An intermediary-only mortgage lender has confirmed they will now accept ‘no-search indemnity insurance’ for residential purchases in a bid to speed up the current transaction process logjam.
Foundation Home Loans says conveyancing solicitors can place the insurance policy on risk at completion in lieu of local authority and or other searches.
A statement from the lender said:
“Local authority searches normally are a critical part of the transaction. They give information on the land on which the property being mortgaged is built and the immediate surrounding area/location. Without these searches, the owner could be liable for future costs and legal challenges on matters, for example, such as public rights of way, planning permission and building control works including extensions, and in extreme cases could mean that the value of the property is affected negatively.
“Recently, local authorities have struggled to deliver the results of local authority searches due to the very high demand for local authority searches, driven by both staffing issues caused by Covid-19 lockdown and the flood of purchases being transacted prior to the stamp duty reduced rates deadline of March 31 2021.
“Some have been taking more than 40 days to produce the search results, which means the process of buying a property has become very lengthy for many buyers.
“We continue to simplify the mortgage process wherever possible, to support you in getting as many … clients as possible to completion before the March 31 stamp duty reduced rates deadline.”
More recently, The Council of Property Search Organisations (CoPSO) seeks intervention from central government on searches by writing to Robert Jenrick the Secretary of State at MHCLG asking for his intervention to address the growing issue of delays in the provision of searches to homebuyers and their conveyancers.
According to CoPSO data more than 35% of local authorities are taking more than 20 working days to process search requests and for many of these the delays are more than 30 working days, in some cases significantly more. It is apparent that these delays are now impacting on the progress of transactions and thus the problem requires immediate attention.
