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    Money laundering is “the process by which criminal proceeds are sanitised to disguise their illicit origins”. It is estimated that up to £57 billion is laundered through the UK every year. There are large sums of money changing hands in the conveyancing sector making this an area of law heavily attacked by fraudsters as they can legitimise a large amount of money in one go.

    The government have introduced compulsory checks to make it more difficult for criminals to illegally launder money. When instructing a solicitor to act for you in the purchase of a property you’ll need to:

    • Residential Sale (leasehold and freehold)
    • Provide Proof of Identity & Address

    Proof of Identity & Address

    In accordance with Anti-Money Laundering Regulations, you will be required to supply documentation that proves your identity and address. Your solicitor will insist on seeing photographic ID, such as a valid current passport, photocard driving licence, armed forces ID card, or National Identity Card.

    Your solicitor will also need to see two separate pieces of evidence to prove you reside at the address you are living at. This is normally your main residence where you are registered on the electoral roll. A bank statement, PAYE tax coding notice, HMRC letter, utility bill or council tax bill can be used as evidence for proof of address. The reason for needing proof of address for the client’s current address and for limiting what types of correspondence are acceptable is that some fraudsters or money launderers will simply break into an empty property and use any mail addressed to the previous occupier to begin creating a new identity.

    Your solicitor will ask to see originals of the documentation provided, of which copies will be taken and certified as being true copies of the original for the file. If you are unable to provide your solicitor with original copies of the required documentation to prove identity and address, your solicitor can accept copies certified as being true copies of the original by another solicitor, licensed conveyancer, accountant, teacher, post office, Minister of Religion, judge, barrister, police officer or a member of staff at a British embassy. The individual that certifies your documents must be FSA Regulated.

    Proof of Funds

    Proving your source of funds for the purchase of your property is the most important task in the conveyancing process. A solicitor cannot by law proceed with your purchase without knowing the source of your funds. This is to limit the potential for fraud, protecting the solicitor, the legal sector and most importantly, the buyer.

    Proof of funds can be categorised into:

      • Savings

    The best evidence of savings will be bank statements for the last 3 months showing an accumulation of funds in your bank account. If you have more than one bank account containing savings, you will need to provide statements for the last 3 months for those accounts.

      • Pension

    A copy of your pension release document and a copy of your bank statement showing the money being received from the pension company.

      • Sale of Shares

    A copy of the share release schedule and a copy of your bank statement showing the money being received from the shares.

      • Sale of another property

    A copy of the completion statement from your solicitor and a copy of your bank statement showing the money being received from the solicitor following the sale.

      • Inheritance

    A copy of the letter from the executors stating how much you are being paid as a beneficiary and a copy of your bank statement showing the money being received from the solicitor/executor’s bank account.

      • Dividends from a UK Company

    A copy of your dividend certificate, a copy of the company’s accounts and a copy of your bank statement showing the money being received from the Company.

      • Gambling Winnings

    A copy of your receipt proving your winnings and a copy of your bank statement showing the money being received.

      • Compensation Award/Court Settlement

    A copy of your letter confirming your compensation settlement from a solicitor and/or Court and a copy of your bank statement showing the money being received from a third party/Court/solicitor.

      • Gift

    We will require a letter from the person making the gift. The person making the gift will also have to prove the source of the funds in the same manner as you would have to. Read our blog post on Gifted Deposits here.

    If the deposit/full funds are across separate accounts, we will need to see statements for ALL accounts and a final statement showing funds transferred to the main account for the deposit or full proceeds of the cost of the property.

    The Law Practice UK Ltd is accredited by the Law Society’s Conveyancing Quality Scheme so you can be assured that you will receive a high standard of service and client care. For further information and advice, please contact us to speak to a member of our property team.

    Last month, Chancellor Philip Hammond announced plans to correct an anomaly from his previous Budget by cutting Stamp Duty for first-time buyers of shared ownership properties worth up to £500,000. It was also announced by the Chancellor that the relief will be applied retrospectively from his previous Budget (November 2017) to shared ownership properties bought in England and Northern Ireland.

    Shared ownership schemes are a cross between buying and renting; aimed mainly at first-time buyers. Shared ownership schemes are aimed at people who don’t earn enough to buy a home outright, allowing a buyer to purchase between a quarter and three-quarters of a property.

