Buy to Let Conveyancing

Investing in buy to let property is a popular option for a reason – it offers a relatively low risk way to achieve a reasonable return consistently. That said, like any investment, you need to take care to ensure you can achieve the outcome you are hoping for.

When it comes to buy to let property, this careful approach needs to start with how you buy the property – making sure you get the right deal on the right property and that the purchase goes ahead smoothly with no hidden surprises. When it’s time to sell, there are also a number of issues you must consider, not least of which is your liability for Capital Gains Tax (CGT).

At JCP Solicitors, our property conveyancing solicitors regularly assist new and existing landlords who wish to purchase rental property, as well as those looking to sell rental properties.

Our buy to let conveyancing solicitors can assist with matters including:

  • Liaising between buyers, sellers, estate agents, lenders and other relevant parties
  • Reviewing the contacts of sale & any supplementary sale documents
  • Raising/answering any queries in relation to the sale
  • Carrying out conveyancing checks on the property
  • Investigating the legal title to the property
  • Handling transfer of funds between buyer and seller
  • Advising on Land Transaction Tax (LTT) or Stamp Duty Land Tax (SDLT) and handling its payment where relevant
  • Remortgaging to a buy to let mortgage for those looking to rent out their old home

Buy to Let Mortgages often have Special Conditions attached to them which must be adhered to. At JCP we are able to review Mortgage Instructions and in turn are able to advise you on your liabilities under the terms of the Mortgage.

Our handpicked team of expert conveyancing solicitors will work closely with you to understand your needs and make sure your transaction goes ahead on the right terms for your investment needs.

 

  • Emma Gilroy
      • 01792 529 629
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  • Rhian Jervis
      • 01792 525 422
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  • Emily Diaz
      • Emily Diaz
      • Head of Residential Property - West Wales
      • 01267 248882
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  • Yee Leung
      • Yee Leung
      • Associate Solicitor - Residential Property
      • 01792 529608
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  • Rhiannon Dutt
      • 02920 379579
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  • Jodie Knuckey
      • 01267 248888
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  • Rachel McAdorey
      • 02920 855290
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  • Natalie Slee
      • Natalie Slee
      • New Business Assistant - Residential Property
      • 01792 529691
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  • Carole Cotton
      • 01348 871012
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  • Geraldine Davies
      • 01348 871017
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  • Kirsty Hussien
      • 02920 760950
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  • Sarah Woods
      • 01446 776 123
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  • Claire Edwards
      • 01792 529 609
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  • Mari Gordon
      • Mari Gordon
      • Licensed Conveyancer - Residential Property
      • 01267 248 982
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  • Angela Robinson
      • 02920 760590
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We provide efficient, reliable conveyancing, helping your property transactions to go ahead on time and on budget. Our goal is to make the conveyancing process as simple and stress-free as possible for you, while keeping you and your investment protected at all times.

Speak to our buy to let conveyancing solicitors in South Wales

To speak to our expert buy to let property lawyers in South Wales, please contact your local JCP Solicitors office or use our simple contact form to ask a quick question or arrange a call back.

How buy to let conveyancing works

The buy to let conveyancing process

Pre-contract

Once an offer is made and before the contracts of sale are signed, the following steps will take place:

The sellers’ solicitors will:

  • Prepare the contract of sale
  • Complete the relevant commercial property enquiry forms (CPSE forms)
  • Provide any other information required by the buyer and their solicitors
  • Advise the seller on tax considerations including Capital Gains Tax (CGT)

The buyers’ solicitors will:

  • Investigate the seller’s title to the property to uncover any potential issues
  • Review the contract of sale, raise any enquiries & request any necessary changes
  • Carry out pre-contract searches on the property
  • Reviewing the CPSE information provided by the seller and raise any queries
  • Advise the buyer on any additional issues, such as around financing and tax liability

Exchange of contracts

Once the details of the sale are agreed, the solicitors acting for the buyer and seller will handle exchange of contracts.

