LIBF CeMAP (Certificate in Mortgage Advice and Practice) — All Questions

A property held 'freehold' is best described as:

• a.Ownership only until the mortgage is repaid
• b.Ownership of the land and any buildings on it outright, for an indefinite period, with no landlord above✓
• c.A right to use the land for farming for one season
• d.A right to occupy the property for a fixed number of years granted by a landlord, in return for ground rent and service charges

Freehold (technically the 'fee simple absolute in possession') is outright ownership of land and buildings for an indefinite period, with no landlord and no ground rent. This contrasts with leasehold, where ownership is for a fixed term granted by the freeholder.

'Commonhold' is a form of tenure in England and Wales that allows:

• a.A single freeholder to own an entire block of flats and grant each occupier a long lease with a peppercorn ground rent
• b.Land to be owned only by the Crown
• c.A tenant to occupy for 99 years and no more
• d.Owners of individual flats (units) to hold the freehold of their own unit while jointly managing the common parts through a commonhold association✓

Commonhold (Commonhold and Leasehold Reform Act 2002) lets each unit-holder own the freehold of their flat while a commonhold association (owned by the unit-holders) owns and manages the common parts. It was designed as an alternative to leasehold flats, though it remains uncommon in practice.

A 'flying freehold' occurs where:

• a.The property has no roof
• b.Part of a freehold property overhangs or lies beneath another person's property, such as a room above a neighbour's passageway✓
• c.The freehold changes owner every year
• d.A freehold that is owned jointly by an airline and the local airport authority because of aircraft flight paths overhead

A flying freehold arises where part of a freehold property extends over (or under) land or property belonging to someone else - for example a bedroom built above a shared passage. Lenders can be cautious because of potential support and repair issues, so it may affect mortgageability.

Under the Leasehold Reform (Ground Rent) Act 2022, most new long residential leases in England and Wales may only charge ground rent of:

• a.Whatever the freeholder wishes
• b.Double the service charge
• c.A token 'peppercorn' (effectively nil)✓
• d.Five per cent of the property's capital value each year, rising in line with inflation throughout the term of the lease

The Leasehold Reform (Ground Rent) Act 2022 restricts ground rent on most new long residential leases to a peppercorn (effectively zero), tackling the problem of escalating ground rents. It applies to qualifying new leases, not automatically to existing ones.

A leaseholder of a flat is typically required to pay a 'service charge'. This is a payment towards:

• a.The freeholder's personal income tax and the cost of the freeholder's own buildings insurance on their separate properties
• b.The mortgage lender's profit
• c.The leaseholder's own furniture
• d.The cost of maintaining, repairing and insuring the building's common parts and structure✓

Service charges fund the upkeep of the building and shared areas - repairs, buildings insurance, cleaning, lifts and management. They can vary year to year, and leaseholders have statutory protections, for example a right to challenge unreasonable charges at the First-tier Tribunal.

A lender is often reluctant to lend on a leasehold flat where the unexpired lease term is short (for example under about 70-80 years) because:

• a.The flat automatically reverts to the Crown
• b.The value of a short lease falls, extending it becomes more expensive once it drops below 80 years (marriage value), and it weakens the security✓
• c.Short leases cannot be registered
• d.Ground rent is always illegal on any lease with an unexpired term of under eighty years, so the lease is automatically void

As a lease shortens, the flat becomes harder to sell and worth less, and once the unexpired term falls below 80 years 'marriage value' makes extending the lease more costly. Lenders therefore often require a minimum unexpired term (commonly the term plus a margin) as a condition of lending.

Qualifying long-leaseholders of flats have a statutory right to:

• a.Evict the freeholder
• b.Convert the flat from leasehold to freehold overnight without any cost, simply by notifying the freeholder in writing
• c.Refuse to pay any service charge ever
• d.Extend their lease (and, collectively, to buy the freehold through enfranchisement) on statutory terms✓

Leasehold reform legislation gives qualifying leaseholders the right to a lease extension and, collectively, the right to buy the freehold of their block (collective enfranchisement) or take over its management. These rights are exercised on statutory terms, usually with a premium payable.

The register of title kept by HM Land Registry, showing ownership and interests in most land in England and Wales, is maintained under the:

• a.Bribery Act 2010
• b.Consumer Credit Act 1974
• c.Data Protection Act 2018
• d.Land Registration Act 2002✓

The Land Registration Act 2002 governs registered land in England and Wales. HM Land Registry maintains a register for each title, comprising the property register, the proprietorship register and the charges register. Registration provides state-backed evidence of ownership.

