Property Conveyancing Archives

Equity release: Upsizing to the house of your dreams

Posted on 16 July 202429 March 2025 by Sarah O'Sullivan

In this scenario, Lucy and Max are using a lifetime mortgage to supplement the purchase of a property which would otherwise be outside their reach.*

Lucy and Max Ford are a retired married couple aged 65 and 67. It has been their dream to move to a coastal village, and now that their children have moved away, they have no ties to where they currently live.

An equivalent property in the area they want to move to costs around £350,000. Their present home, on which they have no mortgage, is valued at £270,000, so they need to find an extra £80,000 to meet the cost of the new property.

They decide to release equity from their house by using a lifetime mortgage to supplement the purchase. Once they have found the property they want and a buyer for their current home, they simultaneously complete on the new house and release funds from the lifetime mortgage, enabling them to fund the price difference.

Their lifetime mortgage allows them to retain ownership of their home while guaranteeing no negative equity. It also gives them the option of monthly repayments if they want to reduce interest roll-up.

Things to consider

Before applying for equity release, weighing alternative options and looking at the possible effects on your finances is important. These include:

Downsizing and other forms of finance
Compound interest roll-up if chosen
Early repayment charges
Long-term care and state benefits considerations
A lifetime mortgage may impact the inheritance you leave

Get in touch

Speak to our Wealth Specialist, Toni Chalmers-Smith or Senior Associate Solicitor Catherine Banks at Tees today.

*Examples of customer scenarios only. Every case will be different.

This material is intended for information purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice. Some information quoted was obtained from external sources we consider to be reliable.

Tees is a trading name of Tees Financial Limited, authorised and regulated by the Financial Conduct Authority. Its registered number is 211314.

Tees Financial Limited is registered in England and Wales, registered number 4342506.

How an interest-only mortgage is repaid at term through equity release

Posted on 16 July 202429 March 2025 by Sarah O'Sullivan

Sarah’s interest-only mortgage has expired, and she has to repay the capital. In this scenario we see how she’s able to use the equity in her home to manage the repayment.*

Sarah Jones is a 65-year-old retired widow. Her residential interest-only mortgage has reached the end of its term, and she is now required to repay the capital sum of £80,000.

Based on her age and income, she could not qualify for a Retirement Interest Only (ROI) or residential mortgage, and her mortgage company is unwilling to extend the term any further. Also, she does not want to downsize.

By choosing a lifetime mortgage, Sarah is able to release the £80,000 from her home’s equity to pay off her mortgage. Payments are optional, but in the months when she has surplus cash, she may choose to make a payment to help reduce the interest roll-up.

Sarah’s lifetime mortgage allows her to retain home ownership while guaranteeing no negative equity.

Things to consider

Before applying for equity release, weighing alternative options and looking at the possible effects on your finances is important. These include:

Downsizing and other forms of finance
Compound interest roll-up if chosen
Early repayment charges
Long-term care and state benefits considerations
A lifetime mortgage may impact the inheritance you leave

Get in touch

Speak to our Wealth Specialist, Toni Chalmers-Smith or Senior Associate Solicitor Catherine Banks at Tees today.

*Examples of customer scenarios only. Every case will be different.

Tees is a trading name of Tees Financial Limited, authorised and regulated by the Financial Conduct Authority. Its registered number is 211314.

Tees Financial Limited is registered in England and Wales, registered number 4342506.

UK Housing market mid-2024: Recovery amid challenges

Posted on 28 June 202426 March 2025 by Sarah O'Sullivan

Residential property review June 2024 – The UK housing market continues to show modest signs of recovery, according to the latest data from Savills.

Despite some house price growth, a significant upturn is unlikely until mortgage affordability improves.

Buyer activity continues to improve, as the number of sales agreed in May was 10% higher than the 2017-2019 average, according to TwentyCI.

The rental market remains relatively consistent. Data from Zoopla shows that, in April, annual UK rental growth was 6.6% – slightly lower than the 6.7% recorded in the previous month. The region with the strongest annual growth was the North East (9.5%), followed by Scotland (9.3%). Rental growth is accelerating in locations close to large cities, such as North Tyneside and Midlothian – more evidence that the pandemic’s ‘race for space’ appears reversed.

New homes in the capital – demand outstrips supply

Demand for new buildings in the capital is increasing, but supply is limited due to high development costs.

Knight Frank data indicates confidence is picking up among London buyers. In April, the number of offers placed on new homes increased 9% year-on-year, while viewings rose 17%. Similarly, for mid-to-upper markets, the number of prospective buyers interested in purchasing a new build was 15 to 20% higher than the previous year.

Despite this growing demand, building costs in the capital have put off some developers. As a result, new starts fell by 20% over a 12-month period, and about 35,000 new homes are being delivered per year – over 30% lower than the Mayor of London’s target of 52,500.

How will the General Election affect the housing market?

