Property bought and sold in less than 6 months a flag for fraud - any experience?

[Wellthen]

After 6 months of staring at an unchanging rightmove screen, a house finally came up in our budget and chosen area. We had an offer accepted and all was rosy for about two weeks.

Our solicitor called last week to say she needs to notify the lender that the house has been owned for less than 6 months as this is a flag for fraud. Looking online at people's experiences, the lender will almost certainly withdraw their offer

We know why it was bought and sold in a short space of time and it's all above board so we have no concerns there.

Apparently there are lenders who don't have this policy so we may be able to find a new lender which I guess is best case scenario.

Has anyone experienced this? Will having an offer withdrawn look bad? Might the original lender (nationwide) be happy to lend once the property's been owned 6 months (in about 3 months time)?

We don't understand why the vendor's solicitor didn't foresee this and gutted that what should be a simple process (no chain, newish house) might be falling around our ears.

There's nothing to say the vendor is using the same solicitor as when they purchased so vendor's solicitor might have found out when they were instructed in this transaction. The vendor may not have known that less than 6 months ownership is an issue for lenders.

I'd go through a mortgage broker who can look at lenders specific terms before applying so you only proceed with a lender who will still be prepared to lend.

It's a standard thing, on the advice of the council of mortgage lenders, as part of their anti-money laundering efforts.

It doesn't automatically mean you won't be able to get a mortgage but it might have to go to extra underwriting and if that doesn't work, you'll need to find another lender.

It's worth speaking to a broker to get a back up plan and also ask the estate agent why the hell they didn't mention it.

London and Country are a great broker who have 'special case' specialists who might be able to help...

I had no idea that was a red flag issue but I suppose it makes sense.

I don't think they will be able to sell to anyone [unless it's a cash buyer] for the 6 month period. You should still be able to have your mortgage but will need to wait for the period to expire.

This is standard procedure and should not cause any problems. Your solicitor, mortgage advisor and loan company should be able to work round it by not completing until the six months are up.
Just make sure all parties are aware of the clause, the sellers solicitor will ensure all paperwork is in order to satisfy the mortgage companies criteria.
The Estate Agent should have forewarned you though.
Good luck.

We had this issue. At least one wouldn't lend to us but it was the Nationwide who did. Second London & Country as a broker. They were very good and it's free.

Thanks all this is really reassuring. So will the lender suggest delaying the offer for a couple of months as a course of action?

It is down to you when you want to complete. Your solicitor will advise.