Mortgage News
UK Finance overhauls new build disclosure form
UK Finance has published an updated version of its disclosure of incentives form for mortgages on new build properties.
The overhauled form is designed to future-proof the process for the foreseeable future including options around freehold and leasehold, and for modern methods of construction (MMCs).
This updated form will fully replace the existing Council of Mortgage Lenders (CML) form on 1 August.
However, both forms will be valid until that date to allow users time to update their systems.
The purpose of the Disclosure of Incentives Form is to bring together the relevant financial information about the sale of newly built, converted and renovated property transactions into a single form.
This is designed to improve transparency and simplify the flow of information to all key parties involved in the transaction.
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Full completion for the valuer
Lloyds Banking Group head of housing development Douglas Cochrane told Mortgage Solutions that the system had been working well and the establishment of UK Finance was an opportunity to review and future-proof it.
“Brokers’ interaction with it won’t change too much, but the critical part is ensuring full access and completion for the valuer,” he said.
“We’ve tried to make the form flow a lot better and included detail around lease arrangements and also looked at MMCs.”
He added: “The form has worked very well in terms of rebuilding confidence and I hope lenders use the changes as another chance to review their plans around loans-to-value and other criteria and to ensure they are happy with their risk.”
Cochrane also noted that lenders were seeing more part-exchange and assisted move transactions in the current market where developers offer customers support towards estate agent costs.
“Knowing we’ve accounted for that just gives the valuer confidence and I would hope that comes through to the lender that they are happy with the transaction deal and it is a good risk,” he added.