Buying an investment property? You’ll need a conveyancing solicitor to carry out the legal side of the purchase. Here’s everything you need to know about buy-to-let conveyancing.
What is buy-to-let conveyancing?
Buy-to-let conveyancing is the legal process for transferring ownership of a property to you as an investment you intend to let out. It begins when your offer on a property is accepted and runs through to the day you receive the keys.
Who does buy-to-let conveyancing?
We would recommend using a conveyancing solicitor to carry out the buy-to-let legal process on your behalf. If you aren’t buying with a mortgage it is possible to do it yourself but it is difficult and time-consuming. Find out how to find the right conveyancer for you.
The buy to let conveyancing process
There are several important legal stages in buying an investment property:
- Your offer is accepted, and you instruct a conveyancing solicitor.
- Your conveyancer contacts the seller’s solicitor to get the contract pack.
- They then check the contracts, raise enquiries and carry out necessary local searches.
- The conveyancing solicitor should make sure there are no restrictions on renting out the property. They should also be able to advise you on wider issues such as tax implications or environmental and planning law. So any questions you have about your future plans for your investment property are best asked and explored now.
- If you are buying with a mortgage your solicitor will check you have the right type of mortgage. You will need a buy-to-let mortgage rather than a residential mortgage.
- Your solicitor should draw up a contract for you to sign and also help you with any secondary legal documents needed with your buy-to-let such as a deed of trust or a tenancy in common agreement.
- A completion date is agreed and both parties’ solicitors exchange contracts. You are now legally committed to the purchase.
- Your conveyancer prepares a transfer deed and sends it to the seller’s conveyancer ready for completion.
- They then draw up a completion statement and carry out any pre-completion searches. If you are buying with a mortgage your conveyancer will ask your mortgage lender to advance the money.
- On completion day your conveyancer will send the purchase amount to the seller’s solicitor once they know they have vacated the property.
- Your solicitor or conveyancer sends any stamp duty due to HMRC. With a buy-to-let property you may have to pay the additional stamp duty rate.
- Finally, your solicitor registers the property in your name with the Land Registry.
With buy-to-let conveyancing your solicitor may also be able to help you with the legal documents you need when renting out your property such as a tenancy agreement.
Buy-to-let conveyancing fees
How much you will pay for buy-to-let conveyancing depends on a number of factors. For example, the location of the property will affect the cost, particularly if the area means there will be additional work such as searches due to a nearby river or coal mine.
Typically, the legal fees are £850-£1,500. On top of this you will need to pay additional fees for searches, taxes and other admin fees. You can find out more with our guide to conveyancing fees.
Conveyancing for your buy-to-let mortgage
If you are using a mortgage to purchase your investment property you will need to arrange this yourself. During the conveyancing process your solicitor will request a copy of your mortgage offer from your lender. They will then go through the conditions and flag anything you need to be aware of.
Your lender will require a mortgage valuation which usually takes place during the conveyancing period. The mortgage lender arranges this as they want to know the property you are buying has sufficient value to cover the loan.
You also need to have any other surveys done during this time. What type of survey you should get will be down to you. You can read our guide to the different types of survey to get more information.
Before exchange of contracts your lender will also require you to arrange buildings insurance. Once you have exchanged you are responsible for the property, so it is in your best interests to take out insurance to protect yourself.