As industry braces for a buy-to-let surge, beware the risks of rushing
With implementation of additional stamp duty approaching, leading property risk management expert urges risk management diligence
Mortgage lenders and conveyancers alike across the UK are bracing themselves for an expected surge in buy-to-let property transactions, stemming from the additional stamp duty coming into force from 1st April.
According to figures obtained by the BBC, the measures mean that for the average buy-to-let purchase of £184,000, an extra £5,520 will have to be paid to the Treasury from April 2016 for additional buy-to-let property purchases.
In the rush to complete what is expected to be an onslaught of transactions, careful attention must be paid by both lenders and conveyancers to ensure the management of any associated risks, according to a leading property risk expert.
Chris Taylor, Chief Executive of Titlesolv, comments:
“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.
“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.”
This article was submitted to be published by Titlesolv as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.