SDKA has increased the maximum loan size eligible for its title indemnity insurance policy from £150,000 to £250,000, in a move designed to reduce legal costs and speed up residential buy-to-let completions.

The bridging lender introduced Westcor’s Perfect Title Policy last summer, initially restricting its use to loans of up to £150,000 while it assessed the product and incorporated it into its legal processes.

The higher limit will allow the lender to extend the arrangement to more brokers and direct buy-to-let borrowers, potentially reducing the need for conventional property searches and associated legal enquiries.

SDKA said its comprehensive policy costs £392 for loans of up to £250,000, compared with a typical £300 to £500 for a standard search pack covering local authority, drainage and water, environmental and chancel matters.

Additional searches can increase the cost of conventional conveyancing. The lender cited charges of £175 for lack of planning, £145 each for lost title deeds and absence of easement, £115 for restrictive covenants and £60 for lack of building regulations.

REDUCING COMPLETION TIMES

As well as potential cost savings, SDKA is seeking to shorten the period between legal instruction and completion by using insurance to address certain title-related risks.

Local authority searches typically take between two and six weeks, according to the lender. Where the indemnity policy can be used instead, that waiting period can be avoided.

The insurance covers a range of standard title risks, including certain issues involving searches and restrictive covenants, reducing the need for additional legal administration.

However, SDKA emphasised that the policy does not replace appropriate legal due diligence. Solicitors will continue to raise enquiries where necessary, with insurance used to address risks that can appropriately be covered rather than requiring further investigation.

Scot Tsang (pictured), head of operations and in-house legal at SDKA, said: “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.

“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 buy-to-let borrowers to benefit from the product.”