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Questions and answers: Hampden transfer of equity

  • My father died half a year ago leaving a unencumbered property to me and my step brother equally. Having continues to reside at the premises, there was a condition in her will specifying that the premisescould not be sold for 2 years after her death so he could reside there for a while. He now wishes to remain in the house beyond the specified period. We have considered a transfer of equity. Am I right in saying we'd get a valuation then he'd get a home loan in the conventional way to purchase my share?
  • What if my application doesn't meet Hampden lending criteria for a transfer of equity?
  • My current home loan is with Hampden. Can I transfer equity to someone who is not yet 18 years old?
  • Is it possible to apply to borrow more money from Hampden as part of a Transfer of Equity?
  • My divorce has gone through as is the consent order. Now I need to deal with the transfer of equity on title deeds and the Hampden home loan. I have asked Hampden for the transfer of equity application. What do I do now?
  • How and when do I pay stamp duty due for the transfer of equity in my house in my name alone which is taking place simultaneously with a switching mortgage via Hampden?
  • As things stand I have a joint Hampden mortgage with my step-brother and am investigating the option of him assuming responsibility for the outstanding mortgage and removing myself from it, so as to enable me to buy a property with my partner. The remaining mortgage is about 175k, and the property value is in the region 450k. Is this a transfer of equity? Is land tax involved?

Sample of information requested in a lawyer form relating to Hampden Transfer of Equity

Who will be responsible for the costs of the Transfer of Equity?

Is it the case that one of the registered owners passed away? If so please forward us with a copy of all the relevant documents e.g. the will, death certificate etc..

Has consent been obtained from Hampden to the proposed transfer of equity?

Please provide a copy of your National Insurance Number?

Please give the details of anyone to be added to the title deeds?

Where you are adding someone on to the property how do you wish to hold the property? Please provide your instructions by completing and returning a“Joint Ownership Declaration” Form.

Important warnings to consider in in addition to the above Hampden transfer of equity Advice :

Tax and Legal

There are numerous potential tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Hampden conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

Should the tenure of your property be leasehold, the lease may have a requirement for notices to be served and that you have a license to do so from the landlord. If such conditions are not complied with you may be in violation of your covenants under the lease. This could trigger the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made pursuant to an Order of the Court, then Insolvency Indemnity Insurance is not required. In other situations, 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 Hampden 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 Hampden 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 is dependent on the market value of the property at the time of completion of the transfer of equity conveyancing.
Your property may be repossessed if you do not keep up repayments on your mortgage with Hampden.

Preparing the Transfer of Equity with a Hampden Mortgage

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

If Hampden 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 conveyancer 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 does not constitute 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.


Frequently asked questions relating to Hampden transfer of equity