Ahead of the 2024 General Election, new homes are the unanimous focus of the manifestos regarding housing.

If the Conservatives remain in government, Rishi Sunak aims to build 1.6 million new homes over the next five years – slightly more than the Labour Party’s target of 1.5 million and less than the Liberal Democrat’s promise of 380,000 new builds per year. Ed Davey stated that 150,000 will be social housing; Keir Starmer prioritises building new social rented homes.

The Labour, Liberal Democrat and Conservative manifestos pledge to fully abolish Section 21 ‘no fault’ evictions. Davey also pledged to create a national register of licensed landlords and make three-year tenancies the default.

If the Labour Party comes to power, they propose increasing the Stamp Duty rate for non-UK residents. Meanwhile, the Conservatives would abolish Stamp Duty for first-time buyers (FTBs) on homes up to £425,000. To further support FTBs, Sunak promised a new and improved Help-to-Buy scheme. Similarly, the Labour manifesto pledged a permanent mortgage guarantee scheme.

All details are correct at the time of writing (19 June 2024)

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice, and the accuracy and completeness of the information cannot be guaranteed. It does not provide individually tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applied or proposed and are subject to change; their value depends on the investor’s individual circumstances. No part of this document may be reproduced without prior permission.

Understanding retirement village purchases

Posted on 25 April 202426 March 2025 by Sarah O'Sullivan

Are you contemplating purchasing a property in a retirement village? It’s crucial to comprehend the distinct elements of this type of property acquisition. In this guide, we will delve into the key considerations, financial implications, and legal matters to consider when purchasing in a retirement village.

What to consider when purchasing in a retirement Village

When it comes to the purchase of a property in a retirement village, there are several crucial considerations to bear in mind. These factors can significantly influence your lifestyle and overall contentment with your new home. The most significant aspects to consider are:

Location and accessibility: The situation of the retirement village is vital. Consider the proximity to amenities such as shops, medical facilities, and public transport. You may also wish to ponder the distance to family and friends, as well as any desired recreational activities in the vicinity.

Facilities and amenities: Retirement villages often offer a variety of facilities and amenities to enhance your daily living. These may encompass communal areas, fitness centres, swimming pools, gardens, and more. Take the opportunity to evaluate the available amenities and ensure they align with your interests and lifestyle.

Community and social aspects: One of the main attractions of retirement villages is the sense of community they foster. Consider the social aspects offered, such as organised activities, clubs, and events. It’s crucial to find a retirement village where you can connect with like-minded individuals and cultivate meaningful relationships.

What are the financial implications of purchasing in a retirement village?

Having a comprehensive understanding of the financial aspects involved will enable you to make informed decisions and ensure you are adequately prepared.

The costs may vary depending on the location and facilities offered by the village but can include:

the purchase price of the property,
legal fees, stamp duty, search fees
Service charges cover the upkeep and management of the communal areas and facilities. (It is advisable to review the service charge breakdown and consider any potential increases in the future.)
additional charges for amenities such as parking

Consult with our specialist solicitors who understand retirement village acquisitions to understand these costs fully.

Resale value is also a significant consideration when purchasing in a retirement village. Understanding the factors that can influence the resale value of your property can assist you in making a wise investment. Factors such as location, amenities, and the reputation of the retirement village can all influence the resale value. It is advisable to seek expert advice from estate agents specialising in retirement properties to gain insight into the resale potential of the village you are considering.

What are the legal aspects of purchasing in a Retirement Village?

There are three key legal aspects that you should be aware of:

Lease restrictions: These restrictions can vary depending on the specific village and its management. Our legal team can review the lease agreement and ensure you are fully aware of any limitations or obligations.

Conveyancing costs: Conveyancing is the legal process of transferring ownership of a property from the seller to the buyer. It involves various fees, including – solicitors’ conveyancing fees and any disbursement (i.e. third-party payments such as stamp duty, searches, bank transfer fees, land registry fees, payment for service charges to the Management Company or ground rent, if lease involved and also notice fees).

Inheritance and succession planning: It’s crucial to have a well-drafted will in place to ensure your wishes regarding the inheritance of your property are carried out. Additionally, you may wish to consider establishing a trust or making arrangements for any potential care needs in the future.

Purchasing in a retirement village can offer a range of benefits, including a sense of community and convenient amenities. However, it’s crucial to carefully balance these advantages against potential drawbacks, such as financial commitments and lifestyle restrictions. Take your time to read and understand the legal documentation associated with the purchase. If you have any questions or concerns, don’t hesitate to ask for clarification.

Be proactive in your communication with the retirement village management and stay informed about any updates or changes that may impact your purchase.

Exploring alternative options is also recommended to ensure you make the best decision for your retirement years.

What are the alternatives?

Retirement villages are not the only choice for retirees. Some individuals may find the structured nature of retirement village living restrictive. It’s important to consider whether you prefer a more independent lifestyle or if you would thrive in a community environment with rules and regulations.

