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L&G warns buyers must prove mortgage offer

House-hunters may str-uggle to have offers accepted if they do not have mortgages arranged, claims Legal & General.

L&G says homebuyers without an agreement in principle for a mortgage could be left in the cold by sellers, who will prefer todeal with buyers with a provisional mortgage offer from a lender.

Legislation due to be introduced in 2003 will allow sellers to block potential buyers they suspect are unable to afford to buy their house.

The Homes Bill will permit homeowners to refuse to provide a seller&#39s pack, containing vital information on the house being sold, to buyers they believe are “unlikely to have sufficient means to buy the property in question”.

L&G claims there is already evidence to suggest that sellers will exploit the new regulations.

Its latest survey shows that 86 per cent of homeowners expect people viewing their house to have established their ability to get a mortgage before making an offer.

L&G believes intermediaries could benefit from the new regulations.

PR manager (housing) Peter Timberlake says: “We believe the use of AIPs will become standard market practice once the Homes Bill becomes law. This is good news for intermediaries as it locks borrowers in early and attracts the serious buyer.”

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