Where land is still 'unregistered', first registration at HM Land Registry becomes compulsory when a triggering event occurs, such as:

• a.A sale of the freehold, or the grant of a first legal mortgage✓
• b.Painting the front door
• c.Paying the annual ground rent
• d.Renewing the buildings insurance policy on the property, or changing the lender named on an existing registered charge

Certain 'triggering' events force first registration of previously unregistered land - notably a sale/transfer of the freehold, the grant of certain leases, and the creation of a first legal mortgage. Over time this brings almost all land onto the register.

The part of the HM Land Registry title that records mortgages and other financial burdens over the property is the:

• a.Charges register✓
• b.Property register
• c.Proprietorship register
• d.Title plan only

A registered title has three parts: the property register (describes the land and rights benefiting it), the proprietorship register (names the owner and class of title) and the charges register (records burdens such as mortgages, restrictive covenants and rights over the land).

For a lender's mortgage over registered land to take effect as a legal charge and bind third parties, the lender should:

• a.Simply take the title deeds and do nothing else
• b.Register the charge at HM Land Registry✓
• c.Notify the local council only
• d.Keep the mortgage deed secret

A mortgage of registered land is created as a legal charge and must be completed by registration at HM Land Registry to operate at law and gain priority against later interests. Registration also records the lender in the charges register of the title.

Where a property already has a first and a second registered charge, the order in which the lenders will be repaid from sale proceeds is generally determined by:

• a.The borrower's preference
• b.The order of priority of the charges (the first charge ranking ahead of the second)✓
• c.Which of the two lenders has the largest branch network and the greatest number of existing mortgage customers nationally
• d.The size of each loan

Charges rank in order of priority, normally by date of registration, so the first charge is repaid in full before the second. A first-charge lender may need to consent to a later charge, and 'tacking' rules govern when further advances keep first-charge priority.

On the sale of a registered freehold property, legal ownership is transferred from seller to buyer using a deed known as a:

• a.Standard security
• b.Transfer (Land Registry form TR1)✓
• c.Statement of Responsibilities
• d.European Standardised Information Sheet

In England and Wales, registered land is transferred by a deed of transfer, commonly Land Registry form TR1, which the parties execute and which is then registered to record the new owner. (A standard security is the Scottish equivalent of a mortgage, not a transfer of ownership.)

In a typical conveyancing transaction in England and Wales, the point at which the buyer and seller become legally bound to complete the purchase is:

• a.When the mortgage is fully repaid
• b.Exchange of contracts✓
• c.When the removal van arrives
• d.When the buyer first views the property

Before exchange of contracts either party can generally withdraw without penalty. On exchange, the contract becomes binding, the deposit is paid and a completion date is fixed; a party who then fails to complete may forfeit the deposit or face a claim. Completion is when the balance is paid and ownership passes.

'Completion' of a residential purchase in England and Wales refers to the point when:

• a.The balance of the purchase price is paid and the buyer becomes entitled to the property✓
• b.The survey is carried out
• c.The estate agent is instructed
• d.The buyer's offer is accepted by the seller, at which point the property is taken off the market and reserved for the buyer

Completion is when the remaining purchase money is transferred, the transfer deed takes effect and the buyer becomes entitled to occupy. The buyer's solicitor then deals with paying any Stamp Duty Land Tax and registering the buyer (and the lender's charge) at HM Land Registry.

Two people own a property as beneficial 'tenants in common'. On the death of one owner, that owner's share:

• a.Passes under that owner's will (or the intestacy rules) as a distinct share✓
• b.Is sold by the lender
• c.Passes automatically to the survivor
• d.Is cancelled entirely and the share reverts to the freeholder, who may then re-let that share to another occupier

Under a tenancy in common each co-owner has a separate, defined share that does not pass by survivorship; instead it passes under the deceased's will or the intestacy rules. This differs from a joint tenancy, where survivorship applies. Couples wanting to leave their share to others (for example children from an earlier relationship) often choose tenancy in common.

Co-owners who currently hold as beneficial joint tenants can convert their ownership into a tenancy in common by:

• a.Serving a written notice of severance✓
• b.Repaying the mortgage
• c.Notifying the local authority only
• d.Selling to a company

A joint tenancy can be 'severed' - for example by one owner serving a written notice of severance on the other - turning the ownership into a tenancy in common with distinct shares. Severance is often done for inheritance-tax or family-protection reasons, or on relationship breakdown.