Other alternatives include:

downsizing to a smaller home,
moving in with family,
or exploring assisted living facilities.

Each option has its pros and cons, and it’s vital to consider what suits your personal preferences and needs.

At Tees, our expert team of legal and financial advisers can help support you to make the best decision for you and your family. Contact us today to discuss your retirement village property acquisition.

Shared ownership home: What does ‘staircasing’ mean?

Posted on 20 December 202327 March 2025 by Sarah O'Sullivan

If you live in a shared ownership home, you might have considered buying additional shares in your property. This process is known as staircasing.

What is staircasing?

Staircasing is when you purchase more shares of your shared ownership property, gradually increasing your ownership percentage. As outlined in your lease, you have the option to buy further shares, which means:

Greater ownership: You own a larger portion of your home.
Lower rent: You pay less rent on the shares you don’t own.
Full ownership potential: Most shared ownership properties allow you to eventually staircase to 100%, becoming the sole owner.

To find out if your property allows full staircasing, check your lease or speak with your landlord.

Benefits of staircasing

When you staircase to 100% ownership, you’ll no longer pay rent. You will still need to cover your mortgage, but securing a standard mortgage rate may become easier, compared to a shared ownership mortgage.

How Does Staircasing Work?

Let’s say you initially bought a 30% share of your home. Later, you decide to buy an additional 20%. You would then own 50% of your property.

Interim staircasing: This refers to any partial share purchases (e.g., going from 30% to 50%).
Final staircasing: If you staircase to 100%, you become the sole owner.

Are there any restrictions?

Some properties have restrictions on staircasing due to planning permissions. This is often to ensure homes remain available for local people rather than becoming second homes. Check your lease or consult your landlord to understand any limitations.

Do you have to staircase?

No, staircasing is completely optional. It’s a great choice if your financial situation improves and you want to invest more in your home. However, it’s not a requirement.

Costs to consider

Staircasing does come with additional costs, including:

Property valuation: A surveyor will determine your home’s current market value.
Legal fees: You’ll need a solicitor to handle the legal process.
Stamp duty: Depending on how much you staircase, you may need to pay Stamp Duty.

Financing your staircasing

If you don’t have sufficient savings, you can consider remortgaging to release funds and extend your mortgage term. Many lenders offer options to help finance additional share purchases.

Final thoughts

Staircasing can be a great way to increase your property ownership and reduce rent payments. To explore your options further, review your lease, speak to your landlord, and seek professional financial and legal advice.

If you have any questions, contact our conveyancing team today.

Shared ownership homes: Repairs and home improvements

Posted on 2 December 202326 March 2025 by Sarah O'Sullivan

If you’re considering a shared ownership property, one of the most common questions is: Who is responsible for repairs and home improvements? Understanding your responsibilities can help you budget effectively and avoid any unexpected surprises.

What is shared ownership?

Shared ownership allows you to buy a percentage share of a property while paying rent on the remaining share, typically owned by a housing association or landlord. While this offers a more affordable route to homeownership, it also comes with specific responsibilities for repairs and improvements.

Who handles repairs and improvements?

Structural changes and home improvements

While you’re free to decorate and make minor cosmetic changes, any significant structural changes require approval from your landlord. This is because structural modifications can impact the property’s market value, which may affect the price if you decide to staircase (buy additional shares).

Keep in mind that a landlord is not responsible for upgrades like a new kitchen or bathroom if your motivation is purely aesthetic.

Initial repair period

Some shared ownership properties come with an initial repair period, typically lasting up to 10 years. This applies if you own less than 100% of the property.

During the initial repair period:

The landlord covers essential repairs but cannot use the reserve fund or service charges to pay for them.
You are still responsible for paying your service charges as usual.
You may be able to claim up to £500 per year from your landlord for certain repairs, including issues with water, gas, electricity, or heating systems.

You can check whether your property has an initial repair period by referring to the Key Information Document provided by your landlord before you reserve the home.

External and structural repairs

For new-build homes, external and structural repairs are usually covered by a building warranty for the first 10-12 years. If you purchase a shared ownership resale property, any remaining warranty period will transfer to you.

For flats, external repairs are typically the responsibility of the freeholder or building owner. The cost is then divided among all flat owners through your service charge.

What to Do if Repairs Are Needed

If an issue arises, contact your landlord as soon as possible. They will assess the problem and determine whether the repair is essential. Keeping clear records of all communications and repair requests can be helpful.

For further information, visit the government website for official guidelines.

By understanding your responsibilities, you can enjoy the benefits of shared ownership without unexpected repair costs.

Shared ownership: How to get on the housing ladder

Posted on 2 October 202326 March 2025 by Sarah O'Sullivan

Shared ownership can be a way of getting onto the housing ladder for many people. But, there are a few things you should consider first.

What is shared ownership?

