How to Transfer Ownership of a House Without Selling

A time may come when you wish to pass on all (or part) of your home to someone else. It might be after a marriage, or it might be to help your children have a stake in some property. Whilst transferring ownership isn’t as complicated as selling your house it does have some very precise procedures for you to follow.

We’ve put together the steps you need to follow so the ownership of your home can be transferred legally and without stress.

Before we jump into those, let’s take a little look at what transferring ownership is and how it might affect you.

What is a transfer of ownership?

Should you be transferring complete ownership, or just part of it, you’ll be doing what is known as transferring equity. In simple terms, transferring some or all your share of the ownership of the home.

Think about it like this. If you own a home worth £400,000 and you’ve paid £150,000 off the mortgage, you’ll be transferring that portion of the value to someone else. The remaining balance will then be paid by the new owners, or you and the new owners if you still retain shares in the property.

It’s considerably different from selling a house as when equity is transferred, at least one of the owners will still retain some degree of ownership.

Why would you transfer ownership of a house?

The transfer of ownership, or transfer of equity as you’ll often see us refer to it as could be needed for a host of reasons. Common reasons for transferring ownership include:

• Divorce or separation
• Marriage or new relationship
• Tax efficiency

How to transfer ownership of a home

If you decide to transfer equity in your home, there are a few steps to follow. Missing just one could mean you have failed to transfer ownership properly or may have transferred more than you wanted.

1.      Consult your solicitor

Before doing anything, inform your solicitor of your wish to transfer ownership. Whilst it is possible to do it yourself, it would be highly recommended to have a legal professional advise you.

Notifying your solicitor means they can advise you on the things to do and when to do them. It will come at a cost, but this could easily pale into insignificance if you were to do it incorrectly and end up with penalties and problems that require you to start over and eventually approach a solicitor.

2.      Obtain a copy of the title deeds

Your solicitor will start the process by getting an official copy of the title deeds from the Land Registry. Checking for information such as mortgage, owners and whether there are any restrictions on the property.

With transfer deeds in hand, the solicitor can review all aspects of the current ownership and see whether your wishes for a transfer of equity are possible. If a mortgage is outstanding for example, it could complicate things.

3.      Prove your identity

Your solicitor will want to have proof that you are who you say you are. Provide them with your passport and utility bills.

Your identity document is important. Without it, you won’t be able to proceed with a transfer of ownership. If you are using a solicitor to help with your ownership transfer, give the ID to them. If you do it all yourself, you’ll need to show them to the Land Registry.

4.      Drafting a deed of transfer

The solicitor will now draft your deed of transfer and any other legal paperwork specific to the transfer. The deed of transfer will include property details, current owner details, new owner details and what shares each has/will have in the property.

The deed of transfer will need to be signed by all parties involved, this could include mortgage lenders, the person taking the share of ownership, and anyone else connected to the transfer of ownership.

5.      Notify all third parties

Third parties such as your mortgage lender will need to know about the transfer of ownership. They will need to give written consent so that they are happy for the new owner to now have some level of responsibility for the mortgage.

The lender will want to ensure that it can still be paid its money, therefore they will only grant consent if the new owner has the financial ability to keep up with payments. If no mortgage remains, the lender will not need to be involved but other third parties, such as other owners will.

6.      Sign the transfer deed

With all paperwork completed, third parties informed, and approval given if required. You can now sign the deed of transfer.

The solicitor will double-check all the paperwork and ensure it is ready for signing; you’ll need to do this in the presence of the solicitor and an independent witness.

7.      Inform the Land Registry

The Land Registry now needs to be informed of the transfer. This will ensure the transfer is legally recognised and the new owners are now named on the title. This will cost a fee dependent on the value of the home.

And that’s it. You’ve transferred ownership of a home without selling it. Just remember, utility providers, local authorities and more will all need to be informed of the change.

You are likely to still have some questions. Don’t worry, we’ll answer those now.

How long will it take to transfer ownership of a home?

Much depends on your transfer. If you are transferring ownership of a house and there is still a mortgage on it, the process may take some time. With permission needed from the lender, your wait could exceed the 4-5 weeks it can normally take. Progress can also be slowed if there is a divorce or complex legal issues to tackle.

It largely depends on the complexity of the transfer and how many parties may be involved. Assisting your solicitor with any queries they may have and providing information when required will speed up the process.

How much does it cost to transfer home ownership?

It can cost next to nothing, but it can also cost a substantial sum. Solicitor fees could be a huge expense but one worth paying if you want everything to be done correctly. You’ll then have the cost of registering the change with the Land Registry. This can cost approximately £500-£1,000.

There might then also be fees to pay the lender. If the person you are transferring ownership to requires a new mortgage, there will be charges for searches, new mortgage products or modifications to the existing deal.

Finally, stamp duty may also apply if a mortgage balance exceeds the stamp duty threshold.

Could I transfer equity to my child even if they are under 18?

Yes, but they will not legally own the property until they reach the age of 18. Should you wish to transfer to a child, you’ll need a Deed of Trust. This allows someone else to hold the property temporarily with it being passed on once the young person reaches 18 years of age.

Do I have to tell my mortgage lender if I’m transferring ownership?

Yes. If the property has an outstanding mortgage, the lender must be informed of your wish to transfer ownership. They will want to assess who is now to be responsible for any mortgage payments and see whether the agreement can be kept or whether it needs to be altered.

Should you be using a solicitor, the lender will stipulate to them what conditions may need to be met for them to consent to the transfer.

Transferring ownership can be quite simple but it can be quite slow. With the chance of a mortgage lender also not consenting to the transfer, it may sometimes be better to sell instead. That way you can give a cash lump sum instead to the person you were transferring ownership to. At Sell House Fast, we can help with that. We buy any home, regardless of its condition or location, and where a transfer may take 4 weeks, we can buy your home in just seven days. Contact us today to find out more and secure that fast house sale.