Nationwide Building Society transfer of equity: q and a’s

• My friend and I got a joint mortgage with Nationwide Building Society on a property a couple of years ago. I am now thinking of purchasing a property by myself and my friend would like to buy me out. Once we have agreed an amount where do we go? Is there likely to be any issue with Nationwide Building Society with him being on the hook for the total loan rather than only half of it?
• What is the process for adding or removing names (transfer of equity) to or from my Nationwide Building Society mortgage account?
• My ex are seeking to get a lawyer in place for a new mortgage with Nationwide Building Society. Transfer of Equity conveyancing is also requiredI have used the different rating based websites and the results are from all over the country. Is it important to appoint a conveyancer local to us?
• My father passed away half a year ago leaving a loan-free house to me and my brother 50:50. He has always lived in the house, there was a condition in the will saying the premisescould not be sold for 24 months after her death so he could remain there for a specified time frame. He now wants to remain in the premises beyond the prescribed period. We have discussed a transfer of equity. Would I be right in thinking that we'd get a valuation then he'd get a mortgage in the traditional way to purchase my equity?
• Is it sensible to stop the direct debit for my mortgage with Nationwide Building Society as soon as a date for my remortgage and transfer of equity has been agreed?
• Will I incur any charges for a Transfer of Equity where the existing home loan is with Nationwide Building Society?
• My wife and I jointly own a investment property. I am a top rate tax payer. Ideally I wish to complete a transfer of equity into her name in order reduce our tax on rental income. Assuming Nationwide Building Society are happy with this the legal fees are not prohibitive. What are the implications when we dispose of the property? Would my GGT relief be lost.

Examples of questions in a conveyancing solicitor questionnaire concerning a Nationwide Building Society Transfer of Equity

Important warnings to consider in conjunction with the above Nationwide Building Society transfer of equity information :

Tax and Legal

There are numerous potential tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Nationwide Building Society conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

Should the tenure of your property be leasehold, the lease may have a requirement for notices to be served and that you have a license to do so from the freeholder. If such conditions are not complied with you may be in breach of your covenants under the lease. This could potentially result in the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made pursuant to an Order of the Court, then Insolvency Indemnity Insurance is not required. In other cases, where a property is being transferred at less than market value between joint owners, an Insolvency Act Indemnity Insurance policy may be required. This is something that that your conveyancing solicitor will check with Nationwide Building Society This is because, if the outgoing party is made bankrupt in the future, their Trustee in Bankruptcy could argue that they had transferred the property in order to avoid their creditors and apply to the Court to have the transaction set aside. If this happens, it could affect your lender or a future buyer from you as they would lose the property and the lender may not get back what they have loaned to you. The Insolvency Act Indemnity Insurance policy only protects lenders such as Nationwide Building Society or future buyers from you. If there is no mortgage and the outgoing owner is made bankrupt, there is a risk to you that you could lose your home if the transfer is set aside. The cost of the Insolvency Act Indemnity Insurance policy is dependent on the market value of the property at the time of completion of the transfer of equity conveyancing.

Preparing the Transfer of Equity with a Nationwide Building Society Mortgage

When it comes to preparing the the Land Registry documents your lawyer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If Nationwide Building Society is joining in the transfer to release someone from liability, put the release in the ‘additional provisions’ panel if someone is entering into a covenant relating to the charge, place it in the ‘additional provisions’ panel stamp duty land tax is not payable when there is no chargeable consideration for the transfer (Schedule 3, paragraph 1 of the Finance Act 2003). In the case of a transfer subject to a charge (even if the transfer is by way of gift) or if a property has been transferred for no value and there is an associated discharge, HMRC would view this as an assumption of an existing debt by the purchaser (Schedule 4, paragraph 8 of the Finance Act 2003) and stamp duty land tax may be payable if you wish you may state in the ‘additional provisions’ panel that ‘This transfer is made subject to a charge dated… in favour of…’

On form AP1, your conveyancing solicitor should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Information provided on this webpage is for general information and only applies to England and Wales. It should not be regarded as advice for members of the public who should contact their lawyer,mortgage broker, insurer and accountant for specific advice relating to transfer of equity. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.