Key takeaways
Equity is the portion of your property you own outright - calculated as the property's value minus outstanding mortgage
A transfer of equity means legally changing the names on a property's title deeds, commonly needed for marriages, divorces, or gifting
You'll need mortgage lender consent if there's an existing mortgage on the property
The process typically takes 4-8 weeks and requires a conveyancer to handle legal aspects
Costs include conveyancing fees, Land Registry fees, and potentially Stamp Duty depending on circumstances
Transferring the equity in your property can seem complicated, but understanding how it works can relieve the stress. If you’re wondering how long a transfer of equity takes or asking, what exactly is a transfer of equity, you’re in the right place.
We’ve put together a guide covering all the key questions about transferring property equity. Whether you want to understand the ins and outs or learn a step-by-step, we break it down in simple, straightforward terms.
Understanding home equity can feel confusing at first, but we’re here to walk you through it in simple terms. When we talk about the equity in your home, we essentially mean how much of it you truly own outright. You can get to that number by taking the current total value of your property and subtracting what you still owe on your mortgage.
Let’s take an example to make things clear, say your home is valued at £200,000 in today’s market. But your outstanding mortgage sits at £150,000, this would mean that you have £50,000 worth of equity.
A transfer of equity refers to the legal process of changing the names on a property’s title deeds.
Life can throw anything at you, we understand that – marriages, divorces, new partners, inheritance changes, it’s sometimes hard to predict. But your record of home ownership needs to reflect this.
While each situation has its own nuances, the process fundamentally includes filing the right paperwork to record the ownership change, working with your mortgage lender to amend the loan if needed, handling any required stamp duty tax payments, and formally registering the updated property records. We'll explore the step-by-step transfer of equity process more later on so everything is crystal clear.
Sharing ownership of your assets can get complicated when circumstances shift. There’s no shortage of reasons you may need to legally transfer equity in your home. Here’s a rundown of some of the most common reasons for transferring equity:
Adding a partner
Adding a partner is one of the more exciting reasons why you need a transfer of equity, in this situation you are adding a person to the Title Deeds.
Separation or divorce
In case of a split, you may need to fully transfer equity to whichever partner will remain in the home.
Buying out owners
Over time you might find yourself needing to buy out the equity shares of a former co-owner, like an ex-spouse or partner.
Gifting equity
How generous – gifting part of your home’s equity to loved ones! Parents often choose to add children to property deeds.
Transferring equity can feel like navigating a legal maze, hiring a conveyancer will help guide you through with expertise.
With many technical considerations, including mortgage and tax implications, we understand that feeling of being overwhelmed. Your conveyancer will work closely with you the complete the legal and administrative work for your transfer of equity.
Your conveyancer will handle:
Navigating legal challenges: With conveyancers specialising in property law, they have the expert knowledge to steer clients through transfers of equity.
Preparing documents: The paperwork involved processing transfers of equity adheres to rigid requirements. Conveyancers ensure every document, from transfers, deeds registration and more, is fully accurate and compliant.
Update Land Registry records: Updating the Land Registry with the updated property ownership details is crucial. Your conveyancer will handle this for you.
Explaining tax implications: Depending on the specifics of the transfer, Stamp Duty (SDLT) may apply. At Eden, we get specialist tax advice on each case.
Liaising with lenders: For mortgaged properties, conveyancers communicate with lenders to secure necessary approvals and address financial impacts.
Guiding financial settlements: Where buyouts or agreements have a role, conveyancers assist in formally documenting the financial terms involved fairly and legally.
Instructing a conveyancer to assist you in your transfer of equity ensures that you are legally protected and ensures that the legal transfer is completed correctly.
Transferring equity in your home can seem incredibly daunting when you first start looking into it.
It's legal process with a lot of moving parts, paperwork, approvals needed, and fees to consider.
We completely understand why you might feel overwhelmed! But take a deep breath, because when the process is broken down step-by-step, it becomes much more digestible and manageable.
Here is a thorough walkthrough of what the full transfer of equity process entails:
Step 1 – Instruct a conveyancer
Start by consulting a conveyancer who will assess your needs, explain legal implications, and put a plan into action. Your conveyancer will be your map throughout the whole transfer of equity process.
Step 2 – Confirm ownership details
Your conveyancer will conduct a Land Registry search to ensure all current ownership information is correct before proceeding.
Step 3 – Prepare transfer documents
Next comes the formal paperwork. Once your conveyancer understands your case, it’s time to prepare the necessary documentation. This will include the Transfer Deed, outlining the details of the equity transfer and all the parties involved, ready to be signed.
Step 4 – Mortgage lender consent
For mortgaged homes, you’ll need consent from your lender, who may need to amend your mortgage terms and agreement. Your conveyancer will handle contacting them.
Step 5 – Signatures and consent
Your conveyancer will work diligently to collect official signatures from everyone included in the property transfer.
