When transferring ownership of a property in the UK, there are a number of key terms that an investor needs to be aware of to ensure that the process goes smoothly. Some of these terms include ‘searches’, ‘land registry’, ‘title deed’, ‘completion’, ‘stamp duty land tax’ and ‘conveyancing solicitor’.
In this article we will look at the 21 most important terms in the conveyancing process in the UK. These terms are the key to understanding the conveyancing process and making sure that the transaction is completed successfully.
- “Searches” Searches are carried out to identify any issues that could affect the property, such as planning permission and building regulations.
- “Land Registry” The Land Registry is responsible for maintaining the register of land ownership in England and Wales. The process of transferring ownership involves the new owner of the property registering it with the Land Registry.
- “Title Deed” Title Deeds are legal documents that prove ownership of a property. During the conveyancing process, the buyer’s solicitor will check the title deed to ensure that the seller has the legal right to sell the property.
- “Completion” Completion is the final stage of the conveyancing process where the transfer of ownership is completed and the buyer becomes the legal owner of the property.
- “Stamp Duty Land Tax” (SDLT) SDLT is the tax that a buyer must pay when purchasing a property in the UK. The amount of tax depends on the value of the property.
- “Conveyancing solicitor” A conveyancing solicitor is a legal professional who specialises in the conveyancing process. The solicitor is responsible for carrying out the necessary checks and information searches, preparing the legal documents and completing the transaction on behalf of the buyer.
- “Mortgage” A mortgage is a loan that is taken out to finance the purchase of a property. The conveyancing process will involve the buyer’s solicitor liaising with the mortgage provider to ensure that all the necessary funds are in place to complete the transaction.
- “Exchange of contracts” The exchange of contracts is a key stage of the conveyancing process in the UK. It is the point at which the buyer and seller legally commit to completing the transaction. Once contracts are exchanged, both parties are committed to the sale/purchase and a completion date is set.
- “TR1 form” The TR1 form is a legal document used to transfer ownership of a property in England and Wales. It is completed by the seller and buyer and submitted to the Land Registry to update the title register. The TR1 form contains details of the property, the buyer’s and seller’s details and any other information about the sale, such as the purchase price and completion date. It is usually completed by a solicitor or notary acting on behalf of the buyer.
- “Fixtures and fittings” Fixtures are items attached to the property and are therefore included in the sale. Fixtures are removable items that are not attached to the property and are not included in the sale unless otherwise agreed.
- “Energy Performance Certificate” (EPC) The EPC is a document providing information on the energy efficiency of the property. It is required by law for most properties that are bought, sold or rented in the UK.
- “Leasehold” A leasehold tenancy is where the buyer owns the property but not the land on which it stands. Instead, the buyer has a lease with the landowner (usually the freeholder) for a fixed term, usually between 99 and 999 years.
- “Freehold” Ownership without restriction – freehold ownership is where the buyer owns both the property and the land on which it stands.
- “Conveyancing” Conveyancing is the legal process of transferring ownership of a property from the seller to the buyer.
- “Vendor/seller” It is another term for the seller in a property transaction. It is self-explanatory.
- “Special Purpose Vehicle” (SPV) An SPV is a legal entity created for a specific business purpose, such as ownership of a property or group of properties.
- “Electrical Installation Condition Report” (EICR) An EICR is a report providing information about the safety and condition of the electrical installation in a property. It is usually issued for a 5 year period.
- “Gas Safety Certificate” (CP12) The CP12 certificate is a legal requirement for landlords to ensure the safe use of gas appliances, fittings and flues in their rented properties. It is issued for one year or until a change of tenant (whichever is sooner).
- “Assured Shorthold Tenancy” (AST) An AST is the most common form of tenancy agreement used in the UK for private residential properties. It provides certain rights and obligations for both the landlord and the tenant.
- A “House of Multiple Occupation” (HMO) HMO is a type of rented accommodation where multiple tenants who are not members of the same household share facilities such as kitchens and bathrooms. HMOs must be licensed and meet standards of safety, space and hygiene.
- A “single let” It is a rented flat where one tenant or family rents the whole flat. HMOs are let on a room-by-room basis to multiple tenants, while ‘single lets’ are let as a whole to one tenant or family. HMOs can generate higher yields but require more management and maintenance and may have more stringent requirements and licensing. “Single lets” have less management and maintenance requirements but the rental yield may be lower.
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Prices for the issuance of EPCs, CP12s and EICRs may vary depending on the location and provider of these services. However, they will usually be as follows
- EPC: The cost is usually between £50 and £120.
- CP12: The price is usually between £50 and £150.
- EICR: The price is usually between £100 and £300.
However, it is important to note that these prices can vary considerably and can be influenced by many factors such as the size and location of the property, equipment requirements and more. It’s best to get quotes from several suppliers so you can compare prices and choose the best option.