The two legal teams will go through their respective client’s copies of the contract of sale line by line, making sure both copies are identical and there are no final issues to resolve.

Both buyer and seller will then sign their respective copies, after which these will be exchanged in person, by recorded post or by fax. At this point, the sale will be legally binding, and the buyer will pay the agreed deposit.

Completion

The contracts of sale will specify a ‘completion date’ when the remaining balance of the purchase price will be paid and the sale will be final.

On the completion date, the buyer’s solicitor will:

  • Transfer the remaining balance of the purchase price to the seller’s solicitor
  • Ensure any Land Transaction Tax (LTT) or Stamp Duty Land Tax (SDLT) due on the property is paid
  • Register the change of ownership with the Land Registry

The seller’s solicitor will:

  • Handle the transfer of the balance of payments and confirm to the seller than this has taken place
  • Ensure any Capital Gains Tax (CGT) due on the sale is paid
  • Handle repayment of any mortgage the seller had on the property
  • Transfer the remaining balance of funds to their client

Things to consider when investing in buy to let property

Before putting your money into a buy to let property, it essential to be clear what costs will be involved and exactly how much you can realistically expect to earn. This will help you to make sure you are investing your money wisely and will have the best chance of seeing the return you need.

Key points to consider include:

Your investment goals – Including how much you are hoping to earn from your property and how long you intend to keep the property for.

Expected rental income – How much you can realistically expect to earn based on the rental value of other similar properties in the area.

The costs of owning a rental property – Such as mortgage repayments, maintenance costs, insurance etc. This will have to be deducted from your rental income before calculating how much profit you will make.

Income tax – Rental income is liable for income tax, which may be taxed at 20%, 40% or 45% depending on your tax band. If you buy the property through a limited company, you will pay corporation tax on your profits instead, which may be lower.

Buy to let mortgage requirements – You will normally need to already own at least one property to be able to get a buy to let mortgage. You will also normally need to achieve a minimum monthly rental income as part of the terms of the mortgage.

Land Transaction Tax (for property in Wales) – The rules on Land Transaction Tax are different for buy to let properties than for owner-occupied property. Buy-to-let properties incur a tax rate of between 3-15% depending on the value of the property.

Stamp Duty Land Tax (for property in England & Northern Ireland) – Landlords pay an additional 3% stamp duty compared to owner-occupiers, meaning stamp duty rates of 3-15% will apply, depending on the value of the property.

Freehold vs leasehold – When buying any property, it is essential to understand whether it is freehold or leasehold and what this means. For buy to let investors, the additional costs of owning a leasehold property (including ground rent and service charges) will need to be factored in when working out your expected income.

Resale value – Whether you are planning to own the property for 5 years or 50, eventually it will need to be sold. Buying a property that is likely to increase in value can make a big difference to the lifetime value of your investment. Buying in an up-and-coming area or where the property value can be boosted significantly by home improvements can, therefore, be a smart move.

Capital Gains Tax (CGT) liability – When you do come to sell the property, you will almost certainly be liable for Capital Gains Tax. This cost should therefore be factored into your plans from the outset. If you bought as a limited company, you will pay corporation tax on your profits instead, which may be lower.

Tax implications of buy to let property – is it worth setting up a limited company for buy to let?

When investing in buy to let property, you can either make the purchase as a private individual or set up a limited company as a vehicle for owning the property.

The key advantages of setting up a company for buy to let investment are:

  • You will pay corporation tax on your profits, rather than income tax, which can be considerably lower
  • Any funds you draw from the company will be taxed at special dividend rates which can also be much lower than income tax rates
  • You can deduct 100% of mortgage interest from your profits for tax purposes (compared to individuals who are no longer eligible for buy to let mortgage interest relief)
  • When you sell the property, any profit will be liable for Corporation Tax rather than capital gains tax

The main disadvantages of buying rental property through a limited company is that mortgage interest rates will typically be higher. You will also need to consider the cost of setting up a limited company.