Step 6 – Submission to Land Registry
Once the transfer deed is signed, your conveyancer will submit it for you to formally register the change in ownership.
Step 7 – Pay SDLT (if applicable)
If stamp duty applies, don’t worry – your conveyancer will ensure payments are properly made to HMRC on your behalf.
Step 8 – Legal completion
When all the above is fulfilled, you’ve completed, congratulations! It may seem like a marathon at first but taking it step-by-step with the right guidance makes all the difference. Make sure you instruct a conveyancer you trust.
Understanding the transfer of equity timeline is crucial for anyone navigating this property transaction. While every transfer of equity is unique, a realistic timescale is typically 4-8 weeks when everything proceeds smoothly. However, the transfer of equity timeline can vary significantly depending on several key factors.
The transfer of equity timescales is influenced by:
Case Complexity: Some transfers are straightforward, while others involve intricate legal or financial considerations. More complex cases naturally require additional time for thorough examination and processing.
Mortgage Involvement: Existing mortgages can significantly impact the transfer timeline. Obtaining lender approvals, reworking loan details, and addressing mortgage-specific requirements can extend the transfer of equity process.
Parties' Responsiveness: The speed of signatures, approvals, and information sharing from all involved parties directly affects how long a transfer of equity takes. Delays from any party can extend the overall timeline.
Legal Checks: Comprehensive property searches and title investigations are essential. These detailed checks, while crucial, can influence the overall duration of your transfer.
While it can be frustrating not having a definitive timeline, your conveyancer should provide realistic expectations after assessing your specific situation. Remember, although the process might seem lengthy, thorough legal processing ensures a smooth and secure transfer of equity.
When transferring equity in a property with an existing mortgage, you'll need the lender's consent to either remortgage or maintain the current mortgage. Removing someone from the title doesn't automatically release them from the mortgage agreement.
If you're pursuing a transfer of equity without remortgaging, the lender must be satisfied that the remaining person can manage the payments independently. For those considering an equity transfer mortgage and needing to resolve the mortgage, options include:
Each option has implications for your financial situation and property ownership. Consult with your conveyancer and mortgage broker to determine the best approach for your circumstances.
Understanding transfer of equity costs is crucial - unexpected expenses can feel like the absolute last thing you need on top of an already daunting process. Trying to work out exactly how much it costs to transfer equity in a property can be tough because it depends on your circumstances.
There are often many moving parts and intricacies involved from case to case. While we can't give you an exact price tag upfront for how much your transfer of equity will cost, we can help make sense of the likely costs in play.
Here's a breakdown of some of the common transfer of equity costs you can expect as part of transferring equity:
1. Conveyancing fees
You’ll pay your conveyancer between £500 - £1,000 in legal fees for the work they complete whilst acting on your behalf through the transfer of equity process.
2. Transaction costs
From document checks to bank transfers, your conveyancer covers admin fees that they will pay on your behalf (£20 - £150).
3. Land Registry
When transferring equity, you need to register the changes with the Land Registry. This will typically cost between £20 and £455.
4. Freehold consent (if applicable)
If you are transferring equity of a leasehold, you’ll need to get consent from the freeholder of the property. This can cost up to £250.
5. Stamp Duty
Stamp duty is often the largest cost when transferring equity. Stamp duty is owed based on the nature of the transfer of equity.
If you are adding a partner or spouse to your title deeds, you will only have to pay SDLT if the chargeable consideration exceeds the SDLT threshold (250,000). Learn more about when you’ll have to pay stamp duty here.
If the transfer of equity is a gift, or half the property is split between two people, SDLT is not payable. If a couple is separating or divorcing by a court order, there will also be no SDLT to pay.
Check out our full guide to Stamp Duty in the UK here.
6. Remortgaging
If you are remortgaging at the same time as transferring equity, you’ll incur additional costs. Again, depending on your situation will depend on the costs you incur, but we break it all down in our guide to remortgaging.
Transfer of equity timelines can vary significantly, although we can’t provide you with an exact timeline, here’s a rough guide for what to expect:
Remember that this is just a rough guide, and your process could be more complex than this and have more steps.
Here’s a quick breakdown of the costs you may encounter when transferring equity:
We understand you may be wondering whether you can handle your transfer of equity without legal representation, especially if there’s no mortgage involved. While it’s technically possible, we advise against it. Property transfers can be complex, with potential tax implications and legal intricacies. Engaging a conveyancer or solicitor ensures your interests are protected and the transfer is executed correctly.
Their expertise navigates potential pitfalls, providing peace of mind throughout the process/ Though it might seem like an added step, professional guidance often saves time and prevents costly mistakes in the long run.
At Eden, we understand that buying or selling a home can be overwhelming. We’re here to make conveyancing simple.
We will be in touch with you weekly, providing updates and being there when you need us. You can contact your conveyancer whenever you like, to ask whatever you like.