Shared Ownership is a form of affordable housing. The term ‘shared ownership’ encompasses schemes where a registered social housing provider grants a lease of a percentage share of the property and rents the remaining percentage to the tenant. Shared ownership homes are offered by housing associations, local councils, and other organisations. They are called ‘providers’ or the landlords.

From a conveyancing perspective, the transaction is still dealt with by solicitors, and the usual conveyancing and mortgage costs are still payable when you opt for a shared ownership purchase.

Who is eligible?

You are only eligible to purchase a shared ownership property if you meet certain criteria. The government sets this criteria:-

You can buy a shared ownership if both of these apply:-

your household income is £80,000 a year or less (£90,000 a year or less in London)
you cannot afford all of the deposit and mortgage payments for a home that meets your needs

0ne of the following must also be true:

you’re a first-time buyer
you used to own a home but cannot afford to buy one now
you’re forming a new household – for example, after a relationship breakdown
you’re an existing shared owner, and you want to move
you own a home and want to move but cannot afford a new home that meets your needs

For some homes, you may have to show that you live in, work in, or have a connection to the area where you want to buy the home.

There are also some other specialist Shared Ownership schemes for people who:-

are members of the Armed Forces
are over 55 years old
a person with a long term disability

More can be found on the Shared ownership homes: buying, improving and selling: Who can apply – GOV.UK

Buying a shared ownership property

All shared ownership property, whether it is a house or a flat will be leasehold. The Provider will own the freehold interest in the property and will grant you a lease. A shared ownership lease will specify that you own a given percentage, which will be the share you agreed to purchase. The purchase price you pay will be a percentage of the market value which corresponds with the share you will receive. You can either have a brand new lease granted on a new build property or be assigned an existing lease on an older property.

The lease will usually contain a provision which will allow you to buy additional shares throughout the term as and when you are able until eventually you own 100%. This is known as “staircasing”. You should note however that not all leases allow you to staircase and those that do may not allow you to staircase to the full 100%.

Initial ownership can start at 10% ownership, but usually, a lease is offered with a share of 25%, 50% or 75% of the value of the property. This can be paid for with a mortgage or from savings. As with a usual transaction, a deposit will be required which is usually 10% of the purchase price of the share.

The remaining share is then rented from the Provider for an affordable rent. Your monthly outgoings may include a mortgage payment and rent but will be much lower than the mortgage costs if you were to buy outright. When you can afford to, you may be able to increase your ownership of the property by staircasing. This can also be from either savings or a further advance on a mortgage.

Example:-

If the market value is £150,000.00 and you agree to buy 25%, the price you pay will be £37,500.00. You will then pay rent, known as “specified rent”, on the remaining 75% share.

Staircasing

Once you have purchased the initial share of property you can choose to increase your share, if your lease allows.

The amount you can staircase by is dependent on what your lease says and its age.

If you are looking to buy more shares, you will still require a solicitor to do this. You will also require a valuation so that the additional share is calculated based on the current value of the property. Please get in touch with one of our property specialists as they can assist with interim staircasing and final staircasing.

Will I have to pay stamp duty land tax?

Yes, the tax will be payable, however, the amount is dependent on a couple of factors: –

If you are buying a new build property and you are the first owner, you have a choice to either pay Stamp Duty Land Tax on the share that you are buying or you can elect to pay the tax on the full market value of the property
If you are buying an existing shared ownership (an assignment) then you can only pay the tax on the amount that you are acquiring.

The provisions for stamp duty on shared ownership properties are complex and we suggest you contact us for specific advice on your particular transaction.

What is a maintenance charge?

In common with most leasehold properties, you will be obliged to pay a share of the landlord’s expenditure incurred in satisfying its obligations under the lease. The type of obligations varies depending on the type of property you are buying:-

For a flat this may include, cleaning and lighting communal areas, building insurance, external decoration and structural repairs all of which you will share with other leaseholders.
In the case of a house, this can include building insurance and sometimes the cost of maintaining any common areas of an estate.

These costs are usually collected with the rental portion of the payments that you make to the Provider.

Can I let the property?

It is not usually possible to let a shared ownership property though once you have staircased to 100% this may be an option. This will be specified in the Lease.

Selling a shared ownership property

If you have bought the house outright you are free to sell the property as you wish but your landlord is usually entitled to buy back the property so that it can be offered to other families who seek low-cost shared ownership. They are obliged to pay you the full market price for the property.

If you only own a share of the property your landlord may require that you sell that share to a household nominated by them or to the landlord themselves, again for the full market price.

You may find that a shared ownership property is more difficult to sell than a ‘normal’ property as the pool of buyers is smaller because not everyone will meet the required criteria. However, the provider may also have a waiting list of potential purchasers.

