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Five Things To Do Before Selling A Flat

Thinking about selling your leasehold property? Here are five tips to kickstart your sale process.

1. Find Your Solicitor

The importance of finding your perfect match cannot be overestimated. The human factor is at the core of a seamless and transparent process. Good practice is to follow recommendations from friends and family (or your agent), review firm’s/lawyer’s website/profile, and of course compare quotes and establish the law firm’s usual response and transaction times. I would always recommend speaking with your solicitor prior to instructing them: a video call is a good starting point especially if you are based overseas.

2. Complete Your Client Onboarding

• If you are already an existing client with your chosen firm, this point may be ticked off already. If not, then make sure you complete your client onboarding in timely manner: provide your ID and proof of address (could be a utility bill or bank statement dated not less than three months from the point of submission).
• Have a look through your paperwork and data files: it is beneficial to provide various property documents which are in your possession to your solicitor at this stage too. These documents could be electrical installations certificates, Gas Safe certificates, NHBC, any planning or building documentation. This means that your solicitor will be able to provide these to the buyer’s solicitor with the initial contract pack, as opposed to raising with you at a later stage.
• If you have a mortgage, do provide your latest mortgage statement to your solicitor too, so that they liaise with your lender to obtain the up-to-date redemption figure (you will usually be redeeming your loan on completion).

3. Complete Your Leaseholder Deed of Certificate and Serve On The Landlord

If your property is a flat in a high-rise block, the recent legislation called the Building Safety Act 2022 (BSA 2022) will require you to serve a leaseholder deed of certificate (your solicitor will advise you, if required and will assist in preparing the document). The leaseholder deed of certificate is served on your landlord, and the landlord will in turn have four weeks to prepare their landlord’s certificate. The leaseholder deed of certificate will confirm whether your lease qualifies for protections under BSA 2022 (with respect to fire safety remediation works). It is therefore good practice to complete and serve the deed even before you have a buyer.

4. Complete Your Protocol Forms

Your solicitor will provide you with Law Society forms to complete and provide the relevant documentation referred to in the forms. These forms consist of standard questions about your property and must be completed by the seller. If you have questions on the forms, it is advisable to raise these at early stages of the sale process.

5. Last, But Not Least — Review and Confirm Your Timetable/Preferences With Your Solicitor and Estate Agent

Will you require a certain period between exchange and completion? Inform your lawyer at the start of the process. Would you prefer to exchange and complete on the same day? Your lawyer can propose this to the other side. Or are you planning an overseas trip, and your Internet connection may be on and off — do let your lawyer know beforehand, and we can make sure you sign sale paperwork before the trip, or agree digital signing with your buyer, not to delay the process. As always, communication is key, and this works both ways.

Sales and purchases are a stressful process but good preparation and working with a good team can ease the worry.

Nargiz Abdullayeva is a Senior Associate in our Residential Property Team. Nargiz has over 8 years of experience in high-value real estate transactions. To discuss any of the points raised in this article, please contact  Nargiz Abdullayeva or fill out the form below.

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Pay 5% Deposit With The Own New Rate Reducer Scheme

Launched in February 2024, the Own New Rate Reducer scheme is designed to make purchasing a new build home more affordable. Through this scheme, buyers can secure a lower mortgage rate compared to traditional options on the open market.

How It Works

When you choose a new build property, the developer agrees to contribute either 3% or 5% of the purchase price as an incentive. This contribution, similar to other perks like discounted upgrades or stamp duty coverage, is directed to your mortgage lender via Own New.

As a result, your interest payments are reduced by the equivalent value for the first 2 to 5 years, depending on your mortgage term, resulting in lower monthly mortgage payments. The scheme is even available to those with a high deposit, of up to 40% which could produce an interest rate as low as 0.99% for an initial period.

Developer-Friendly Incentives

House builders have traditionally offered incentives or discounts to buyers to secure a sale. Own New has joined up with over 60 leading homebuilders, including Barratt Developments, Berkeley Group, and Persimmon Homes, to provide this alternative incentive option.

Available Lenders

The Own New Rate Reducer scheme launched with Halifax and Virgin Money, with other lenders expected to join soon.

Downsides?

A scheme that sounds almost too good to be true and helps thousands of young professionals and other first-time buyers to get onto the property ladder. We are expecting to see a lot more use of the scheme.

Buyers should consider some downsides:

• The scheme only applies to purchasing a new-build property from a developer approved by the scheme.
• If your equity in the property is low, difficulties could be encountered when the buyer comes to remortgage the property, especially if prices have not risen over the period.
• Buyers will have to budget for a potential jump in interest payments when the initial period ends.
• Often buyers of new builds are paying a premium price for having a brand new home, as such older properties may still remain more affordable.
• Only a limited number of lenders are currently partaking.

Eligibility

This scheme is open to anyone purchasing a new build property through a homebuilder approved by the scheme and not just first time buyers.

Get In Touch

Quastels’ real estate team brings extensive experience in handling new build purchases. We have collaborated with many of the home builders and mortgage brokers involved in the Own New Scheme.

Our team is qualified to guide you through the process of purchasing a new build property.

For financial information and eligibility, you must of course, contact your mortgage broker.

