Critchley Hall News
New Build Properties - 'Disclosure of Incentives'
The Council of Mortgage Lenders has introduced new measures to help ensure that conveyancing and valuation processes capture the true value of newly built properties.
The new rules are designed to stop mortgage lenders becoming the victims of over-inflated property valuations.
From 1st September, developers of any newly-built, converted or renovated property must complete a new ‘disclosure of incentives’ form revealing if they have offered buyer incentives, such as discounted mortgages, cash backs, holidays of fitted kitchens.
This is designed to rebuild lenders’ confidence in the marker for newly built properties, particularly city-centre flats, which has fallen due to recent experience of losses and frauds.
Previously, lenders were lending too much money by headline valuations that disguised the fact that the buyer might have been receiving thousands of pounds worth of incentives from the developer.