The London property market is fast-paced and competitive and includes a wide variety of properties from new-builds, serviced flats and modern apartment blocks to post-war semis, Victorian townhouses and listed buildings. You might think that the legal aspects of buying property in the capital are the same as everywhere else, and to some extent they are, but there are some key differences and important elements which you have to be aware of when considering how to navigate the London Property market.
When you are thinking about buying property in London, of course you need to consider the practical things such as defining your budget, securing pre-approval for a mortgage, researching neighbourhoods and considering future re-sale values. But in this guide, we will outline the specific legal considerations you need to make which highlight how and why London is a unique property market all of its own.
The key legal steps for property buyers in London
The conveyancing process for properties in London is broadly the same as it is anywhere else in the UK, so we have included those important steps here, but we have also included the legal elements which make London a more challenging market to understand and navigate. This leads us to the first, and perhaps most important point:
- Appoint a conveyancing solicitor with local knowledge – It is essential that you are making decisions on the back of skilled and detailed knowledge of London and the complexities presented by the London property market. You need to be working with people who have a successful track record of buying and selling a range of properties in the capital and who understand what barriers, challenges and potential pitfalls you might face. This will also help you deal with the fast-paced and competitive nature of buying property in London, where you need good information to hand and expert advice in order to make informed decisions quickly.
- Leasehold property complexities – The proportion of leasehold properties in London is far higher than the national average. In 2023 this was 36% against a national average of 19%. This dates back to how the city has developed from large estates being owned by wealthy families and institutions, which were leased rather than sold. Large parts of Mayfair and Belgravia are owned by the Grosvenor family, for example. With a large number of converted properties and new-build flats in London, this also attracts leaseholders. Lease agreements therefore present legal complexities in terms of ground rent, service charges, lease lengths and conditions. There may also be some restrictive covenants in place where approval is needed to make certain changes. This potentially adds further legal complications.
- Instructing searches – Local authority searches are a standard part of the conveyancing process, and you need to be aware of possible drainage, water and environmental issues with a property, but in the capital there are so many more construction and development projects ongoing that these searches have to be more detailed. Planning issues are constant in London and new developments could easily impact on your enjoyment or experience of a property, or its value. Experienced conveyancing solicitors in London will have detailed knowledge of planning issues, and will be able to interpret search results in order to present a clear picture for potential buyers.
- Property surveys in London – Again, a structural survey is essential for identifying repairs and structural needs and for establishing the true value of any property. In London you would need to conduct the highest level of detailed survey because this can have a significant impact on the value and the price you pay for a property. When properties are so much more expensive in the capital, discovering hidden issues with things like subsidence, damp or dangerous electrical wiring could save you a considerable amount of money.
- The buy-to-let market in London – A surge in property development combined with rental market deregulation to trigger a dramatic rise in the buy-to-let market in London in the late 1990s. This applies to commercial, residential and mixed-use properties and to all areas of London. Furthermore, demand from different sectors ensures this is a robust and potentially lucrative market for property investors. However, buy-to-let property purchases are often carried out through limited companies, which presents tax and liability considerations, while buy-to-let mortgages are not as easy to secure as personal mortgages. There are also different stamp duty requirements for buy-to-let properties, so again, expert conveyancing is needed.
- Overseas property investors – London is a secure and attractive market for overseas property investors, particularly due to the weaker pound in recent years. International buyers face additional regulatory requirements however, such as overseas companies, trusts and individuals having to register with Companies House via the Register of Overseas Entities (ROE). There are more checks and paperwork in order to comply with ROE, as this ensures transparency and helps to prevent money-laundering. There are also specific tax implications and currency exchange considerations which overseas investors in the UK need to understand.
- Listed buildings in London – As you would expect, London has a high concentration of listed buildings. These are architecturally important properties that need to be protected and preserved, and this can also include many residential properties in areas such as Westminster, Kensington and Chelsea and any areas where properties are densely built or historically sensitive. Special permissions are needed for any changes made to a listed property. This also means you may be faced by restrictive covenants which prevent you using, altering or developing a property how you want to. This adds to the skillset and diligence required of a conveyancer in London.
Outside of these issues which make London a very specific property market with unique challenges, of course you need a conveyancing solicitor to review your contract of sale and the title deeds, and to process the exchange of contracts and the paying of your deposit. After this they should oversee the transfer of funds, registering legal ownership and other issues such as paying Stamp Duty Land Tax. These are the final legal steps you must take, and hopefully you can now appreciate the special nature of the London property market and how appointing a conveyancer with experience of this unique market is essential.
