How much are solicitor’s fees when buying a house?
How much are solicitor’s fees when buying a house?
We’ve heard all about scary things like mortgages and Stamp Duty, but they seem like far-off concepts until you’re actually faced with paying them. A particular area you may not have thought of are solicitor’s fees. There are plenty of legal hoops to jump through when you’re buying a house, and often people choose to leave them to an expert.
If you want to take an early break to learn more about Stamp Duty before we get started, you can check out our blog ‘Do first-time buyers have to pay Stamp Duty?’
In this blog, we’ll break down what they’re going to take care of and how much a solicitor is likely to cost you when buying a house.
How much are solicitor’s fees when buying a house
You don’t technically need to hire a solicitor or a conveyancer (people who specialise in the legal process of buying and selling houses) when you buy a house. It is a pretty good idea though. It’s the best way to make sure your buying process is all happening legally, any little fees are paid, and the right checks are made.
Here are most of the fees a solicitor or conveyancer could charge you for during the buying process:
General legal fees
Your solicitor is going to take care of all the legal work involved in buying a home. This includes conveyancing (the legal process of switching over ownership of a home), checking paperwork is in order and checking whether there are any environmental issues or outstanding planning permission that might cause you a problem. You don’t want to find out you’re buying a house that’s been in a dispute with the neighbours for the last 10 years over who’s responsible for a fence.
The average conveyancing costs for freehold and leasehold properties including VAT, are as follows:
If you are buying a leasehold property, solicitor fees tend to be higher because leases can be complex and often need additional time to check. Here are a few of the extra things your solicitor might need to check:
- Deed of Covenant - You need a legally binding agreement between the buyer and the management company or landlord to establish the rules of the ownership and settle any issues, for example, any expected repair work
- Lease length - The solicitor will check the length of the lease and take care of talking to the managing agent or landlord to serve notice that you are taking over a lease
- Service charges - The solicitor will also find out more information about the service charges or any management details
If you’d like to learn more about leasehold properties you can check out our blog ‘When will ground rent be abolished?’
Land Registry fees
The Land Registry basically makes sure properties are registered under the right person’s name. When you buy a house, they charge you to change over the property registration into your name. Your solicitor will take care of this fee, and will usually charge you for the cost at the time of payment.
It might be worth asking your solicitor to make the payment to the Land Registry online, as this can often save you quite a bit of money.
Land Registry fees are outlined below:
Stamp duty is the tax you pay to the Government when you buy a property. Generally you’ll pay Stamp Duty via your solicitor or conveyancer, who will make sure everything is processed properly. You’ll usually have to pay Stamp Duty as a bank transfer to your solicitor at the time of payment, but it’s best to check with your solicitor. How much Stamp Duty you pay will depend on the value of the property and if you’re a first-time buyer. For example, first-time buyers buying a property valued at under £300,000 are exempt from Stamp Duty.
The Government provides a calculator where you can check your predicted Stamp Duty, but here’s a good rule of thumb to go by:
Disbursements are basically small fees that your solicitor will charge you through the buying process for various quick checks that they’ll take care of for you. Most solicitors and conveyancers will charge you for disbursements as you go
These are some of main disbursements you might expect a solicitor to charge you for:
- Bankruptcy check (£2 - £4 per person on the mortgage) - just a check so your mortgage lender knows you haven’t been declared bankrupt
- Land Registry office copies (£4 - £8) - Proof from the Land Registry that the person selling the property to you actually owns it
- ID verification (£2 - £18 per person taking out the mortgage) - Your solicitor will check your ID and proof of address to make sure you are who you say you are
- Local authority searches (£250 - £450) - Your solicitor will check that your local authority hasn’t got any plans to make changes that could affect the property in the future, like changes to the roads
- Water and drainage search (£35 - £50) - A search to make sure your house is connected to mains water, drainage and surface water drainage in case of flooding
- Environmental search (£30 - £35 plus VAT) - A search to check if there is any contaminated land near the house you want to buy
- Telegraphic transfer fee (£20 - £45 plus VAT) - Your bank will charge you to transfer the money used to buy the property to the seller’s conveyancing solicitor
- Mortgage handling fee (£60 - £80) - A solicitor might charge you for taking care of the legal work involved in setting up your mortgage
- HMLR final search (£3 - £7) - A last search with the Land Registry that is carried out just before completion to make sure there aren’t any hidden issues with the property
Some solicitors might have a long list of additional fees, from charging for a gifted deposit letter, through to a charge to exchange and complete on the same day. These fees are particularly likely to come up in firms that seem to be very cheap at face value. It’s a good idea to have a full discussion with your solicitor before you hire them to make sure they don’t have any extra fees that they don’t advertise.
If you’d like to learn more about some of the other fees involved in buying a house, you can check out our blog ‘Do mortgage brokers charge a fee in the UK?’
How do I pay solicitor’s fees when buying a house?
When do I pay solicitor’s fees when buying a house?
Generally, you’ll probably pay your solicitor when you exchange contracts or on completion. Some solicitors might ask you to cover disbursements as you go, and some might ask for 10% of their conveyancing fee (the legal fees we covered at the top of this blog) as a deposit. It’s a good idea to check what your solicitor’s policy is right at the start, so you don’t have any costs come out of nowhere.
Can you pay solicitor’s fees on a credit card?
Most solicitors will prefer you to pay by cheque or bank transfer, but some might also accept credit cards. Paying your solicitor with a credit card can be risky though. If you don’t have enough money in your account to cover the costs, your credit card company could reject the payment or they could charge you an extra fee for paying a solicitor.
If you’re thinking about paying a large chunk of the fees, specifically Stamp Duty, by credit card, it’s a good idea to think carefully about how it will affect your mortgage. Adding a big piece of debt to your portfolio just before buying a house might not go too well. Mortgage companies can do a last minute credit check and potentially change the terms of your mortgage after seeing that you suddenly have a big credit card bill to pay off.
You should be ok to pay small solicitor’s fees like disbursement fees on a credit card, but it’s worth being wary if you’re planning to pay bigger solicitor’s fees with a credit card.
A few final tips…
Here are a few final things to remember when calculating how much you’re going to be paying your solicitor when you’re buying a house:
- There are all sorts of fees that your solicitor will charge you when buying a house, but they’re pretty much all for super useful things that need to be done
- Paying for small solicitor fees with a credit card shouldn’t cause you any problems, but it might be a good idea to be cautious with larger fees
- Stamp Duty isn’t as scary as it sounds, as long as you’re a first time buyer
Urban Jungle is not a financial advisor and information in this article should not be taken as advice or recommendation.