Home Loans: Review Could Prevent Sales Falling into 'Risk Structure' Trap

Home sales in Finland are facing new obstacles as banks adopt increasingly stringent interpretations of risk structures identified in property condition reports. This strict approach is causing deals to fall through, leaving both buyers and sellers in difficult positions.

One common issue highlighted is the "false plinth," identifiable by the foundation appearing higher than the doorstep. While this structure carries an increased risk of moisture damage, it does not always result in actual problems. Nevertheless, banks are using such findings to deny or delay mortgage approvals.

Jukka Rantanen, CEO of Sp-Koti, has proposed a solution: property inspectors should discuss their condition reports directly with the banks. This collaboration, he believes, could help banks better understand the nuances of these risk structures and prevent potentially sound properties from being excluded from the market due to overly cautious assessments.

The tightening of lending practices by banks is partly attributed to the requirements set by the Financial Supervisory Authority (Finanssivalvonta). These regulations have led to more rigorous scrutiny of loan applications, particularly concerning properties with identified structural risks or components nearing the end of their technical lifespan.