Have you at last been able to buy the house of your dreams thanks to the Stamp Duty holiday?
Stamp Duty has always been a significant expenditure that has to be factored in when deciding whether you can afford to move to ‘the perfect house’ and the opportunity to move without this additional expense has seen a stampede of buyers wanting to complete purchases before the end of June, when the holiday comes to an end.
Unfortunately, lots of people have also found themselves furloughed due to the pandemic and, as a result, mortgage lenders have insisted that, where a couple are buying and one partner has a reduced income the mortgage can only be assessed on the income of the working partner.
The ownership of a property consists of the legal title and the equitable title. The legal title is what is shown at Land Registry and the equitable title refers to the monetary value of the property. When a property is purchased in one name the legal title will be shown at Land Registry in the sole name of the purchaser. There is a presumption that the legal owner has the right to the whole equitable title.
However, it may be that the other partner who is unable to go on the legal title has contributed towards the purchase price. In this case a Declaration of Trust can be executed by both parties to state how the value element of the property is to be divided on sale after the payment of the mortgage.
A Declaration of Trust can also be used where two parties buy a property together, but they contribute unequal shares to the purchase price. In this case, the agreement can state that one party gets back a lump sum and the remaining equity is split equally between them, or it might provide that they receive different percentages of the remaining equity once the mortgage has been paid off.
If you are rushing to complete your purchase before the end of March please don’t overlook the importance of executing a Declaration of Trust to protect the interests of all concerned. I can prepare the necessary paperwork quickly and there will be no delay to the conveyancing process.
If you would like to talk to me about Declaration of Trust, please call me on 01935 382689 or email at catherine.murton@pardoes.co.uk
PardoesSolicitors