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Friday 12th of September 2008
September 2, 2008

New regulations for property valuations


by Gill Montia
New regulations for property valuations

New regulations aimed at preventing inflated property valuations have come into force this week.

The measures are aimed at protecting mortgage lenders who have in the past become the victim of deliberately inflated valuations.

In the case of new build city centre flats and apartments, prices have plummeted in the past year because of a combination of oversupply and fraudulent mortgage applications backed by inflated property valuations.

Under the new regime, which has the support of the Council of Mortgage Lenders, Royal Institution of Chartered Surveyors and the Law Society of England & Wales, developers and builders must advise lenders if they have offered buyers incentives.

The housing market slowdown has prompted developers to offer all kinds of benefits to purchasers; cash-back offers and the payment of legal fees are typical examples of incentives that can result in a property being sold for more than it is worth.

Henceforth, developers of newly-built, converted or renovated properties will complete a questionnaire that informs lenders and surveyors of incentives to buyers.

The Home Builders’ Federation, Homes for Scotland and the Construction Employers’ Federation are all in support of the new system, which should help to reinforce lenders’ confidence in the market for newly-built property.

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