The Intermediary – February 2025 - Flipbook - Page 23
RESIDENTIAL
Opinion
property purchase changes – and us
as brokers having to change lenders
– we oen see solicitors no longer
being on panel. Therefore, potential
abortive fees become evident for a
client with their initial solicitor.
Also, additional lender fees become
payable, such as application fees or for
valuation surveys.
In addition to potentially hurting a
client's pocket, we can sometimes see
even more serious implications. To
proceed with a lender application, as
we know, there's a hard search carried
out. Clients, especially at a high loanto-value (LTV) where internal lender
scoring is stringent, run the risk of
being denied at application stage due
to too many hard searches in quick
succession reducing their credit score.
We have seen it before – a case is
agreed at decision in principle (DIP)
stage, but then it declines at full
application just a couple of days aer.
Taking on the stress and upheaval
of changing properties, starting legal
processes again, and dealing with an
ultimately exceptionally draining
process is hard to swallow.
In a time of so much economic
uncertainty, too, the risk of pulling
out of a purchase perhaps a few
months into the process and starting
again, can sometimes be more of a
shock than initially thought.
We've seen a lot of changes over
the years – Stamp Duty increases, job
uncertainty, cost-of-living increases,
and so on. So, buyers must be educated
of the wider risks when making a
redirection decision during their
purchase journey.
Risks and results
As advisers, now more than ever, it's
very important to have a discussion
with clients from the outset about the
risks of pulling out of a purchase and
moving onto another.
If it's the right thing for the client
and their family, then absolutely
they should do it, but like anything,
it isn't always plain sailing, and that
needs to be highlighted – and with
the more vulnerable first-time buyer
clients, it needs to be explained clearly
and concisely.
If it's a change of property due to a
light, superficial reason – 'next door
came to market and it has a porcelain
sink rather than a stainless steel
one, but everything else is the same'
– then the client needs a bit more of
a talking to!
What could lenders do differently
to cater for the 'buyer’s market'?
Maybe get rid of the need for complete
application rekeys!
If we were able to amend an
application from a 'green' new-build
product to a standard product with a
change in LTV, then it'd make it a lile
easier for the client.
Granted, there's a need for new
hard searches, documents and so on
– and rightly so, advice changes – but
JONATHAN FOWLER
is founder and managing
director at Fowler Smith
Mortgages & Protection
more fluidity from lenders regarding
application amendments would make
the process less harsh on clients, and
also more seamless for brokers, too,
assuming it makes sense to remain
with the same lender.
On the whole, buyers having
plentiful choice is both a blessing and
a curse. As long as rates head the right
way, and market confidence continues
to build, then this will likely change
naturally in the standard property
cycle, as we eventually head towards
more of a 'seller’s market'.
Who knows, we might even
find ourselves in a well-balanced
market, for once! ●
