Buying a home is exciting but it’s important to plan for more than just the property price. Many buyers encounter additional conveyancing fees or unexpected conveyancing costs that can catch them by surprise. Understanding these costs involved early means you can budget effectively and stress during the transaction.
In this quick video, we explain what “additional fees” mean in the context of conveyancing and why they may apply to your property transaction. While many conveyancing costs are covered in your initial quote, some situations, like leasehold properties, gifted deposits, or complex title issues, can lead to extra charges.
Here’s a guide to some of the most common additional fees involved in property transactions and why they matter.
Gifted Deposits and Gift Equity
If a family member or friend is contributing to your deposit, your conveyancer must carry out gifted deposit checks. These confirm that the money is genuine gift, not a loan, and comes from a verified source that your lender can accept.
If part of the property is being passed to you as a gift – often called gifted equity – your conveyancer will complete the necessary gifted equity conveyancing checks. This ensures the arrangement is properly documented, transparent and acceptable to your lender.
Both processes may involve Anti-Money Laundering (AML) and ID verification fees. These are legal requirements designed to prevent financial crime and confirm the source of funds is genuine and traceable.
Help to Buy ISA
First-time buyers using a Help to Buy ISA benefit from a government bonus, but processing this will incur an administration fee to verify eligibility and claim the payment. Your conveyancing will check all documentation, submit the claim on your behalf, and ensure the bonus is correctly applied to the purchase.
Transfer of Equity
Adding or removing names from a property title is known as a transfer of equity. Your conveyancer handles this process, which involves a transfer of equity cost to cover the drafting and registering of documents with HM Land Registry.
Right to Buy Scheme
Purchasing a home under the Right to Buy scheme comes with specific paperwork and legal steps, which are separate to standard conveyancing fees. Your conveyancer will confirm eligibility, liaise with the local authority, and handle the lease transfer, ensuring the sale complies with all statutory requirements.
Probate Sales
If the property is part of a deceased person’s estate, the sale is called a probate transaction. This requires legal work to transfer ownership, including checking the will or grant of probate, liaising with executors, and registering the property with HM Land Registry. Buyers should budget for probate property purchase fees to cover these additional steps.
Leasehold Properties
Buying a leasehold property often involves extra charges beyond the usual legal fee, and often required by the lease or freeholder when ownership changes.
Examples include:
- Management pack fees – which gives you critical info about service charges, communal maintenance and building management.
- A notice of transfer fee – to register you as the new owner with the landlord or managing agent.
- Notice of charge fee, applicable if you have a mortgage, so the lender’s interest is correctly recorded.
- Deed of covenant fee – to formally agree to the terms of the lease, such as maintaining communal areas or following building rules.
- Certificate of compliance fee – to confirm you are meeting the lease’s legal and management requirements
These are disbursements that are passed through your conveyancer, but set by the landlord or management company. Disbursements are third party expenses or fixed costs incurred by the conveyancer undertaking the conveyancing process on your behalf, which are then charged on to you. Your conveyancer will generally ask for these upfront.
Mortgage Fees
Your lender may charge a loan arrangement fee, a mortgage valuation fee, or fees for processing paperwork. These costs are set by the lender, not your conveyancer, but it’s important to factor them into your budget when planning your purchase.
AML and ID Verification Checks
When buying a property, your conveyancer must verify your identity and the source of your funds to comply with Anti-Money Laundering (AML) regulations.
Some situations may require additional checks, which will involve extra AML and ID verification fees. These include:
- Unusual funding – if your deposit or purchase funds come from non-standard sources, your conveyancer will need to carry out extra source of funds checks.
- Overseas bank accounts – funds originating abroad require additional documentation to ensure compliance with UK regulations
- Politically Exposed Persons (PEPs) – buyers holding public office or with significant public influence may be subject to enhanced due diligence to reduce the risk of corruption or misuse of funds
- Source of wealth documentation – your conveyancer may request bank statements, inheritance documents, or other evidence showing where your funds originate to confirm the funds are genuine.
Specialist Indemnity Policies
Certain properties or unusual legal circumstances may require specialist indemnity insurance to protect against risks that standard conveyancing doesn’t cover.
Common examples include:
- Chancel repair liability – historic obligations to contribute to local church repairs
- Restrictive covenants – legal restrictions on how a property can be used, which could affect future plans
- Missing building regulations approval – work carried out without proper certification can present legal or financial risk
- Absence of rights of way – issues where access to or across a property is unclear or disputed
Specialist indemnity policies provide reassurance that these risks are mitigated, so buyers can proceed with confidence.
Understanding Unexpected Conveyancing Costs
Understanding the potential additional conveyancing fees in advance helps buyers to budget accurately, reduce the risk of unexpected delays, and make informed decisions with confidence. It also clarifies what falls within the conveyancer’s control, setting expectations early and reducing stress throughout the process.
Asking your conveyancer for a full breakdown of all costs upfront ensures your finances are planned and there are no surprises along the way.
Property transactions often involve more than the basic legal fee. By being aware of the hidden costs when buying a house, buyers can ensure their budget reflects the true cost of moving and approach the process with clarity and certainty.
Get an instant online conveyancing quote today and speak to our specialist conveyancing team for clear guidance on fees and disbursements.
