CML in talks with builders over increasing new-build LTVs
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The Council of Mortgage Lenders is in discussions with house builders over hiking the maximum LTVs on new build properties.
Speaking at Countrywide’s National Property Showcase seminar this morning, Nigel Stockton, financial services director at Countrywide, says he welcomes the move.
He says some lenders will only lend up to 65% LTV on a new build home, compared with 75% LTV on other properties.
He says: “You cannot get a strong 85% LTV deals on new apartments and new homes.
“The LTV cap is the biggest thing stopping the new homes sector and the market in general moving forward. I’m delighted the CML is holding talks with house builders about this.”
The CML has confirmed that it has had talks with house builders and is believed to have another meeting scheduled in a few weeks.
Stockton also says he does not expect the mortgage market to recover until 2012.
He told delegates: “The mortgage market in my opinion is going to go nowhere until after March next year when the Special Liquidity Scheme comes to an end.”
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Readers' comments (3)
colin | 19 May 2011 11:39 am
good news potentially.......long overdue, but i guess lenders got so burnt on over valued properties with gifted deposits and stanmp duty etc etc its no wonder they shy away.
Simple fix, max 90% no incentives permitted.
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Anonymous | 19 May 2011 11:51 am
Years of inflated sale prices, concealed deposits, vendors deposits, apparently discounted 'off-plan' schemes, collusion with valuers and stupidly blinded purchasers are now coming back to bite property developers.
I have witnessed the losses first hand that Lenders have made against new-build property in relation to non new-build and I'm surprised Lenders will entertain new-build at all.
I hope this is less of a conversation and more of a telling off from the CML. House builders have to be transparent and build houses that people want in areas that are not already overpopulated with similar housing. Until this is the case we see similar levels of mistrust on the part of Lenders.
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alan shaw. Mortgage Integrity | 19 May 2011 1:14 pm
Interesting that only 9 days after Grenville Turner announced the launch of a 'specialist new build service from Countrywide' that Nigel Stockton, financial services director at Countrywide would come out and say:
"It’s impossible to get 85% LTV deals on new apartments".
As a new build specialist broker ourselves could I help out and direct Nigel and his Brokers to the Woolwich for all their 85% new build enquiries on apartments and also to some provincial lenders who will happily look at the same.
We also produce an up to date New Build Lender guide for LTV"s if this would help?
My comments are very much tongue in cheek Nigel as I wouldn't wish to knock anyone in a tough market and believe me the New Build market is a tough one! but this does show how the knowledge base for a New Build Broker needs to be much higher and up to date in such a fluid product market.
Good luck with the New Build venture.
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