The lease with have instructions on what to do when you wish to sell the property. This usually entails:-

Telling the landlord you wish to sell
The landlord will try and find a buyer for you within what is called the nomination period. This can be from 4 to 12 weeks.
If the landlord doesn’t want to buy the property or can’t find a buyer for you in the nomination period, you are then allowed to sell on the open market. You can either offer this as the share you bought or sell the whole property.

What other things should I consider?

A shared ownership lease is seen to be a tenancy agreement rather than a long lease until it has been staircased to 100%. Terminating a tenancy is much simpler than forfeiting a lease since all the landlord has to do is prove that the rent is in 3 months’ arrears. It is therefore important to note that you are at serious risk if you do not keep up with your rental payments.

You will need to get a specialist shared ownership mortgage if you are using one to assist with your purchase.

There are some additional costs to consider when selling, these can include:-

Paying for the landlord’s valuation costs
Paying for the landlord’s legal fees
Paying a nomination fee, if the landlord finds a buyer for you in the nomination period.

If you want to purchase a shared ownership property, please do not hesitate to get in touch, for bespoke advice.

We are members of the Law Society Conveyancing Quality Scheme.

Guide to buying new build homes

Posted on 25 July 202326 March 2025 by Sarah O'Sullivan

Buying a property is an exciting time and buying a new build property can be even more exciting as you are buying a blank canvas, with all new fittings – which you may be able to customise. However, buying a new build property is more complex than buying an existing property, with a lot more that needs to be considered. Here our conveyancing expert Marie Rodgers, sets out what you need to know.

What is a new build home?

A ‘new build’ is defined most usually as a property that was built, converted or refurbished within the last two years. People most commonly think of new build as totally new houses – those which are being bought ‘off-plan’. An ‘off-plan’ property is one that is yet to be built; it may be part-way through construction or not yet begun. The sale details for an off-plan property will comprise floorplans, working drawings and computer-generated images instead of photos, to see what the finished product will look like. However, ‘new build’ also includes properties that have been occupied or rented before, but are still owned by the builder or developer.

Reservation fee for new builds

When you agree to purchase a new build, the developer will ‘reserve’ this plot for you in return for paying a ‘reservation fee’. The amount of this fee can vary depending upon the property and development but usually varies between £500-£2,000. This forms part of the agreed purchase price and is deducted from the balance which you pay for the property on completion. It’s important that you check your reservation agreement carefully in order to work out whether this reservation fee is refundable in the event you do not proceed with the purchase of your plot.

Exchange deadline

A key difference with new builds is that the developer will impose a deadline by which an exchange of contracts must take place. This is usually 28 days. This means that the process will move at a very fast pace and it’s therefore important that you instruct a conveyancer quickly. Also make sure you act quickly upon their instructions as to what they require to progress your purchase. In the event the exchange deadline is not met, the developer reserves the right to re-market the plot, so you could lose the property.

Extras might incur more Stamp Duty Land Tax (SDLT)

One of the benefits of buying a new build property is that you have the ability to customise the property by paying for ‘extras’. Examples of the types of extras you might be able to choose from are upgraded kitchen appliances such as cooker hob, integrated fridge freezer and dishwasher, better kitchen units, better quality floor tiles, bespoke fitted wardrobes and even things for the garden such as turfing and an outside tap.

However, these additional extras may incur SDLT in their own right so it’s best to check this point with an expert. At Tees, we can refer you to a stamp duty specialist who can accurately calculate the correct SDLT you should be paying for your property.

Know exactly what you’re buying in your new build home

The marketing people will show you lots of printed materials and maybe videos to encourage you to buy but these may not show exactly what you will be buying. Your plot could be in a different location on the development site, closer to roads, recreation grounds, with different lights etc. Another thing to be certain of is the precise spec for your new home. You need to know what fixtures and fittings there will be and what building materials will be used throughout the property. Make sure you know what has and hasn’t been included in the total cost so you don’t have a problem later on.

Complex documentation

New build conveyancing is much more complex than that for an existing property. Your conveyancer will be processing a vast amount of additional documentation which comes with purchasing a new build home. They will need to ensure that the necessary planning and building regulation approvals are in place for the development and appropriate provisions are in place for the construction of the roads and sewers on the estate. They will also need to ensure that you have the necessary rights to use these roads and sewers. It’s therefore important that you instruct a conveyancer with knowledge and experience in new build conveyancing who will be able to guide you through the process and identify any issues should they arise.

Mortgage offers on new build homes

Due to the short timescales in which you have to exchange contracts, it’s important that you obtain a mortgage offer as soon as possible. You will need to make sure you have a valid mortgage offer in place before an exchange of contracts. Your conveyancer will also need to ensure that any conditions contained within this offer have been complied with and that the lender is happy to proceed.

If your property is not yet built when you exchange contracts, it’s possible that your mortgage offer may expire before you get to move into your new home. In this instance, you should speak to your mortgage broker or lender directly, in order to ensure that your offer can be extended, or a new offer obtained, should it be required. You should bear in mind that if a mortgage extension or new mortgage offer is required prior to completion, any new product or interest rate attached to the mortgage, may not be as good as the original mortgage offer issued.

