Questions and answers: First Direct transfer of equity

• I am selling my share of a flat in Hendon to my co-owners fiance, they are sticking with First Direct being the the existing lender. We are haggling as to who should pay the fees for the transfer of equity. Is this normally split or is one party obliged to cover the legal bill?
• I am led to believe we would need at least AP1 and TR1. Is this true?
• I already have a home loan with First Direct and am maintaining my current mortgaging but applying to have it in my sole name so my ex won't be on it any longer. How long do First Direct take to deal with the application?
• Do I need legal representation when doing a transfer of equity where the mortgage is to remain with First Direct?
• My financial adviser has recommended their conveyancing solicitor for my Transfer of Equity plus remortgage with First Direct - Is it not simpler easier to just instruct them?
• Will I incur any fees for a Transfer of Equity where the current home loan is with First Direct?
• What should I be budgeting for when it comes to what solicitors charges are for a transfer of equity? I'm in the process of remortgaging - moving over to First Direct - and have been quoted £250 excluding VAT by First Direct's appointed conveyancing solicitor, Is this is a good price or not?

Examples of information requested in a conveyancer form concerning a First Direct Transfer of Equity

Information to consider in conjunction with the above First Direct transfer of equity Questions and Answers :

Tax and Legal

There may be various tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the First Direct conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold titles

If your property is leasehold, the lease may require that you obtain the consent of the freeholder. If such conditions are not complied with you may be in violation of the lease. This could potentially result in the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made as a result of an Order of the Court, then Insolvency Indemnity Insurance is not required. In other cases, where a property is being transferred at less than market value between joint owners, an Insolvency Act Indemnity Insurance policy may be required. This is something that that your conveyancing solicitor will check with First Direct This is because, if the outgoing party is made bankrupt in the future, their Trustee in Bankruptcy could argue that they had transferred the property in order to avoid their creditors and apply to the Court to have the transaction set aside. If this happens, it could affect your lender or a future buyer from you as they would lose the property and the lender may not get back what they have loaned to you. The Insolvency Act Indemnity Insurance policy only protects lenders such as First Direct or future buyers from you. If there is no mortgage and the outgoing owner is made bankrupt, there is a risk to you that you could lose your home if the transfer is set aside. The cost of the Insolvency Act Indemnity Insurance policy varies based on the valuation of the property at the time of completion of the transfer of equity transaction.

Preparing the Transfer of Equity with a First Direct Mortgage

When it comes to preparing the the Land Registry documents your conveyancer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If First Direct is joining in the transfer to release someone from liability, put the release in the ‘additional provisions’ panel if someone is entering into a covenant relating to the charge, place it in the ‘additional provisions’ panel stamp duty land tax is not payable when there is no chargeable consideration for the transfer (Schedule 3, paragraph 1 of the Finance Act 2003). In the case of a transfer subject to a charge (even if the transfer is by way of gift) or if a property has been transferred for no value and there is an associated discharge, HMRC would view this as an assumption of an existing debt by the purchaser (Schedule 4, paragraph 8 of the Finance Act 2003) and stamp duty land tax may be payable if you wish you may state in the ‘additional provisions’ panel that ‘This transfer is made subject to a charge dated… in favour of…’

On form AP1, your conveyancing solicitor should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Content on this webpage is for general information and only applies to England and Wales. It should not be regarded as advice for members of the public who should contact their lawyer,mortgage broker, insurer and accountant for specific advice relating to transfer of equity. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.