Both of these costs will need to be weighed against the tax savings you may stand to make with a limited company to see which is the right option for your circumstances.

Buy to let financing

There are different rules for buy to let mortgages compared to mortgages for owner-occupied properties. The key differences are:

  • You will usually need a minimum 25% deposit
  • The fees and interest rates are usually higher
  • Most buy to let mortgages are interest only, so you do not repay the capital until the property is sold
  • The terms of the mortgage will normally require a minimum monthly rental income
  • You will normally already need to own your own home
  • Most buy to let mortgages are not regulated by the Financial Conduct Authority (FCA)

If you wish to rent out your old home, you will normally need to refinance to a buy to let mortgage. This is because the terms of standard owner-occupier mortgages prohibit renting out the property.

Our buy to let conveyancing fees

We can offer fixed price buy to let conveyancing, giving you certainty over the costs involved.

We will provide an upfront conveyancing quote with a clear breakdown of all of the costs involved, including our legal fees and third-party costs.

Should any extra expenditure be required (e.g. if any problems arise that we need to deal with) we will always discuss this with you and secure your agreement before any work is carried out.

To get a quote for your buy to let conveyancing, please get in touch.

Buy to let conveyancing FAQs

Why do I need a solicitor to buy property?

A good conveyancing solicitor will help you in various ways, including:

  • Checking for any potential issues that could delay the sale or add additional cost e.g. issues with the property title
  • Making sure the terms of the contract are clear, fully understood by both parties and that they meet your requirements
  • Ensuring all paperwork is completed correctly and promptly, avoiding unnecessary delays
  • Handling transfer of funds securely, keeping your money safe

What conveyancing checks are needed for buy to let property?

Exactly what conveyancing checks are needed to buy to let property will depend on the property and its location. The most common conveyancing checks are:

Local authority searches – Looking for issues such as planned developments, planning restrictions, new infrastructure projects etc in the local area.

Land Registry searches – To establish that the seller is the legal owner of the property and there are no issues with the property title that could affect the sale. This is a legal requirement for any property sale.

Environmental searches – Looking at whether the property is located on or near potentially contaminated land or water or on an old landfill site.

Water authority searches – To show who is responsible for the property’s water supply and drainage.

Other property searches – Different searches may be needed depending on known issues in the area, such as a Mining Report in areas where mining activity previously took place and Chancel Repair Searches where the property is near a church.

How long does buy to let conveyancing take?

There is no set answer, but around 4-12 weeks is common.

Factors that will affect the timescale include whether there are problems that need to be resolved or where either party is slow to respond to enquiries, send paperwork etc.

We will always do our best to keep the conveyancing process as fast as possible, ensuring any enquiries are dealt with quickly, all paperwork is handled promptly and any issues that do arise are dealt with swiftly and efficiently.

How much does buy to let conveyancing cost?

This will depend entirely on your requirements. Most buy to let conveyancing can be completed on a fixed fee basis and we will be happy to provide a quote for this upfront.

To get a quote for your buy to let conveyancing, please get in touch.

Why use our buy to let property conveyancing solicitors in South Wales?

With decades of experience helping new and existing landlords to buy and sell a wide range of properties, we can provide a safe, reliable and efficient buy to let conveyancing service to match your requirements.

We have local offices covering the whole of South Wales, East Wales and West Wales in Cardiff, Swansea, Caerphilly, Carmarthen, Cowbridge, Fishguard, Haverfordwest, Pontypridd and St Davids. This allows us to provide a convenient local service and expert local knowledge to clients across Wales.

With our strong experience and pragmatic approach, our buy to let property conveyancing solicitors can help guide you through buying or selling rental property on schedule and on budget.

Speak to our buy to let conveyancing solicitors in South Wales

To speak to our expert buy to let property solicitors in South Wales, please contact your local JCP Solicitors office:

To ask a quick question or arrange a call back, use our simple contact form to make an enquiry.