13 Jan, 2014/ by Homeward Legal /Buyer, First Time Buyer
Conveyancing will soon become cheaper as the Land Registry passes on reduced transaction costs to customers. From 17 March the fees charged by the Registry on most property transfers will be halved. This will reduce the fee to £95 from £190 for the transfer of an average-priced home worth between £100,000 and £200,000.
The Land Registry is a government agency which is responsible for registering property titles. Every time a home is purchased the buyer's solicitors have to register the change of ownership (and any mortgage) with the Registry. In the past this was done by completing an application form and posting it together with the transfer and mortgage deeds to the Registry. Following the introduction of electronic system solicitors can now complete such applications online with the relevant legal documents being scanned and sent digitally. This has resulted in considerable cost-savings which are now being passed on to purchasers and will significantly reduce the cost of conveyancing.
The reduced fees will only apply when applications are submitted electronically, so as to encourage the use of the new system. The fees charged by the Registry depend upon the amount paid for the property.
At present these fees range from £40 for properties up to £50,000 to £910 for properties over £1m. From 17 March the fees will generally be cut by half.
The cut will be even greater for properties bought for between £80,001 and £100,000 where the new fee will be now be just £40 instead of £120. This should help many people buying under Shared Ownership schemes or Right to Buy, even in London and the South East. Buyers' solicitors collect the Land Registry fees from clients at the time of completion, and the lower fees will therefore apply to all purchases expected to complete on or after 17 March.
Speaking about the fee reduction the Chief Executive of the Land Registry, Ed Lester, said:
"In 2013 we reduced our operating costs by a further four per cent. I am delighted today, to announce that we are in the fortunate position of being able to share the benefits of this reduction by again lowering our fees. Our research shows that many first time buyers … will benefit from the lower fees. This is a great example of the benefits of delivering public services digitally to our professional customers. By incentivising e-lodgement, we want to encourage them to get on board and reap the full range of benefits of lodging by electronic means - lower costs, speed and convenience.”
The new Land Registration Fees also support the Government's Digital by Default strategy by giving a significant financial incentive to customers to submit their applications electronically.
The new fees scales from 17 March will be:
| Purchase price | Old fee | New fee |
|---|---|---|
| £0 to £50,000 | £40 | £20 |
| £50,001 to £80,000 | £70 | £20 |
| £80,001 to £100,000 | £120 | £40 |
| £100,001 to £200,000 | £190 | £95 |
| £200,001 to £500,000 | £270 | £135 |
| £500,001 to £1 million | £540 | £270 |
| Over £1 million | £910 | £455 |