Conveyancing transactions in England and Wales got more complicated in 2015 as lenders more frequently introduced complex changes for conveyancers, a year-end review of The Council of Mortgage Lenders Handbook by Lexsure Ltd. shows.
The London-based software house helps solicitors better manage their firm’s risk via tools such as LENDERmonitor and COMPLETIONmonitor.
Even though the U.K. remains strong, mortgage lenders are being more cautious in their policies, regularly introducing changes that make it all the more important that solicitors are aware of particularly onerous terms that an individual lender may impose
According to Lexsure’s review, 75 % of CML lenders amended their Part II policies last year, with over 250 sections changed. Some of the more frequent changes focused on problematic properties such as flying freeholds, properties with absentee freeholders as well as properties with short leases. Of notable concern is that 12% of lenders changed their minimum unexpired lease term with many now requiring 85 years remaining from the date of the mortgage .
Claims by lenders continue to account for around a quarter of all claims against the profession and my conversations with professional indemnity insurers reveal real concerns that conveyancing claims are not set to fall away. The increased complexity and frequency of changes is only going to boost the possibility of claims.
The Handbook was introduced in July 1999 and was proclaimed as a welcome consolidation of lender requirements, yet instructions don't stand still; they are constantly changing.
Experienced conveyancers may take it for granted; some new conveyancers may not have studied the handbook carefully, both options are dangerous. Solicitors should not assume they know what the lender’s requirements are from one transaction to the next - they should always check.
A copy of Lexsure’s Annual Market Complexity Report can be purchased here.
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