Where two or more people co-own land in England and Wales, the legal estate is held by them on a:

• a.Trust of land, with the co-owners as trustees✓
• b.Leasehold reversion
• c.Standard security
• d.A commonhold association that owns the freehold of the whole building on behalf of all of the individual unit-holders

Co-ownership takes effect behind a trust of land (under the Trusts of Land and Appointment of Trustees Act 1996). The legal title is held by the trustees (up to four) as joint tenants, while the beneficial interests may be held as joint tenants or tenants in common.

The legal estate in co-owned land can be held by a maximum of:

• a.An unlimited number of trustees
• b.One person only
• c.Four trustees✓
• d.Two people only

The legal title to co-owned land can be vested in a maximum of four persons, who hold as trustees (as joint tenants of the legal estate). If more than four are named as owners, the first four named who are able and willing hold the legal estate on trust for all the beneficial owners.

A buyer purchasing from co-owners can take the property free of the sellers' beneficial interests ('overreaching' them) provided the purchase money is paid to:

• a.The mortgage lender, who then holds the beneficiaries' interests on trust until the property is eventually sold on
• b.The estate agent
• c.One trustee only
• d.At least two trustees (or a trust corporation)✓

Overreaching allows a buyer to take free of beneficial interests under a trust of land where the capital money is paid to at least two trustees (or a trust corporation). The beneficiaries' interests then attach to the sale proceeds instead of the land, protecting the buyer and lender.

In registered land, the interest of a person in actual occupation of the property may bind a lender even without being noted on the register. Such an interest is an example of:

• a.A standard security
• b.A ground rent
• c.An overriding interest✓
• d.A restrictive covenant

Certain interests 'override' the register and can bind a purchaser or lender even though not registered - notably the rights of a person in actual occupation. The leading case Williams & Glyn's Bank v Boland established that an occupying spouse's beneficial interest could bind a lender, which is why lenders obtain consent forms from adult occupiers.

To prevent an adult occupier's rights taking priority over its mortgage, a lender will typically require the occupier to:

• a.Move out permanently
• b.Pay the deposit
• c.Take out a life-insurance policy in the lender's favour covering the whole of the outstanding balance for the full term
• d.Sign a consent/waiver form agreeing their interest is postponed to the lender's charge✓

Lenders ask non-owning adult occupiers to sign a consent form (deed of postponement/waiver) confirming they agree to their interest ranking behind the mortgage. This addresses the risk highlighted in Boland that an occupier's overriding interest could otherwise defeat the lender's security.

Where one person is asked to give a mortgage over the family home to secure another's business borrowing, the lender should ensure the surety receives independent legal advice, following the guidance in:

• a.Williams & Glyn's Bank v Boland
• b.Royal Bank of Scotland v Etridge (No 2)✓
• c.The Land Registration Act 2002
• d.The Bribery Act 2010

In RBS v Etridge (No 2) the House of Lords set out steps a lender should take where there is a risk of undue influence over a surety (for example a spouse guaranteeing a partner's business debts). The surety should be advised to take independent legal advice, protecting the lender's security from later challenge.

Where a borrower of an owner-occupied home falls seriously into arrears, a lender wishing to take possession of the property normally must:

• a.Change the locks without notice
• b.Ask the local council to remove the borrower
• c.Obtain a court order for possession (except in limited circumstances)✓
• d.Instruct an estate agent to change the locks and remove the borrower's belongings once two payments have been missed

For a residential owner-occupied property, a lender generally cannot simply take possession; it must obtain a court possession order. The Administration of Justice Acts and the pre-action protocol for mortgage arrears govern the process, and MCOB requires repossession to be a last resort.

Under section 36 of the Administration of Justice Act 1970, a court hearing a possession claim on a dwelling has power to:

• a.Increase the interest rate
• b.Order the borrower to be imprisoned
• c.Adjourn, stay, suspend or postpone possession where the borrower is likely to be able to pay the arrears within a reasonable period✓
• d.Transfer the freehold of the property to the lender immediately so that the lender can sell it without any further hearing

Section 36 of the Administration of Justice Act 1970 (as extended by the 1973 Act) gives the court discretion to give the borrower time - by adjourning or suspending a possession order - where it is likely the borrower can pay the arrears within a reasonable period, which the courts often take as the remaining mortgage term.

