Terrible time with council tenant and shock at how law treats landlords15:32 PM, 9th January 2019
About 2 weeks ago 40
Buy to let lenders are making deals tougher for property investors who try and purchase off-plan or at below market value.
In the latest move to fight mortgage fraud, banks and building societies want builders to tell them about any price incentives that affect the value of the property.
Builders and developers must supply the information to the lender’s solicitor before conveyancing is completed and the buyer takes over ownership.
The new form is effective from October 1, 2011, and replaces an earlier version requiring less detail.
“We introduced the new form in response to evolving marketing practices by developers, and to make the wording of the document clearer,” said the Council of Mortgage Lenders (CML), the trade body that represents all the UK’s major mortgage lenders.
“It is designed to ensure that any incentives offered to buyers by developers are clear to lenders, so that firms advancing mortgages have a reliable view of what is being paid for the property in net terms.”
The form applies to any home buyer purchasing a new build property, but is specifically aimed at buy to let borrowers who took advantage of discount deals offered by builders in the run up to the credit crunch.
Thousands of flats in city centres across the UK were sold off-plan – before they were built – by builders offering gifted deposits, discounts and other deals designed to conceal the real market value of the property from buyers and lenders.
The strategy has resulted in numerous court cases for negligence and fraud against valuers, mortgage brokers and solicitors.
The CML has also led a campaign to clean up professional property firms that includes sacking hundreds of solicitors from conveyancing panels.
The National Fraud Authority, the UK’s official fraud watchdog, reckons mortgage fraud is running at around £1 billion a year – down from £3 billion or more before the credit crunch.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agentsLearn More