registry fee and the balance of your conveyancer’ fees).
Is online conveyancing cheaper?
Conveyancing traditionally was a brick and mortar-based industry, with solicitors serving buyers and sellers in their local area. These days there are other options for home movers including online conveyancing.
Online conveyancing costs are frequently based on a fixed-fee basis rather than by the hour, meaning they can be more cost effective by comparison to traditional solicitors. The majority of your costs will be included within that fixed-fee, however it is wise to make sure you have a breakdown of what is included, and understand any implications of changes of circumstances on your conveyancing costs.
With improvements in technology, such as biometric identification and online forms, a lot of the conveyancing process has now been digitalised meaning the work is more streamlined and can save time by not having to use old fashioned practices.
How do conveyancing solicitors charge if the sale falls through?
There are many reasons why a property transaction falls through, but what happens to your conveyancing fees if that happens?
The fees you are liable for if your sale falls through will largely depend on what sort of fee structure and terms & conditions you have agreed to. However, you will likely still be liable for fees relating to work that has already been completed by your solicitor and any third-party disbursement costs.
The more time that has been spent on your transaction the higher the fees you will need to pay in the event of a fall through.
It is important to speak to your conveyancer at the start of the process and find out what exactly will happen if you are unlucky enough to have your property sale fall through.
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