From today, lenders will ask builders or developers of any newly-built, converted or renovated property to complete a disclosure of incentives form.
This will notify the lender of any discounts or other incentives that are being offered by the developer.
The CML believe this move will ensure a mortgage is offered on the basis of an accurate valuation, help prevent fraud, and reinforce lenders’ confidence in the market for new-builds.
The initiative is backed by several other trade bodies including the Royal Institution of Chartered Surveyors, the Law Society, and the Home Builders’ Federation.
Michael Coogan, director-general at the CML, says: “These measures to reinforce confidence in the accuracy of valuations of new-build properties will help underpin this segment of the market.
“This is particularly important at a time of limited funding availability for house purchase transactions. If developers ensure that they are transparent, and disclose any discounts or incentives on offer to buyers, lenders’ confidence should start to return.”
Coogan says that until buyer confidence returns buyers of new-builds will still be expected to provide significant deposits so that lenders can manage risks effectively.