Is this another sign of the credit crunch?
During May Birmingham Midshires added a note to their mortgage book with the CML (Council of Mortgage Lenders)
5.1.1- Contact point if the seller has owned the property for less than 6 months.
Completions Team at office issuing mortgage instructions. See Offer for contact details.
NB We will not normally proceed on cases where the property is already owned by the borrower but for less than 6 months.
Applications which involve assignable contracts are not acceptable.
Assignable contracts, used heavily by some investors are no longer allowed by BMS. An assignable contract allows an investor to exchange contracts on a property, but sell his contract on to another investor, without buying the property. The new investor would just raise the funds and mortgage in the normal way and complete the sale.
This is a sign that BMS are becoming more and more tight with their mortgage lending. I wonder how long it will be before other lenders follow suit.