Dates for completion

When you exchange contracts on a new build property, if the build is not complete, then a ‘fixed’ date cannot be agreed for completion. Instead, the developer will provide you with an ‘estimated’ date for completion. This is the developer’s best estimate for when the property will be completed based upon their forecasts. Unfortunately, factors may delay the build which are outside of the developers’ control. At Tees, we will always ensure that there is a ‘termination’ (often referred to as a ‘longstop’) date in the contract. This is the final date by which the developer has to complete the build of your property, failing which, you can terminate the contract and have your deposit and reservation fee returned to you.

Annual maintenance charge

A new property often forms part of a larger development and will involve the use of shared common areas, such as green spaces or play areas, shared accesses, or private roads. The costs for any upkeep and maintenance for these areas will be payable by the individual property owners by way of an annual maintenance charge. The amount of this charge will vary depending on the development. You should discuss this directly with the site office at the development before reserving your plot so that you are fully aware of the ongoing maintenance charges for which you will be liable.

Structural warranty

Your property will be sold with the benefit of a 10-year structural warranty. Your conveyancer will ensure your warranty is in place upon completion and provide you with a copy of the necessary documentation which you will need in the event you ever need to make a claim in future or sell the property. They will also check with your lender in order to ensure that they are happy with the warranty which is being provided.

Do I need a snagging list for my new build home?

It’s common to find defects that require rectifying. They could be relatively small issues such as poor quality paintwork or a hinge that is broken or more major issues such as a leaking pipe. The developer should check everything, but nothing is foolproof so you need to create a list of what needs doing – a snagging list. Make time to walk through the whole house systematically to check for marks, scratches, and things which are broken. You can check floors and surfaces are level and whether everything works properly. Make sure there are no leaks from any taps.

You are not able to delay moving into your property for any snagging works which may be required. At Tees, we advise that you inspect your property before moving in, once it is completed, in order to check the finish and ensure that no major works remain outstanding.

However, it may not be possible to do it before you complete if the housebuilder won’t give you access. If you do it after you move in, don’t wait too long, in case the housebuilder tries to say you caused the damage yourself. However, you do have two years from your completion date to report any defects to your housebuilder which they have to rectify as part of your property’s warranty. At Tees, we will ensure you are aware of your rights to get snags fixed and ensure there is an obligation on the developer to carry out these works. If a dispute arises, we have expert property litigation solicitors at Tees.

At Tees, our conveyancing experts have a wealth of knowledge and experience in the world of new build conveyancing and so are best placed to guide you through every step of the way, from initial instruction to completion.

Release equity from house: Increase your income

Posted on 3 July 202326 March 2025 by Sarah O'Sullivan

As we’ll explain in this article, equity release is just one of several options that are now available to over 55s who wish to increase their income. Here at Tees our Equity Release Council member and SOLLA accredited experts are on hand to help and advise you every step of the way.

We’re all living longer and often, retiring later.

Changes to the state pension age, along with anticipated shortfalls in many private pensions, mean that we’re likely to need to look to alternative solutions as to how to fund our lifestyles in or approaching retirement – or risk relying on debt in later life.

In the past five years, the total value of debt held by the over-55s is estimated to have increased by 47 per cent and in another five years, this total value is forecast to increase by 35 per cent, rising to £397bn by 2024.

The good news is that the options to increase your income in later life are growing, becoming much more attractive – and can offer you peace of mind.

Since the government introduced pension reforms in 2015, the financial services industry as a whole – including the mortgage market – has begun to catch up with the challenges and opportunities of social change and consequently, lending criteria relating to age and retirement status have become a good deal more flexible.

Only a few years ago, there might have been a small handful of building societies prepared to lend to people of older age, however today, the options are many and varied and the previously niche equity release market has seen rapid growth and development into an industry that is now more commonly referred to as the later life lending market.

It is estimated that the UK’s over-55s currently own £1trillion in housing wealth.

What is later life lending?

Put simply, it is a mortgage offered to the over 55s that is designed to let you make use of the money that’s built up in your home and help you live better in your retirement.

What are the different types of later life lending?

Lifetime Mortgage

This is a form of equity release that lets you unlock the value in your home as a tax free lump sum of money.

How does equity release work?

Equity release is essentially like a long term loan. However, you don’t have to make monthly payments, unless you choose to, and the loan is usually repaid when the last borrower moves into long term care or dies, and you keep full ownership of the property. The maximum loan amount depends on your age and how much your property is worth.

Equity release may not be right for everyone. It may affect your entitlement to state benefits and will reduce the value of your estate.

Retirement Interest Only (RIO) Mortgage

A retirement interest only mortgage is very similar to a standard interest only mortgage, but with some differences.

