What is meant by transfer of equity?

A transfer of equity is the legal process of the current owners of a property either buying the share of a joint owner to remove their name from the title; or it is the distribution of a share to a new owner to be registered on the title. An equity transfer takes weeks not months to complete.

Do I need transfer of equity solicitors near me?

The process can be completed by any solicitor whether near to you or remotely. Documents can be signed from your own home and sent in the post to wherever your solicitor is based. It is more important that you have a transfer of equity solicitor with the requisite specialism to understand the risks of the process.

Do you need a solicitor for transfer of equity?

Whilst you can complete the process yourself, you will need a transfer of equity solicitor, or transfer of title solicitor, for some parts of the transaction such as the ID1 Form (you cannot update the Land Registry title ownership without a solicitor to ID you). We can handle the entire transfer of equity process for you. Get in touch

What does the solicitor do for transfer of equity?

This depends on whether you are adding someone onto the legal title or if you are removing someone. If the latter then if there is consideration then it is likely the party being removed should seek a separate transfer of equity solicitor. See examples: Party A is adding on Party B - a solicitor acting for both parties can add a party to the legal title Party A may wish to obtain independent legal advice on the equity they are transferring to ensure they are fully aware of the value of the equity and that they are being suitably remunerated for it. Most transfers are for under the market value which could mean that Party A is out of pocket if the relationship breaks down and the parties sell. Party A is removing Party B - one solicitor can act for party A (remaining on the legal title) and can remove Party B's name and update the mortgage lender. Much like the above, party B will be advised to obtain independent legal advice on the equity they are transferring to ensure they are fully aware of the value of the equity and that they are being suitably remunerated for it. Party A would want to make sure that Party B doesn't have a future claim to the property. The parties would be best placed drawing up a Settlement Agreement to confirm what was agreed.

How long does a transfer of equity take?

Transfer of equity conveyancing timeline: Mortgage application to mortgage offer (if required) - up to 5 weeks Person/s moving out completes their ID1 form/s and has these checked - up to 1 week Mortgage redemption statement delivered to solicitor and signed mortgage document - 1 week Final completion - 1 week Where there is no mortgage and no money changing hands the timescales can be as quick as 2 to 3 weeks.

Do I have to pay stamp duty on a transfer of equity?

Stamp duty is declarable on any transfer where there is consideration. Read more >> Transfer of equity stamp duty.

How is the Land Registry updated after a transfer of equity?

The TR1 which is completed by the current owners and the new owners is sent off to the Land Registry post completion. The Land Registry can take a number of weeks to update the new names on the legal title, however the completion date for the transfer is the date registered.

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Transferring the equity in your property is the process where existing legal owner/s are removing or adding a name to the legal title. Where a party is leaving it is known as Buying someone out of a jointly owned property.

The timescale to complete transferring equity is anywhere from 3 to 6 weeks, however, it can be slowed if:

you struggle to get lender consent to the change of legal ownership
there is a dispute over the amount the departing party is due
(if leasehold) you haven't paid your service charges/ground rent or the freehold managing agent is slow or absent.

After you complete it can take a number of months for the Land Registry to update the legal title. You need to file and pay for any tax due on the transfer - Do you pay tax on a transfer of equity?.

Summary of the Transfer of Equity Process

Start your process

Party Being Removed	Party Being Added
Party Being Removed 1 Agree what % share the new owner has in the property and if paying any money for the equity 2 Obtain consent from existing mortgage lender or get a new mortgage offer 3 (if leasehold) Confirm freeholder notice and settle any ground rent or service charges due 4 Completion takes place and (if applicable) money is transferred to buy the equity 5 Post completion work including filing SDLT form and registration at the Land Registry to remove the name of the leaving party.	Party Being Added 1 Agree what you are paying to buy the leaving party's equity 2 Obtain consent from existing mortgage lender or get a new mortgage offer 3 (if party being removed) Get an ID1 Form verified 4 (if leasehold) Confirm freeholder notice and settle any ground rent or service charges due 5 Completion takes place and (if applicable) money is transferred to buy the equity 6 Post completion work including filing SDLT form and registration at the Land Registry to add the name of the new party.

Party Being Removed

Party Being Added

Party Being Removed

1 Agree what % share the new owner has in the property and if paying any money for the equity
2 Obtain consent from existing mortgage lender or get a new mortgage offer
3 (if leasehold) Confirm freeholder notice and settle any ground rent or service charges due
4 Completion takes place and (if applicable) money is transferred to buy the equity
5 Post completion work including filing SDLT form and registration at the Land Registry to remove the name of the leaving party.

