| \n \n \nThe Queen’s Speech contains a number of pointers towards legislation that could impact borrowers and lenders. Theresa May first mooted ending the ability to gain possession (this is the main basis of the AST) in 2019. The existence of an AST can significantly reduce the market value of a house or flat, and frequently, as receivers, we need to gain possession to avoid a shortfall. \nWe frequently see lending valuations that give a notional vacant possession value or a 90-day value based on vacant possession, which a lender has relied on to assess how much to lend. In practice, it almost always takes far longer than 90 days to gain possession, during which time default interest can be accruing. \nThe speech also suggests imposing minimum standards on privately let housing and a social housing regulator with powers to inspect, issue fines and demand emergency repairs. When we are appointed as receivers, we frequently inherit long-standing defects that the borrower has been prepared to risk. As receivers, we cannot countenance given that the eventual cost will fall back on the lender. \n | \n
Advice
\n| \n \n \nOur view is that lenders need to be far more careful in assessing loan to value ratios and keep tabs on the condition of the property during the course of the loan. \n | \n