The main part of the loan (capital) is usually only paid off when the last borrower moves into long term care or dies and you only have to prove you can afford the monthly interest payments.

Retirement Capital & Interest (RCI) Mortgage

Much like a standard repayment mortgage you pay back both interest and capital on a monthly basis.

The main difference is that you can borrow up to a higher age than on a standard mortgage but the product is still designed to repay your mortgage in full by the end of your term.

You’ll need to be able to afford the repayments on a monthly basis.

Home Reversion Plan

A Home Reversion Plan allows you to access all or part of the value of your property while retaining the right to remain in your property, rent free, for the rest of your life.

The plan provider will purchase all or part of your house taking into account your age and your health and will provide you with a tax free cash lump sum (or regular payments) and a lifetime lease, guaranteeing you the right to stay in your property rent-free for the rest of your life.

Is borrowing in later life right for me?

It’s often a good idea to speak with family members or trusted friends before taking on further borrowing in later life, they can often offer support and suggest other ways you could raise money. Borrowing in later life can have an impact on inheritance amounts you leave and any state benefits or local authority grants you get.

Is it wise with increasing interest rates for parents to release equity to assist in paying off or reducing their children’s mortgages?

This is a complex decision and will depend on various factors, here are some considerations:

Helping your children may be beneficial if you have excess funds and you are in a financially stable situation. It’s important to ensure that you have enough savings for your own needs and emergencies before considering assisting your children with their mortgages.
Releasing equity from your home may affect your retirement plans. It’s crucial to evaluate how using this equity will impact your future financial security, as you may be reducing the value of your estate or limiting your access to funds in the long term.
Before considering equity release, explore other possibilities for helping your children with their mortgages. For instance, you could recommend they seek financial advice or explore other forms of financial support that may not have long-term consequences for your own financial situation.
While helping your children reduce their mortgage loan can be beneficial, it’s essential to involve them in the decision-making process. Make sure they understand the implications and responsibilities associated with receiving financial assistance.
Releasing equity from your home may have tax implications, such as potential inheritance tax considerations.
Releasing equity may reduce your financial flexibility. Consider whether you may need access to the equity in the future for other purposes, such as long-term care costs or other unforeseen circumstances.

Ultimately, the decision to release equity to assist your children with their mortgages depends on your financial circumstances, risk tolerance, and long-term goals. It’s advisable to seek advice from a qualified financial adviser who specialises in this area of advice or a mortgage specialist who can provide personalised help and guidance on your specific situation.

Can I apply for a later life mortgage?

Many lenders will consider applications from people aged 55 up until their 85th birthday, with some lenders offering existing customers a mortgage up to their 95th birthday.

What can the money be used for?

The money released can be used for lots of different things. Some common uses include home improvements, family gifts, funding the purchase of a further property, buying a car, travelling abroad, or funding care.

Example

Mrs Hurst needed to carry out improvements on her home and gift her daughter money to aid her in buying a house. At the time, she held a lifetime mortgage previously arranged with another lender at an uncompetitive rate of 7.19%.

In order to achieve her goals, Mrs Hurst required an urgent loan of £226,160 and a more competitive rate of interest than her existing lifetime mortgage.

Tees’ Solution

Utilising a ‘whole of market’ approach, a new Lifetime Mortgage product was secured for Mrs Hurst, offering a significantly lower rate of interest of 3.92%.

As well as releasing an initial loan, Mrs Hurst released an additional £32,665 in order to fund the necessary £25,000 for home improvements and £10,000 to aid her daughter’s home purchase.

Even though the transaction involved releasing additional equity from her home, the lower rate of interest that was secured for Mrs Hurst on her new Lifetime Mortgage arrangement has resulted in a total saving of £256,049 of mortgage interest payments over a 15 year period, compared with if she had remained with her previous lender.

Outcome

The savings we secured for Mrs Hurst means she is now more able to enjoy a more comfortable retirement.

Our clients come to us for many different reasons. One of these is we offer lenders from the whole market and are able to access low rates. This ensures our clients can enjoy their retirement to the fullest and get the most out of the value of their home.

The Tees difference: a bespoke service that’s focussed on delivering what you really need

Toni Chalmers-Smith is a later life lending specialist at Tees who has worked in the financial services industry for over 25 years. While fully qualified in all forms of life, health, mortgage and pension business, Toni is expert in advising clients who require later years advice, which includes investments, inheritance tax and estate planning, equity release and care fees planning. Toni works closely with Tees’ legal advisers in providing specialist advice on all areas of later life lending and also offers older clients a financial review and support service, especially if an individual or family member is unable to cope with day to day financial decisions.

Catherine Banks is an experienced solicitor in Tees’ residential conveyancing team, and specialises in later life lending conveyancing. Together Toni, Catherine and the rest of the Tees team work seamlessly together to ensure that the solutions they provide truly fulfil your needs, and are fully tailored to your individual circumstances.