    In the 2017 budget, Chancellor Philip Hammond raised the 0% Stamp Duty threshold to £300,000 from £125,000 in order to help first-time buyers. To qualify for the Stamp Duty exemption given in the 2017 budget to first-time buyers of homes priced up to £300,000, buyers of a shared ownership property had to elect to be taxed on the full market value of the home (up to £500,000) rather than just on the share they were buying. If the full market value of the shared-ownership property was more than £500,000, the buyer would not have been eligible for any Stamp Duty relief at all. Alternatively, buyers could elect to use their first-time buyer exemption on the first share of the property they bought but would have had to pay full rate Stamp Duty on all further shares bought, regardless if the sum of all payments was less than £300,000.

    The update to the 2018 budget for first-time buyers purchasing shared ownership homes is a welcomed move and is even better news that this change has been backdated to November 2017.

    For further information and advice, please contact us to speak to a member of our property team.

    A Will is a legal declaration of your wishes on death and is only valid if it complies with certain requirements set by law. A Will is the only way you can help ensure your wishes are carried out after your death.

    Over 60% of adults in England and Wales are currently living without a Will. Two-thirds of adults in England and Wales pass away each year without having made a valid Will. Some people simply don’t get around to making one, others don’t realise that significant events in life, for example, marriage, can revoke a previously made Will.

    Most people are not familiar with what happens upon death when there is no active Will. If you are a resident of England and Wales and die without having made a legally valid Will or a Will that has partially failed in some way, your estate becomes subject to the Governments Rules of Intestacy. The Rules of Intestacy determine how your estate is to be distributed after the payment of all your debts and liabilities, testamentary expenses and funeral costs.

    This diagram shows how your estate would be distributed in this instance.

    Law of Intestacy Flowchart - The Law PracticePlease note:

    • The issue (any child/children) of a pre-deceased member of a class (relation group) will inherit that share.
    • Step relations have no entitlement unless legally adopted by the deceased.
    • These rules are effective for deaths on or after 1 October 2014
    • Property held as joint tenants passes to the other joint tenant, irrespective of the Rules of Intestacy.
    • The Rules of Intestacy do not recognise ‘unmarried partners’ and therefore no provision is made for them.

    The death of a family member can be a stressful and upsetting time so it’s important that you have a law firm in your corner who can look after both your estate and the interests of your family. Our experts at The Law Practice (UK) Ltd will ensure that both are handled in a professional, caring and cost­ effective manner. We offer a flexible pricing plan, and fixed fee options for Will writing and are happy to provide quotes for the handling and administration of an estate in the event of a death.

    For further information about the importance of writing a Will, visit our dedicated Wills and Probate page

    To speak to one of our experts in our Wills and Probate team, contact us here

    Buying a property is an exciting time however it can be stressful too, especially when you are a first-time buyer. The number of factors involved in purchasing your first home can feel overwhelming. This blog post takes you through the process of buying your first home, including saving your deposit and applying for a mortgage.

    Saving a Deposit

    Generally, you will require a 10% deposit plus a mortgage. The amount you will need to save as a deposit for your first home will depend on several factors, such as:

    • Typical property prices in your area.
    • You and/or your partner’s income. This will determine the amount you can borrow from the bank for your mortgage.
    • Debt and committed outgoings. It is advised that you pay off outstanding debts and reduce committed outgoings. This will not only assist you moving forward with your savings but will also increase the amount available to you on the mortgage.

    First-time buyers can benefit from the government Help to Buy schemes which offers a bonus of up to £3000 which will be claimed by your conveyancing solicitor during the property transaction. The Help to Buy schemes have been running since 2013 and have supported close to 117,000 first-time buyer purchasers. For more information on the Help to Buy schemes and how to apply, read our Help to Buy ISA blog post.

    Saving for a deposit for your first home can be a lengthy and somewhat daunting process which has resulted in an increase of gifted deposits.  A gifted deposit is any amount that somebody (usually the bank of mum or dad) gives a home buyer towards their deposit or gifts them the entire deposit. More and more people are relying on gifted deposits to get a mortgage. Find out more about the gifted deposit and how a gifted deposit is dealt with during your property transaction by reading our gifted deposits blog post.

    You will also need to budget for costs associated with purchasing your property such as legal fees, survey costs, removal costs and the cost for any works required in your new home. First-time buyers will pay no Stamp Duty on the first £300,000 for properties worth up to £500,000 which will save you a considerable amount of money.