Before starting court action for possession because of mortgage arrears, a lender is expected to follow the:

• a.Pre-action protocol for possession claims based on mortgage arrears✓
• b.Standard security process
• c.Bribery Act procedures
• d.Provide the borrower with a fresh European Standardised Information Sheet setting out the revised cost of the arrears

The court's pre-action protocol for mortgage-arrears possession claims requires lenders to try to resolve arrears before litigating - for example discussing the causes, considering forbearance options and treating court action as a last resort. This complements MCOB 13's fair-treatment rules.

A lender's fundamental remedy allowing it to sell the mortgaged property to recover the debt, without transferring ownership to itself, is the:

• a.Right to buy
• b.Power of sale under section 101 of the Law of Property Act 1925✓
• c.The right of survivorship, under which the lender automatically becomes the owner of the property on the borrower's default
• d.Equity of redemption

The Law of Property Act 1925 s.101 gives a mortgagee, once the mortgage is made by deed, an implied power of sale. On exercising it (in accordance with s.103 conditions) the lender can sell to a third party and use the proceeds to clear the debt, accounting to the borrower for any surplus.

Under section 103 of the Law of Property Act 1925, a lender's power of sale becomes exercisable in circumstances such as where:

• a.The borrower asks a question about the loan or requests a copy of the mortgage statement showing the outstanding balance
• b.Mortgage interest is at least two months in arrears, or there is a breach of another provision after due notice✓
• c.The lender simply wishes to sell
• d.House prices have risen

Section 103 sets conditions before the power of sale can properly be exercised - for example where interest is at least two months in arrears, or the borrower has breached another mortgage term and not remedied it after notice. This protects borrowers from premature sale.

When a lender sells a repossessed property under its power of sale, it owes the borrower a duty to:

• a.Take reasonable care to obtain the true market value (a proper price) for the property✓
• b.Sell only to another lender
• c.Sell at the lowest possible price so long as the sale is quick, keeping any surplus above the debt for the lender itself
• d.Keep any surplus for itself

A selling mortgagee must act in good faith and take reasonable care to obtain the true market value (a proper price) at the date of sale. After discharging the debt, costs and any prior/subsequent charges, it must account to the borrower for any surplus; the borrower remains liable for any shortfall.

For a buy-to-let (investment) property in default, a lender will often appoint a receiver to collect the rents and manage or sell the property. This 'LPA receiver' is appointed under:

• a.Sections 101 and 109 of the Law of Property Act 1925✓
• b.The Consumer Credit Act 1974
• c.The Bribery Act 2010
• d.The Land Registration Act 2002, under which the receiver is appointed by the court to manage the tenanted property

A Law of Property Act (LPA) receiver is appointed under ss.101 and 109 of the Law of Property Act 1925. Importantly the receiver acts as the borrower's agent, collecting rent and dealing with the property, which is especially useful for tenanted buy-to-let cases where possession of the borrower's home is not the issue.

'Foreclosure' as a mortgage remedy is:

• a.The process of extending a lease
• b.A remedy that gives any surplus straight to the borrower after the lender has sold the property on the open market
• c.The same as a standard power-of-sale repossession
• d.A rare remedy, requiring a court order, that extinguishes the borrower's equity and vests the property in the lender✓

Foreclosure is a drastic and now very rare remedy: it requires a court order and, if completed, transfers the property to the lender and wipes out the borrower's equity - even any value above the debt. In practice lenders use the power of sale instead, because they must account for any surplus.

The borrower's right to redeem (repay) the mortgage and recover the property free of the charge, which cannot be unfairly restricted, is known as the:

• a.Power of sale
• b.Overriding interest
• c.Equity of redemption✓
• d.Right of survivorship

The equity of redemption is the borrower's right to repay the debt and free the property from the mortgage. Equity will not permit 'clogs or fetters' on this right - unfair terms preventing redemption - reflecting the maxim 'once a mortgage, always a mortgage'.

Under the Land Registration Act 2002, a squatter seeking title to registered land by adverse possession faces a tougher regime than for unregistered land because:

• a.Only the Crown can claim adverse possession
• b.After 10 years the squatter may apply, but the registered owner is notified and can usually object to defeat the claim✓
• c.The squatter automatically gains title after one month
• d.Adverse possession of registered land is now completely impossible, because the register is conclusive proof of ownership

For registered land, the LRA 2002 lets a squatter apply after 10 years' adverse possession, but the registered proprietor is notified and can object, in which case the application is normally refused (with limited exceptions). This is much harder than the old 12-year rule (Limitation Act 1980) that still broadly applies to unregistered land.

