Homeowners risk higher mortgage rates amid civil service delays

Homeowners risk being charged higher mortgage rates amid civil service delays which mean some property purchases can take more than a year to be registered.

Experts warned that homeowners could miss out on the cheapest mortgage deals and become targets of fraudsters because of the delays at HM Land Registry.

Land Registry figures published in February showed 32pc of all changes to existing registered titles took more than a month, about 56pc of complex changes and new entries took more than a year.

Many Land Registry staff continue to regularly work from home, despite calls from senior government figures such as Jacob Rees-Mogg, who is now a backbencher, urging civil servants to return to the office five days a week.

David Hollingworth, of L&C Mortgages, a broker, warned of a “knock-on impact” for homeowners reaching the end of their two-year mortgage deals.

He said: “The remortgage solicitor may not be able to give the lender the assurance that they require on the title as they cannot check it on Land Registry.”

Those who cannot remortgage are typically moved to costlier standard variable rates.

Adrian Anderson, of broker Anderson Harris, said homeowners looking to remortgage soon after buying their home could run into the same problems.

Some have been choosing tracker mortgage rates with the expectation of taking out a fixed deal when rates drop.

Mr Anderson said backlogs increased during the pandemic and have been worsened by a spike in sales during the stamp duty holiday.

“Delays at the Land Registry are awful now,” he said.

“Applications that used to take a matter of weeks are now taking months and on some occasions years.”

Mr Anderson said owners looking to sell soon after buying may find it difficult as they cannot prove ownership.

Those who want to rent out a new property purchase may be unable to grant new leases or serve notices while estate agents establish proof of ownership.

Zara Banday, partner at law firm Slater Heelis, said delays in Land Registry paperwork can “cause endless issues and fraud risks” for landlords, developers and buyers.

She said: “Buyers could be in danger of falling victim to rogue conveyancers or sellers pretending to amend details on pending registration to force a new sale through.”

Glenn Stride, 80, has been waiting more than a year for his Land Registry paperwork.

He read about a home in Luton being sold without the owner’s knowledge in 2021 and discovered that his property was not registered.

Mr Stride, who is retired and lives in Ickleford, Hertfordshire, is worried about being targeted by fraudsters while he waits for proof that he owns his home.

He said: “I’m absolutely disgusted. I paid around £1,500 for solicitor and Land Registry fees in January 2022. It still hasn’t been sorted.”

His solicitor told him it could take as long as three years for his application to be processed.

A Land Registry spokesman said: “A very small proportion of our most complex cases (around 1pc) are currently taking more than 12 months to complete.

“Of the 380,000 applications we receive to update the Register each month, over a quarter are completed within a day, and two-thirds within a month.

“Any urgent applications, including those necessary to allow property transactions to be completed, can be expedited on request for free, and will usually be completed within 10 days. We currently process over 1,000 of these every day.”

Land Registry said its hybrid working approach is in line with the rest of the civil service and has not had an impact on its productivity.