fbpx

Don’t rush buy-to-let

Ryan Bembridge

February 19, 2016

Titlesolv chief executive Chris Taylor has warned lenders and conveyancers to properly do their homework on buy-to-let cases pushed through before 1 April.

Transactions are expected to surge in the run up to the deadline as landlords try to avoid the 3% stamp duty surcharge coming into force.

Taylor reckoned lenders will simplify procedures to cope with increased demand.

However he warned that in the processthey could put themselves at risk of fraud, duress and solicitor negligence.

He said: “George Osborne’s attempts to cool the buy-to-let market will inevitably cause a significant upsurge in transactions at the 11th hour, as investors attempt to shield themselves from extra stamp duty costs.

“The timing pressures of such a windfall of buy-to-let transactions leave significant margins for error. Transactions such as these tend to inherently carry more risk as the properties involved are typically not owner-occupied, meaning there is little evidence to discount contentious issues on title.

“The titles to such properties can also change hands quite frequently, often resulting in insufficient evidence to support a defence of prescriptive rights on some title defects, as just one example.”

He added: “Lenders are likely to be abridging their procedures in anticipation of floodgate scenarios such as the one caused by the Chancellor.

“In this context, careful consideration must be given to have the right risk management strategies and tools in place.

“Doing so will not only save cost and speed up transactions, but also provide a guarantee against undiscoverable risks such as fraud, duress and solicitor negligence.”

Typical buy-to-let let landlords making a purchase of an £184,000 property will have to find an extra £5,520 after April.


Sign up to our daily email