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New build buyers must reveal all

Catherine Deshayes

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.