SDKA is aiming to deliver cheaper and quicker residential buy-to-let (BTL) purchase completions by increasing the maximum loan size for its title indemnity insurance offering to £250k.
The policy provides cover for a range of standard title-related risks, including certain matters relating to searches and restrictive covenants, which in turn helps reduce legal administration and minimise avoidable delays between application, legal instruction and completion.
The lender’s comprehensive policy, up to a loan size of £250k, currently costs £392, while a standard search pack incorporating local search, drainage and water, environmental and chancel will typically range from £300 to £500.
However with additional searches commonly required the initial one-off policy cost is usually lower than the incremental outlays. For instance adding Lack of Planning costs £175, Lost Title Deeds and Absence of Easement at £145 each, Restrictive Covenants at £115 and Lack of Buildings Regulations at £60.
Time-to-cash is also a significant factor. In a typical transaction the local search takes on average two-to-six weeks, and using SDKA’s title indemnity insurance offering removes this requirement and can reduce any delay to zero.
SDKA soft launched Westcor’s Perfect Title Policy last summer with an initial £150k limit, allowing a phased approach for the lender to integrate the product into its processes, build operational experience and work closely with its legal partners to streamline the instruction-to-completion process.
The increased limit means more brokers and direct BTL borrowers can benefit from the increased title indemnity insurance.
Scot Tsang, Head of Operations and In-House Legal at SDKA, said: “When we introduced the policy we chose to start with a £150,000 limit so that we could properly understand the product, embed it within our processes and work closely with our legal partners to seamlessly implement.
“We have seen clear benefits from the approach, particularly in helping to reduce costs and unnecessary delays by simplifying the way title risks are dealt with during the legal process. Increasing the limit to £250,000 is a natural step and allows more of our residential BTL borrowers to benefit from the product.”
SDKA further stressed that use of the title indemnity insurance offering does not remove the requirement for appropriate legal due diligence. Legal enquiries will continue to be raised where necessary, but the policy is intended to help avoid delays caused by back-and-forth discussions over risks that can be appropriately insured.