Toni and Catherine pride themselves on offering a friendly, personal service which is designed to put you at ease and support you in these important financial decisions. Their approach is highly ethical; when dealing with older clients where there may be a vulnerability concern Toni can offer an advisory service and where necessary, work with a Power of Attorney and/or make an application to the Court of Protection on your behalf.

Expert financial and legal advice all under one roof

There are many advantages of having your financial advice and legal conveyancing services all under one roof:

A fast, efficient, joined-up service that is second to none.
Transparency in terms of our fees and any associated costs.
A fully comprehensive service that is highly cost-effective.

We at Tees strongly believe that financial and legal advice should take you to the stage where you can make clear and informed decisions, happy in the knowledge that you have received all the information and choices needed to reach those decisions.

Toni is a SOLLA Accredited Adviser and operates under its strict code of conduct. Both Toni and Catherine are members of the Equity Release Council: https://www.equityreleasecouncil.com/

Only specialist advisers can offer equity release advice.

Estate planning: Equity release and inheritance tax

Posted on 26 June 202329 March 2025 by Sarah O'Sullivan

Paul and Margaret Evans are a retired couple in their late 70s. They own a valuable property worth £1.2 million and have savings and investments worth £800,000. They have two children and wish to minimise the impact of inheritance tax on their estate, while ensuring they have sufficient funds for their retirement.

Client objectives: Paul and Margaret Evans wish to reduce their potential inheritance tax liability and maximise the amount they can pass on to their children. They also want to maintain their current standard of living and have the flexibility to access additional funds if needed.

Strategy: To achieve their objectives, Paul and Margaret decide to explore the option of equity release as a part of their inheritance tax planning. Equity release allows them to release a portion of the value tied up in their property while continuing to live in it.

Recommendation and Implementation:

Initial Meeting: Paul and Margaret discuss with Toni Chalmers-Smith, their financial adviser at Tees Wealth, inheritance tax planning and equity release. Toni assesses their financial situation, including their property value, savings and investments, and determines the potential inheritance tax liability.

Equity Release Option: After reviewing Paul and Margaret’s financial situation, Toni recommends a lifetime mortgage as the most suitable equity release option. A lifetime mortgage allows them to borrow against the value of their property, either as a lump sum or in smaller amounts over time.

Loan Amount and Interest Rates: Toni calculates the loan amount Paul and Margaret can release based on their age, property value, and health conditions. They also discuss the interest rates, repayment options, and implications for their estate.

Estate Protection: To ensure that the inheritance for their children is maximised, Paul and Margaret decide to opt for an interest roll-up plan. This means they won’t make regular interest payments, and the interest will be added to the loan balance. The loan, including the accumulated interest, will be repaid upon their death or if they move into long-term care.

Inheritance Tax Planning: By releasing a portion of their property’s value, Paul and Margaret can use the funds to make gifts to their children, reducing the overall value of their estate. They consult with a solicitor at Tees to ensure the gifts are structured appropriately within the inheritance tax rules and exemptions.

Ongoing Review: Paul and Margaret maintain regular contact with Toni and their solicitor to review their estate planning strategy and make adjustments as needed. They understand that changes in legislation or their personal circumstances may require modifications to their inheritance tax planning approach.

Outcome

By utilising equity release for inheritance tax planning, Paul and Margaret achieve several objectives:

Inheritance Tax Savings: By gifting a portion of the released equity to their children, Paul and Margaret effectively reduce the value of their estate, potentially resulting in significant inheritance tax savings.

Retained Standard of Living: Paul and Margaret can access the released funds to maintain their current lifestyle, cover healthcare expenses, or enjoy travel and leisure activities during their retirement.

Flexibility: With an interest roll-up plan, Paul and Margaret have the flexibility to choose how and when they access the funds, whether as a lump sum or in smaller amounts over time with a drawdown facility. This provides them with financial security and peace of mind.

Legacy for Children: By reducing their inheritance tax liability and making gifts during their lifetime, Paul and Margaret can pass on a larger portion of their estate to their children, ensuring a more substantial financial legacy.

Important Considerations:

If you are releasing equity to gift money to another person, this will be exempt from IHT if you live for 7 years thereafter, and do not derive any direct or indirect benefit back.  However, if you die within 7 years of making the gift, it will be brought back into account with the rest of your estate when calculating the tax.

It’s crucial to note that equity release, including lifetime mortgages, is a complex financial product. Mr and Mrs Evans sought professional advice from a qualified financial adviser and solicitor to ensure they understood the risks, costs, and implications of their chosen strategy. Everyone’s circumstances are unique, and it’s important to consult with a specialist within this area of advice.

Tees is a trading name of Tees Financial Ltd, which is authorised & regulated by the Financial Conduct Authority, Registered in England, and Wales number 4342506.

Tees is a trading name of Stanley Tee LLP regulated by the Solicitors Regulation Authority, Registered in England in England, and Wales number OC327874.