A mortgage lender says it will now accept ‘no-search indemnity insurance’ for residential purchases in a bid to speed up the current transaction process logjam.
Foundation Home Loans - an intermediary-only lender - says conveyancing solicitors can place the insurance policy on risk at completion in lieu of local authority and or other searches.
In a statement, the lender says: "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.”
Earlier this week a trade body called on Housing Secretary Robert Jenrick to intervene over the growing problem of delays in councils providing search information to buyers and conveyancers.
The Council of Property Search Organisations (CoPSO) says more than 35 per cent of local authorities are now taking more than 20 working days to process search requests - and in many cases the delay is for 30 days “or significantly more.”
CoPSO claims that many of the delays - even before the latest lockdown - were down to insufficient central government resources being allocated to councils suffering staff shortages and slower working processes for staff advised not to go to offices.