To discuss any of the points raised in this article, please contact  Gabrielle Barnaby or fill out the form below.

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Property Guide for Hong Kong Residents Relocating to the UK

For Hong Kongers looking to purchase residential properties in the UK, understanding the residential conveyancing process is essential. This article will provide an overview of residential conveyancing, offering insights into the legal procedures and considerations involved.

The UK legal system is recognised and trusted with a long established and transparent system of title records stored at the Land Registry. The Land Registry in England and Wales operates differently from Hong Kong as all Official Copies that prove ownership of properties, are stored electronically, and can be retrieved easily by solicitors acting in a property transaction. This differs from the system in Hong Kong, where the original title deeds are often held and passed to the new buyer upon completion.

The below is a simple explanation of the residential conveyancing process in UK:

1. Make an Offer

When you find a property you like, you make an offer to the seller/developer. You specify the price you’re willing to pay and any conditions you have. It is important to set out crucial terms at the outset. For example, do you have a particular timeframe you require for exchange and completion.

2. Acceptance of Offer

If the seller agrees to your offer, a memorandum of sale (for second-hand properties) or a reservation form (for new builds) will be issued detailing the terms and conditions for the purchase. It is important to check the details on the memorandum of sale/reservation form are correct. For example, is your full legal name used? Is the address provided your current residential address?

3. Appoint a Solicitor

You instruct a solicitor to handle the paperwork and legal aspects of the property purchase. In UK, the burden is on the buyer’s solicitor to establish the property has a good title. Quastels LLP is experienced acting for purchasers on developments across London and second-hand transactions. We can communicate in Cantonese to assist purchasers from Hong Kong understand the paperwork in their mother tongue language. We will assist you in a seamless transaction and provide a detailed legal report explaining important issues related to the purchase prior to exchange of contracts. Usually, a 10% exchange deposit is required upon exchange of contracts.

4. Surveys and Inspections

Unless you are buying a new build direct from a developer, no guarantee will be given as to the condition of the property. You should appoint a surveyor to prepare a report for you on its condition. In the UK, solicitors do not inspect the property or make any physical checks. This is the job of a surveyor.

5. Mortgage Arrangements

If you’re getting a mortgage, arrange this with a mortgage broker or a lender directly. For second hand transactions, you must consider the finance options prior to the offering stage. For off plan purchases, if you require a mortgage, we recommend you start the application at least 6 months prior to the estimated completion date, but of course you should not commit to an exchange of contracts unless you are certain you will have funds available at completion.

6. Exchange of Contracts

If you are satisfied with the legal report that you have received, the results of your survey , and that you will have funds available to complete the purchase, then you can ‘exchange contracts’. This is the point when you sign the contract and pay a 10% deposit, and fix the completion date. Once you have exchanged contracts both you and the Seller are ‘locked in’. Up to this point either you or the seller can withdraw from the transaction without penalty.

7. Completion

On the agreed-upon completion date, you pay the remaining balance of the purchase price. Any mortgage funds will be sent direct to your solicitor to use. The property’s legal ownership is transferred to you, and you receive the keys. Quastels LLP will deal with paying the SDLT and registering the property at Land Registry. For off plan properties, registration can take up to 12 months. The application to register the title at the Land Registry is protected until the Official Copies are received.

Below are answers to some common questions that purchasers from Hong Kong often ask during the conveyancing transaction:

Why do solicitors check source of funds in such detail for purchasing a residential property in UK?

The requirement for a source of funds and anti-money laundering (AML) checks in the UK for residential property purchases is primarily aimed at preventing illegal financial activities, such as money laundering and fraud. These checks are part of a broader effort to maintain the integrity of the financial system and property market. UK law firms are required to review the source of funds and origin of funds for the purchase of the property in UK to comply with AML regulations.

Quastels LLP provides a thorough Source of Funds Questionnaire to assist purchasers in providing the correct information. The following can be provided in readiness prior to starting the conveyancing process:

• Bank statements for the last three months
• Payslips/Employment contract/Business card
• Copy of your passport
• Copy of your proof of address within last three months (utility bill or bank statement)
• An explanation for the source of funds. How were the funds accumulated? For how long? Did you receive any gift of funds from a third party?
• Evidence for your source of funds. For example, have you sold/refinanced another property to raise funds for the purchase? Do you have stocks and shares portfolio? Do you receive bonus/commission from your workplace? Do you have rental income?

What Do I Need To Look Out For If I Am Purchasing A Property Through a Company?

There may be adverse tax consequences from holding the property through a company. At Quastels our tax department can guide you. In addition The Economic Crime (Transparency and Enforcement) Act 2022 creates an obligation on overseas entities to ensure information is provided as to the ownership of overseas companies holding property and that it be renewed on an annual basis.

Is It True That I Don’t Need To Pay Ground Rent On New Build Flats Anymore?

The Leasehold Reform (Ground Rent Act) 2022 prohibits ground rent being charged on new leases. Therefore, if you purchase a new property where a new lease is granted, no ground rent will be payable under the lease.

There are exceptions to the Act, including:

• Existing leases
• Leases granted pursuant to contracts exchanged before 30 June 2022
• Business leases

If you are interested in purchasing a residential property in the UK, please contact us and fill out the form below.

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