New mortgage lending rules slowing property sale process

By Lauren Burns

A property purchase is taking up to 2 to 4 weeks longer as a result of tighter mortgage lending criteria, according to the Royal Institution of Chartered Surveyors (Rics).

The Mortgage Market Review was introduced in April of this year to ensure affordability when considering new mortgage applications. The new criteria include stress tests as to how the mortgage borrower could cope with interest rate increases, and also involve a closer look at their finances, including any possible changes to their family situation or job. It was understood that the new criteria would prevent some property purchasers who would previously have secured a mortgage from getting a loan, but Rics now say that the criteria is also slowing the house purchase process by 2 to 4 weeks.

Rics suggests that a delay in a formal mortgage offer being made by the Lender means the the legal purchase conveyancing process is delayed. The purchaser and seller will rarely go into contract on a property transaction until such time as the conveyancing solicitor has received a copy of the formal mortgage offer, and even if they did the purchase contract would have to be made conditional upon receipt of a mortgage offer. That means the purchaser could pull out of the contract if they were denied a mortgage.

If you are buying, selling or remortgaging a property in Northern Ireland, and want to speak to a conveyancing solicitor, contact Wilson Nesbitt in Belfast or Bangor by calling 0800 840 9290.