When purchasing a property with a mortgage, the mortgage lender will require you to instruct a conveyancing solicitor on their recognised panel, known as a Lender Panel. Some of the more well-known High-Street Lenders will sign up to a generic panel, such as Lender Exchange, whilst some lenders have a very specific set of requirements. A number of our clients come to us asking why we charge itemised fees for dealing with their mortgage lender and also trying to understand why being on this panel is so important. In this article, we ask one of our conveyancing solicitors about the relationship between the lender and conveyancer from their point of view and what factors they are considering when reviewing a property title.

My role in acting for a mortgage lender

When acting for a client reliant on mortgage funds for their purchase, I must act simultaneously for the lender and the client. In most cases the lender will hold a security over a large proportion of a property and in effect “own” the largest share of that property, until their loan is repaid by the borrower. In order to do this, the lender places reliance on me as the conveyancer to ensure that their security is maintained and ultimately their “investment” is returned either when the property is sold, or at the end of the term of their mortgage.

As mortgages are typically held over long periods of time, sometimes up to 25 to 30 years, a lenders security is a long term investment and so there is a lot of responsibility here on the conveyancer.

The requirements of each lender vary but speaking generally, the lender will require the solicitor to confirm that the property has a good and marketable title. Different factors can affect whether the property has a good title including:

• Existing Legal charges
• Restrictive covenants
• Planning restrictions
• Boundaries and any adverse possession claims
• Rights of way and legal easements
• Disputes or conflict with neighbouring property or freeholders
• Whether the seller has the legal right to sell the property
• The period of ownership of the property
• Search results
• Conflicts of interest in the transaction

In addition, and as seen more recently, changes in legislation can also affect what a mortgage lender is willing to lend upon. At the time of writing, recent changes in legislation that are having a big affect on property transaction and lending criteria include the Building Safety Act 2022 and the Leasehold Reform Act.

Another good example we have recently seen of changing mortgage lender requirements is during COVID-19 and the Stamp Duty Holidays seen around the same time. There was a huge delay in Search time frames, especially Local Authority Searches. The sheer volume of purchases meant a lot of searches were being ordered all at the same time especially in built up areas such as London and other major cities in the UK. When added together with COVID related closures of Local Council Offices and a number of cyberattacks on Local Council systems meant that we were seeing long delays in return of search results within the conveyancing world. Some people were waiting months on end for return of searches. As a result, we saw an increase in the number of Search Indemnity Policies being requested by clients. Mortgage lenders reacted by determining whether they would accept such indemnity policies or not. Whilst search time frames are now much shorter and back with “normal” ranges, this is still seen today with some lenders refusing to accept such policies and insisting on searches being returned before they will agree to proceed with a purchase.

Due to the sheer number of lenders, in order to help conveyancers navigate the different requirements of each lender, the UK Finance Handbook (formerly known as the Council for Mortgage Lender (CML) Handbook) was produced. This provides a comprehensive guide to requirements for each lender along with general guidance when acting on residential purchases.

It is also worth noting that lenders can also have different requirements depending on who the borrower is and what the mortgage product is. So for example, lenders can have different panels for individual purchasers and those purchasing in the name of a limited company. They also have different requirements with buy to let mortgages over residential mortgages.

What happens if an issue is found?

In the event a problem is found with the property you wish to purchase, with the lending criteria of the lender, or individual circumstances of the particular transaction, it is not necessarily a limiting factor. What happens here is that I, as your conveyancer, will need to report the issue to your chosen lender and give them the opportunity to consider matters on an individual basis. Before doing so, I will explain to you, my client, about what the issue is, why I need to report it and possible remedies to resolve the issue, if relevant. The lender will have the final say on whether they wish to proceed, or if they will proceed with any conditions.

If the lender decides not to proceed, you can approach other lenders, but it is worth doing so with full disclosure of any issues found as any issues will also need reporting to them in the same way. It is here that your mortgage broker may be useful as they can help with lender requirements and presenting information to prospective lenders.

Conclusion

Ultimately if you are reliant on mortgage funds for the purchase of your property, it is vitally important that your conveyancing solicitor can and does act for your mortgage lender in the most efficient and timely manner in order to ensure funds are released from the lender at the earliest opportunity and without any hiccups. At Express Conveyancing, we are on the panel for 99.4% of mortgage lender and so we are well placed to help with your transaction no matter who your lender is, or if it changes across the course of the transaction. Give our expert team a call today to see how we can help with your next purchase.