Transfer of Equity Solicitors

Written by Nicola Ryan

23rd Jan 2023 (Last updated on 16th Mar 2023) 6 minute read

Why Would I Need to Transfer Equity?

There are a variety of reasons why you would proceed with a transfer of equity. Here are some common cases:

Adding another person to the title

This usually occurs when marrying, co-habiting, or entering a civil partnership. Adding someone such as a new spouse or partner to the title gives them financial interest in your home.

Removing someone from the title

When splitting or divorcing from a partner, you may want to remove them from the title deeds and separate your finances.

Going from joint to single ownership

For properties purchased with a friend, you may wish to buy the other person out and acquire full ownership of the property.

Gifting full or part ownership

You may want to gift full or part ownership of the property to a family member or child for inheritance or tax purposes.

Do I Need a Solicitor for Transfer of Equity?

A solicitor is required to add someone to the transfer deed. However, the party who currently holds the deed does not legally require a solicitor. In most cases, both parties do have legal representation. This is because there is a lot of paperwork involved. If the current holder does not have conveyancing experience, it can be extremely overwhelming.

What Does a Solicitor Do in a Transfer of Equity?

There are various tasks your solicitor will conduct when working on your behalf. They will provide you with legal advice and carry out legal aspects of the transaction. This includes the following:

• Drafting the transfer deed
• Looking into any Stamp Duty Land Tax
• Liaising with the existing mortgage lender
• Researching current mortgages on the property

Read our guide on What is a Conveyancer and What Do They Do?

Conveyancing Process for Transfer of Equity

You'll need to hire a conveyancing solicitor to transfer equity to take care of the legal side. Below are the steps in the transfer of equity process:

Transferring equity takes between one to two months on average to complete. However, there is a chance of delays that can prolong the process.

1. Appoint a Solicitor

If someone will be joining your title – for example, adding a new partner – both parties can be represented by the same solicitor. But if someone is leaving the title deeds – such as an ex-partner – each party will need separate legal representation. All parties will need to provide identification to their solicitor.

Find out How to Find a Conveyancer or Solicitor

2. Review the title deeds

Your solicitor will obtain an official copy of the property title or deeds from the Land Registry. They will check any outstanding mortgage or any other charges on the property.

3. Is there a mortgage?

If there is a mortgage on the property, you’ll need the consent of the mortgage lender to go ahead with the transfer. Adding someone to the title will make them equally liable for the mortgage so the lender will want to carry out an affordability assessment.

The same applies if you are removing someone from the property deeds and becoming the sole owner. The mortgage lender will want to be sure you can afford the mortgage on your own. It may want to change the terms of the mortgage at this point.

If your current lender doesn’t agree to the transfer, you’ll need to repay the mortgage before pursuing the transfer. This can be done with cash (if you have sufficient funds) or by remortgaging to another lender in the name of the new owner or owners of the property.

Things are more straightforward if there isn’t a mortgage on the property. This is because you don’t need the lender’s consent to proceed.

4. Is the property leasehold?

If the property is leasehold, your solicitor will also need to obtain a copy of the lease. Your leasehold solicitor will also need to obtain consent from the freeholder for the change of ownership – there may be a fee for this.

5. Complete the TR1 form

A TR1 form is the transfer of equity form used to transfer the legal ownership of a property from one party or parties to another party or parties. Your solicitor will fill in the form, outlining the transferor(s) (current owners), and the transferee(s) (new owners).

Each party will need to sign the TR1 form in the presence of a witness, and your solicitor will file it with the Land Registry.

6. Completion

When the transaction is complete, your solicitor will arrange the transfer of any funds between parties. Outgoing parties will need to complete and sign a Land Registry ID1 form to confirm their identity, in the presence of their solicitor.

Your solicitor will file the relevant documentation with the Land Registry. The average Land Registry fee is£438, depending on the value of the property.

How Much Do Solicitors Charge for Transfer of Equity?

The average transfer of equity cost is £5,298 including VAT. Some solicitors will provide the quote with VAT while others may not. This cost includes various fees including the solicitor’s transfer of equity legal fee of £540.

Therefore, it’s best to double-check with your solicitor beforehand to avoid any surprise costs.

Use our Conveyancing Fees Calculator to find a full estimated cost that includes any transfer of equity fees.

How Long Does a Transfer of Equity Take?

If there’s no mortgage on the property, the transfer of property ownership can be completed in a matter of days or a couple of weeks. You can speed up the process by arranging for both parties to sign the transfer papers at the same time.

It normally takes longer to transfer equity if there’s a mortgage to sort out. For example, if you need to remortgage to buy out a partner the timescale will be dependent on the remortgage process and can be up to six to eight weeks.

Complex cases such as separations or divorces can also slow things down, especially if one party doesn’t consent to the transfer. You’ll need legal advice in this situation.

How Do I Transfer Ownership if There is a Mortgage on the Property?

When you transfer equity, the new owners will be responsible for the mortgage payments. So, the mortgage lender will want to be sure the mortgage is affordable to the new owners and that they meet the lender’s criteria.

The new owners will have to pass the mortgage lender’s eligibility and affordability checks in the same way you need to when you buy a home. The lender will also check you have residency rights in the UK and are within the appropriate age range.

If you plan to solely own the property, you will need to ensure that you earn a high enough income to pass the mortgage lender’s affordability checks. Many people remortgage for a higher amount than their existing mortgage. They then use the surplus cash to pay off the other person.

You may also have to pay off some of the loans with cash savings or remortgage to a different lender, depending on your circumstance.

Finding a Conveyancer

At Compare My Move, we can connect you with up to 6 licensed conveyancers to assist you with your transfer of equity. Fill out the comparison form to compare quotes and save on your conveyancing fees.