Party Being Added

1 Agree what you are paying to buy the leaving party's equity
2 Obtain consent from existing mortgage lender or get a new mortgage offer
3 (if party being removed) Get an ID1 Form verified
4 (if leasehold) Confirm freeholder notice and settle any ground rent or service charges due
5 Completion takes place and (if applicable) money is transferred to buy the equity
6 Post completion work including filing SDLT form and registration at the Land Registry to add the name of the new party.

Looking to transfer equity in a Help to Buy home? Whether adding or removing an owner, it can be more complex than a standard transfer.

Transfer of Equity Costs

Solicitors fees including ID checks, office copies
Land Registration fees
(if party being removed) ID1 Form verification fee
(if mortgage) Change of mortgage fee
(if leasehold) Notice fee to freeholder

On average a quote will cost in the region of £450 to £1,000 depending on which equity solicitors you choose to instruct, if the property is leasehold and if there is a mortgage.

If you have an existing mortgage registered over the legal title then you have 2 options available to you:

Obtain mortgage lender consent
Get a new mortgage

If you can't get mortgage lender consent and the party/ies are unable to afford the mortgage in just the new owner's names then you cannot complete the transfer.

Transfer of equity process

1 Instruct a Solicitor

The parties remaining on the legal title instruct a solicitor to act on their behalf. Read more - What are the Transfer of Equity Costs?

For the party leaving the property, they will need to complete an ID1 form and have this witnessed. The witnesses can only be a solicitor, licensed conveyancer, notary public, barrister, CILEx Conveyancing Practitioner, Chartered Legal Executive Conveyancing Practitioner, Chartered Legal Executive, lawyer outside the UK, officer of the UK armed forces operating overseas or an employee at a Land Registry Office.

If you are paying consideration to the leaving owner, then your solicitor will need to confirm the source of the funds you are using (read this article on How to prove source of funds).

2 Mortgage consent or mortgage offer

If you have an existing mortgage then you cannot remove the name of a legal owner from the property and mortgage without the consent of the mortgage lender.

If you are remortgaging then your mortgage lender issues their mortgage offer to your solicitor in the names of the new owners. Different mortgage lenders will have different requirements for their solicitor to adhere to. Whereas some won't ask the solicitor to do anything more than their obligations under the CML, some mortgage lenders request additional information to be provided to them before they will agree for the mortgage to be issued. For example, Paragon Mortgages require the solicitor to provide copies of planning permission, building regulations and rights of way, however Santander Plc doesn't require this.

3 Completion and payment of Transfer of Equity Costs

The solicitor sends you a financial statement before completion detailing the legal fees and disbursements. This is an example of a costs statement for a transfer with an existing mortgage of £200,000 and £50,000 consideration:

Description	Cost
Mortgage advance from new lender	£250,000
Less:
Existing mortgage	£200,000
Payment for equity to leaving party	£50,000
SDLT payable at current rate	£TBC
Solicitor Fee INC VAT and disbursements (this varies depending on the property value, if the property is leasehold and if there is a remortgage	£599
Land Registry	£45

Balance to complete excluding SDLT	£644***

Stamp Duty Calculator

Once your mortgage advance is received by your solicitor and you and your solicitor are ready to complete, then your solicitor will redeem your existing mortgage, pay the consideration due to the leaving owner, settle their invoice and any disbursements (online ID check, official copy costs and OS1/bankruptcy). The balance, if any, is then repaid to you. The only amounts left will relate to the Land Registry fees and any costs due to the property being a leasehold.

4 Post completion

The process for discharging the old mortgage and registering the new mortgage/owners at the Land Registry can take between 1 to 6 months after completion. The time delay is linked to the Land Registry having a backlog of work. This can be extended further for leasehold properties if the freeholder/managing agent delays in releasing the notice.

Delays can be worsened if your service charge and/or ground rent are in arrears so make sure that you have settled these prior to remortgaging otherwise you may have a stand-off, with your freeholder not releasing your notice until your service charge account is settled (read more about What happens after completion).

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* Mortgage lenders choose which solicitors they will or won't work with. Our panel solicitors are on 99% of mortgage lender panels. Our panel solicitors are currently not on the panel for Kent Reliance (when buying through Shared Ownership) and the Islamic Development Bank. Tell us who your lender is and we will assign you an approved panel solicitor.
** Our panel of solicitors are regulated by the Solicitors Regulation Authority and conveyancing work is accredited with the Law Society's Conveyancing Quality Scheme.
*** Leasehold financial statements would need to include a notice fee payable to the freeholder to confirm the change of ownership and any new mortgage.

Written by: Andrew Boast

Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.

Reviewed by: Caragh Bailey

Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.