SDKA has raised the maximum loan size for its title indemnity insurance to £250k, aiming to speed up and cut the cost of residential buy-to-let (BTL) purchase completions.
The policy covers standard title-related risks, including certain matters relating to searches and restrictive covenants. SDKA says this reduces legal administration and avoidable delays between application, legal instruction and completion.
The lender's policy costs £392 for loans up to £250k. A standard search pack, covering local search, drainage and water, environmental and chancel searches, typically costs between £300 and £500.
Additional searches are commonly required on top, for example, lack of planning at £175, lost title deeds and absence of easement at £145 each, restrictive covenants at £115 and lack of building regulations at £60. SDKA says the one-off policy cost is usually lower than these incremental outlays.
Time matters too. A local search takes two to six weeks on average in a typical transaction, according to SDKA, which says its title indemnity insurance removes that requirement and can reduce any delay to zero.
SDKA soft-launched Westcor's Perfect Title Policy last summer with an initial £150k limit. The phased approach let the lender integrate the product into its processes, build operational experience and work with its legal partners to streamline the path from instruction to completion. The higher limit extends the product to more brokers and direct BTL borrowers.
"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," said Scot Tsang, head of operations and in-house legal at SDKA (pictured).
"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 stressed that using the title indemnity insurance does not remove the requirement for appropriate legal due diligence. Legal enquiries will continue where necessary, though the policy is intended to avoid delays caused by back-and-forth discussions over risks that can be appropriately insured.
