According to the property recovery specialist company, Property Portfolio Rescue (PPR), some mortgage lenders have been withdrawing their written mortgage offers just before the exchange of contract.
PPR has reportedly claimed that these lenders are approving the mortgage applications in an effort to increase the number of mortgage approvals, however, they are then only processing the applications with a relatively large deposit or equity value.
The director at PPR, Nick Hopkinson, stated that there was a ‘significant minority’ of mortgage offers that are being withdrawn at the stage just before contract exchange. Reasons cited were refusal of tax returns from the borrower’s accountant, stating originals were required from the tax office or withdrawal of the mortgage offer due to a one-off missed credit card payment showing up on the credit check.
This sort of problem means that in order to prevent a chain falling apart, many sellers then have to further reduce their property price.
Figures from RICS (Royal Institute of Chartered Surveyors) released this week showed that the number of new buyer enquiries has increased for the seventh consecutive month, yet instructions to sell property have declined in May.
Whether or not this claim is true, the released figures will be unable to hide the overall picture in the coming months.
