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Conveyancers warn sales could collapse under MMR stress

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  • 24/04/2014
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Conveyancers warn sales could collapse under MMR stress
Conveyancers must be aware of changes under the Mortgage Market Review, formally launching on Saturday, or risk transactions falling through, warned the Conveyancing Association.

The new rules could cause delays to the home-buying process and in some cases may even cause an increase in the number of transactions falling through.

Kathryn Taylor, managing partner at Gordon Brown Law Firm, said that due to a more cautious lending attitude and stringent affordability checks the approval process could take longer with more applications declined along the way.

With this in mind vendors may be less inclined to accept an offer from someone interested in their property until they have proof that the mortgage has been approved.

“This may mean we see an increase in the number of transactions falling through at initial stages,” she said.

“But in the long term the risk of offers being withdrawn should hopefully decrease with in-depth assessments being carried out from the outset.”

Conveyancers need to be mindful that offers may get withdrawn between the exchange and completion period if there has been a material change as the new rules are used to re-assess the applicant.

Taylor said there is a risk that a reassessment could cause considerable delays while the lender collates the affordability information.

She added: “If the client is under contract this could result in completion dates being missed.”

This may mean that more conveyancers choose to exchange and complete on the same day in order to avoid the risk of this happening.

 

 

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