Thu 12 Jun 2008
Housebuilders must divulge incentives
Housebuilders will soon be required to disclose buyers’ incentives to enable lenders to offer mortgages that reflect the true value of a property.The Council of Mortgage Lenders, whose members lend 98% of all UK mortgages, will introduce the rules, which will come into effect on 1 September.
Some housebuilders have traditionally used incentives such as cashback schemes, an offer to pay the first year’s mortgage, or the inclusion of a new kitchen.
Michael Coogan (pictured), the CML's director general, said: "We are introducing these measures to help sustain confidence in the market for newly-built property.
"Lenders need to know about discounts and other incentives so they can be sure that the decision to offer a mortgage is based on a reliable valuation.
"The new measures will provide additional security and safeguards for borrowers, as well as lenders."
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