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New build buyers must reveal all
From the 1st of September this year, anyone purchasing a new build
property will have to disclose full details of any incentives received to their
lender or mortgage broker
In two weeks time, all new builds, including conversions and renovations, will be subject to
The Council of Mortgage Lenders' (CML) new ruling to try and ensure lenders
have full transparency on all purchases.
This new legislation has been bought in after lenders have been stung with new
builds being put on the market at inflated prices and large discounts being
given, thus costing them millions of pounds.
The CML's Disclosure of Incentives form, will
detail all incentives and discounts offered by the developer.
The developer will complete the form and provide a copy to the lender's
conveyancer and to the valuer.
The Royal Institution of Chartered Surveyors (RICS) have also announced that
they will be making further changes to the ‘Red Book' that will require valuers
to inform the lender if they have or have not received a copy of the disclosure
of incentives form.
Lynsey Sweales, Director of The Money Centre, said, "Lenders
have been becoming increasingly concerned over the incentives being offered buy
new build companies. They are being more choosy in the current market, and I feel they have made the right decision," added Ms Sweales.
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