Legal Updates

CML introduces new valuation process

Date:  05 Sep 2008

Mortgage lenders are now able to obtain full details of incentives offered by property developers to buyers, as part of a new initiative targeting fraudulent activity, it has been reported.

The measures are aimed at ensuring conveyancing and valuation processes capture the true value of newly-built properties.

All developers will be required to fill out a ''disclosure of incentives'' form documenting any discounts offered to buyers, ensuring lenders do not grant mortgages based upon inaccurate valuations.

Michael Coogan, director general of the Council of Mortgage Lenders, said the measures were "particularly important" at a time of limited funding availability for house purchase transactions.

He added: "If developers ensure that they are transparent, and disclose any discounts or incentives on offer to buyers, lenders’ confidence should start to return.

"In the meantime, recent lender experience means buyers of new-build properties will be expected to provide significant deposits so that lenders can manage their risks."

The Times reports that an estimated £7 billion worth of mortgages have been fraudulently obtained by organised gangs and other individuals.

Professionals seeking more information on how property law affects them may wish to consult commercial property law specialists in London.

Vizards Tweedie are specialists in all aspects of commercial and residential property work. Contact Jeremy Blain for commercial property enquiries and Sandy Mitchell for residential property enquiries

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