A right allowing the owner of one property to cross a neighbour's land to reach a road is an example of:

• a.A tenancy in common
• b.A restrictive covenant
• c.A ground rent
• d.An easement✓

An easement is a right benefiting one piece of land (the dominant land) over neighbouring land (the servient land), such as a right of way or a right of drainage. Easements bind successors and can affect value and use, so conveyancers check for them.

A term in the title preventing the owner from building on part of the garden, or from running a business from the property, is an example of a:

• a.Easement
• b.Ground rent
• c.Restrictive covenant✓
• d.Standard security

A restrictive covenant is an obligation restricting how land may be used or developed - for example prohibiting building, trade or alterations. It can bind future owners and appears in the charges register, so it may affect a property's use, value and mortgageability.

In Scotland, the security a lender takes over residential property (the equivalent of an English mortgage) is called a:

• a.Legal charge
• b.Standard security✓
• c.Restrictive covenant
• d.TR1 transfer

Scottish land law differs from England and Wales. A lender's security over Scottish heritable property is a 'standard security' (under the Conveyancing and Feudal Reform (Scotland) Act 1970), not a legal charge. Advisers dealing with Scottish property must be aware of these differences.

In a Scottish property purchase, the contract between buyer and seller is concluded through the exchange of formal letters known as the:

• a.TR1
• b.Charges register
• c.Missives✓
• d.European Standardised Information Sheet

In Scotland the parties' solicitors negotiate and conclude the contract by exchanging formal letters called 'missives'. Once the missives are concluded the contract is binding - unlike England and Wales, where the binding point is exchange of contracts. Ownership then transfers by a 'disposition'.

Ownership of land in Scotland is recorded by:

• a.The Financial Conduct Authority, which maintains a central register of every property purchased with a regulated mortgage
• b.Registers of Scotland (the Land Register of Scotland)✓
• c.The local sheriff court
• d.HM Land Registry

Scottish land is registered with Registers of Scotland, principally in the Land Register of Scotland (which is replacing the older Register of Sasines). This is a separate system from HM Land Registry, which covers England and Wales.

A mortgage adviser dealing with property across the UK should remember that:

• a.Land law does not apply in Northern Ireland
• b.Only English law applies everywhere
• c.Scotland and Northern Ireland have distinct property law and conveyancing systems from England and Wales✓
• d.The law of property is identical throughout the whole of the United Kingdom, so a single conveyancing process applies everywhere

Property and conveyancing law differs between the UK jurisdictions: England and Wales share a system, while Scotland and Northern Ireland each have their own distinct law, terminology and land registers. FCA conduct regulation of mortgages, however, applies across the UK.

A buyer of an older property who wants a thorough report on its condition, including advice on defects and repairs, should commission a:

• a.RICS Home Survey Level 3 (full building/structural survey)✓
• b.Basic mortgage valuation
• c.A local authority search only, which will reveal any structural defects together with the planning history of the property
• d.Land Registry title plan

A RICS Home Survey Level 3 (building survey) is the most detailed inspection, suitable for older, larger or unusual properties, giving in-depth information on condition, defects and repairs. Level 1 and Level 2 (HomeBuyer) surveys are less detailed, and a lender's mortgage valuation is not a condition survey at all.

A buyer relies solely on the lender's basic mortgage valuation and later discovers serious hidden defects. The likely position is that:

• a.The lender must pay for all repairs
• b.The valuation was for the lender's security purposes and is not a substitute for the buyer's own survey, so the buyer generally bears the risk of undiscovered defects✓
• c.The seller must automatically refund the whole purchase price to the buyer because the mortgage valuation missed the defects
• d.HM Land Registry compensates the buyer

A mortgage valuation is a limited inspection carried out for the lender to confirm adequate security, not a detailed condition report. A prudent buyer should obtain their own survey (Level 2 or 3); relying only on the mortgage valuation means the buyer usually bears the risk of defects it would not reveal.

'Negative equity' describes the situation where:

• a.The outstanding mortgage balance is greater than the current market value of the property✓
• b.The borrower has no mortgage at all
• c.The property is worth considerably more than the outstanding mortgage, giving the borrower a large amount of usable equity
• d.The lender owes the borrower money

Negative equity arises when the amount owed on the mortgage exceeds the property's value, typically after house-price falls. It can make selling or remortgaging difficult, because the sale proceeds would not clear the debt, leaving a shortfall for which the borrower remains liable.