    Finding a Mortgage

    The mortgage market is incredibly competitive, and it can be hard to understand what exactly is on offer. Most first-time buyers will benefit from taking independent advice from a mortgage adviser before buying their first home. The mortgage adviser will analyse your finances and assess the level of mortgage repayments you can afford to work out roughly how much you can borrow. This will identify what you can afford which is recommended before you go house-hunting. The broker can get an AIP (agreement in principle) issued from the proposed lender, which will give the agent and seller of a property you would like to offer on piece of mind.

    Whichever mortgage you apply for, your lender will want to know you can continue to make your repayments. The lender will request proof of income and information about your outgoings such as debt, bills and other costs such as travel or childcare.

    Property Search

    You’ll no doubt have plenty of requirements from your prospective new home. A good start would be to look at properties that have sold in the areas you’re most interested in. This will inform you of what property types, sizes and styles you can afford in the different areas you may be looking in.

    If you want to buy a house, it’s likely you’ll buy the freehold, meaning you own the property and land it sits on. If you’re buying a flat, you’ll be buying leasehold, or buying into a share of the freehold. Leasehold ownership of a flat is simply a long tenancy, the right to occupation and use of the flat for a long period. It is possible to extend the lease to the property which is advised as the shorter the lease becomes it depreciates in value. Lenders also have lease length requirements when considering lending money on a property. You can find out more about lease extensions here.

    Naturally, new build homes are an attractive option for first-time buyers because of the government Help to Buy schemes available and the convenience of moving into a brand-new property which requires no renovation – something which can be very costly. For further information about new build homes, read our new build home blog post.

    Conveyancing Process

    The legal process of buying and selling is known as conveyancing. Due to the complexities of conveyancing, it’s important that you choose a solicitor who has considerable experience in this field. Our team of expert conveyancing solicitors have decades of collective experience in this specialist area and are committed to delivering a smooth and stress-free service.

    Use our easy flow chart to track the progress of your property purchase.

    Preparing to Move

    Moving home is statistically one of the most stressful things you can do in life. Making sure you’ve packed everything and like most people having to move it in one day and unpack is hard enough without having to think about all the other things you should be doing. That’s, why we’ve created a handy moving home checklist to make sure moving is that little less stressful.

    If you would like to discuss purchasing as a first-time buyer in further detail, please contact the team via our main switchboard number 0121 778 2371 or alternatively email info@lplawfirm.com.

     

     

     

     

     

     

     

    Help To BuyIn 2013 the Coalition government led by David Cameron and George Osborne created the Help to Buy schemes. The schemes include Help to Buy: Shared Ownership and Help to Buy: Equity Loan which helps hard-working people like you take steps to buy your own home. The Help to Buy scheme makes it possible to buy a home with just a 5% deposit whilst Help to Buy: Shared Ownership deposits are typically much lower than buying traditionally.

    New Build developers in the UK have seen a rise in First-time buyers purchasing homes. Naturally, New Build homes are an attractive option for first-time buyers because of the government Help to Buy schemes available and the convenience of moving into a brand-new property which requires no renovation – something which can be very costly.

    The Help to Buy ISA pays first-time buyers a government bonus. For example, save £200 a month and Help to Buy add £50, up to a maximum of £3,000, boosting your ISA savings of £12,000 to £15,000. The Help to Buy equity loan is interest-free for the first 5 years. After this, borrowers are charged a rate of 1.75%, with this rate slowly increasing year-on-year in line with the Retail Price Index (RPI) plus 1%. Interest payments are paid on top of mortgage repayments.

    It has been 5 years since the government launched its flagship programme and has supported close to 117,000 first-time buyer purchasers.  With 13,500 loans set to mature in 2018 adopters now need to decide how to pay back the government’s loan.

    1 in 7 loans to first-time buyers has been to a purchaser across the South East, with average prices have increased by the equivalent of £67,260. With the exception of London, those in the East of England have seen the average value of their property rise the most. Just 8% of loans have been issued to purchasers in London, however, first-time buyer property prices have increased by over one third since 2013.

    No doubt industry bodies will watch with interest to see whether adopters re-mortgage, sell up or pay back their loans from another source.

    The popular Government-funded Help to Buy Equity Loan is available until 2021. The scheme was extended through a further £8.6 billion in Government funding.

    If you would like to discuss the Help to Buy scheme in further detail, please contact the team via our main switchboard number 0121 778 2371 or alternatively email info@lplawfirm.com.