A property being sold in England and Wales usually means that its value has been ascertained and that the seller is willing and able to sell the property.

An Estate Agent usually is the best party to advertise the property to the open market. Often, it is more cost-effective to appoint one, as they offer increase in scope, marketability, and speed of sale. The uplift in price achieved could inherently pay for the commission they charge outright.

Why Property Marketability Matters

A key consideration for a property being placed on the market is whether the property has a good and marketable condition of sale.

It may be obvious as to some points affecting the marketability of a property, such as the absence of central heating, cooking equipment or access to services such as electricity and water.

However, there may be other points of interest that would affect marketability of a property from a legal perspective.

This is because most properties in England and Wales have been constructed over decades, sometimes hundreds of years and the requirements for their original conveyances differ from our modern standards.

There isn’t a ‘one size fits all’ solution to resolving these issues and therefore it may be prudent for any would-be seller to seek legal advice prior to marketing, so that they are not hindered with hefty legal fees down the line when these issues come to light following the discovery phase of any conveyancing transaction.

If there are legal issues, it will affect the marketability in many ways, but often, the main being the impact on any potential lender backing proposed by mainstream lenders.

Mortgage Buyers vs. Cash Buyers: What Sellers Should Know

Mortgage backed buyers and cash backed buyers are the two main pools when it comes to marketing a property.

Being able to market your property to a mortgage backed buyer will ultimately mean that you can market to a cash-buyer also.

The increase in the number of potential buyers will mean ultimately an increase in potential demand, and if all else remains equal, a greater sale price by virtue of a larger demand.

It is often correct with cash-buyers that you are not immediately subject to a lender’s list of requirements (some 57 pages in length for some) and therefore, it can lead to a quicker sale.

However, this is not always correct. This being that when the property is sold, that buyer will have the same problem as the original seller when they come to sell down the line, in that they will only be able to market to cash-buyers only, unless the legal issues are resolved.

This can ultimately affect the value of the property because the number of cash-buyers is lower when compared to that of the mortgage-backed buyer pool. Therefore, given the above, ultimately it will mean a lesser sale price by reason of i) availability of an appropriate buyer and ii) the barrier to entry of being able to put up enough capital to purchase the property.

Therefore even if there isn’t a lender involved in the transaction, they still indirectly affect what is undertaken during the conveyancing in an effort to protect the value of the property for the new owner.

Mortgage Lenders and Their Influence on the Market

The lenders in the market therefore have a large degree of power over deciphering what is and isn’t an issue to be followed up on.

The Grenfell Tower Disaster in 2017 sent the UK high rise property market into a spiral whereby large developments became unmortgageable overnight whilst lenders determined how they would navigate the same.

Ultimately, EWS1 certificates were adopted prior to the introduction of the Building Safety Act 2022 to an extent. But you can see one example where the lenders hold the power within the market to determine the direction of requirements and ultimately impact the value of a property.

The same is true for a number of other issues, and often one of the first points of call for any change to the UK Housing market legislation is the consultation of the UK Financial Institution.

Mortgage Lender Requirements

As seen above, the main requirement of any lender is protecting their investment (their security) in the property.

Any subsequent determination or legal requirement by a lender always comes back to protecting as best as they are able to do so their security over the property.

If you plan on altering your property, or whether the absence of some documentation may ultimately lead to the lender taking issue; asking yourself the question as to whether said act could impact the value of the property is the best way to determine whether it is relevant.

The bank make their business through a long term investment into a security address and should that investment not be repayable, then from the their point of view they may look to take action against the mortgagor, repossess the property or not lend in the first place.

If the lender cannot ensure that the mortgage term can be met and the loan is repaid, then in most instances they will not lend over the property.

There are various other non “high-street” lenders that may take a difference stance over the specifics of any issue. But usually the interest rates, additional fees and additional conditions attached to their products are a large deterrent for most. Even if you’re looking from the point of view as a seller, the existence of these “boutique lenders” does not necessarily adjust the market equilibrium to any property that has legal issues associated with it.

Conclusion

Your property will be possibly the largest monetary asset you will own during your lifetime and mortgage lenders help facilitate the acquisition of them so long as their investment can be protected over the mortgage term.

The conveyancing process can be long and expensive and it may be advisable to obtain pre-market legal advice to ascertain whether anything could arise during your transaction that can i) hinder marketability and ii) lead to sale abortive fees that could have otherwise have been avoided.

At John Hodge Solicitors, we can help with title rectification problems that may hinder any future sale of your assets.

Next Steps: Get in touch

If you would like to discuss your Conveyancing matter then please don’t hesitate to reach out to our team of legal experts at John Hodge Solicitors, conveniently located throughout the South West, with offices in Bridgwater, Bristol, Clevedon, Wedmore, Weston-super-Mare and Yatton.

You can contact us either:

• by email
• via our website
• by calling us on 0800 097 8611