The 'loan-to-value' (LTV) ratio of a mortgage expresses:

• a.The service charge compared with the ground rent
• b.The borrower's total annual income compared with the size of the loan they have applied to the lender to borrow
• c.The interest rate compared with the Bank Rate
• d.The loan amount as a percentage of the property's value or purchase price✓

LTV is the loan as a percentage of the lower of the property's value or purchase price - so a £160,000 loan on a £200,000 property is 80% LTV. A higher LTV means less borrower equity and more lender risk, so higher-LTV deals usually carry higher interest rates.

'Gazumping' occurs where:

• a.A lender withdraws a mortgage offer
• b.A buyer who reduces their offer just before completion, forcing the seller to accept a lower price or lose the sale entirely
• c.A seller accepts a higher offer from another buyer before contracts are exchanged, despite having already accepted a lower offer✓
• d.A seller lowers the price after exchange

Gazumping is where a seller, before contracts are exchanged, accepts a higher offer from a new buyer and drops the original buyer. Because in England and Wales nothing is legally binding before exchange, the disappointed buyer usually has no remedy and may lose survey and legal costs.

'Gazundering' refers to a buyer who:

• a.Extends the lease before completion
• b.Reduces their offer at the last minute, typically just before exchange, pressuring the seller to accept less✓
• c.Offers considerably more than the asking price in order to gazump a rival buyer who has already had an offer accepted
• d.Pays the full deposit early

Gazundering is the reverse of gazumping: the buyer lowers their offer shortly before exchange, exploiting the seller's weak position (for example where the seller is in a chain). As with gazumping, it is possible because there is no binding contract before exchange in England and Wales.

During conveyancing, a 'local authority search' is carried out mainly to reveal:

• a.The seller's outstanding mortgage balance and the amount of equity they hold in the property they are trying to sell
• b.Matters such as planning history, road schemes, and whether the property is in a conservation area or subject to enforcement notices✓
• c.The borrower's credit score
• d.The lender's interest rate

A local authority (local land charges) search reveals information held by the council - planning permissions and conditions, building regulation matters, nearby road proposals, conservation-area status and enforcement notices. It helps the buyer and lender understand issues affecting the property.

An 'environmental search' during conveyancing is designed to identify risks such as:

• a.The estate agent's commission
• b.The lender's profit margin
• c.Contaminated land, flood risk or former industrial use affecting the property✓
• d.The seller's employment history and salary details, which the lender uses to confirm that the sale price is realistic

An environmental search flags risks such as land contamination, flooding, subsidence or proximity to landfill/former industrial sites. These can affect value, insurability and mortgageability, so lenders and buyers use the search to assess and, if necessary, act on such risks.

A tax charged on the purchase of property, which differs between the UK nations, applies in England and Northern Ireland as:

• a.Land Transaction Tax
• b.Land and Buildings Transaction Tax
• c.Council Tax
• d.Stamp Duty Land Tax (SDLT)✓

Purchase taxes are devolved: England and Northern Ireland charge Stamp Duty Land Tax (SDLT), Scotland charges Land and Buildings Transaction Tax (LBTT) and Wales charges Land Transaction Tax (LTT). Rates and thresholds change over time, so current figures must always be checked.

Buyers of an additional residential property (such as a second home or a buy-to-let, on top of a main home) typically face:

• a.An automatic exemption from stamp duty
• b.A higher-rate surcharge on the property purchase tax (for example on SDLT)✓
• c.A reduced rate of purchase tax that is lower than the rate paid by ordinary first-time buyers on their only home
• d.No purchase tax at all

Purchasers of additional dwellings usually pay a surcharge on top of the standard purchase-tax rates (for example the higher rates of SDLT in England and Northern Ireland). The exact surcharge percentage and thresholds change from time to time and should be verified against current rules.

First-time buyers in England and Northern Ireland may benefit from:

• a.Free buildings insurance from HMRC
• b.A guaranteed interest rate for life
• c.First-time buyer relief reducing or removing SDLT up to specified thresholds✓
• d.An automatic ban on paying any deposit at all, so that first-time buyers can borrow the entire purchase price of the home

First-time buyers can qualify for SDLT relief that reduces or removes the tax up to specified purchase-price limits. Because these thresholds and the qualifying conditions change over time, advisers should confirm the current rules and refer clients to appropriate tax guidance.