New rules for those buying new and conversion properties

Lenders and mortgage brokers will be asking those buying new properties if they have received any incentives to purchase under new rules being introduced to the UK market next month.

From the 1st September if you purchase a new build property, including conversions, you will be asked by your lender or mortgage broker for full details on any incentive you receive.

The new rule has been introduced by the Council of Mortgage Lenders to ensure full transparency on all purchases and is in line with other regulations aimed at stamping out money laundering.

'Lenders have been becoming increasing concerned over the incentives being offered buy new build developers and companies. Mortgage lenders want to know the ins and outs of the deal before they lend their money,' explained Lynsey Sweales Director of The Money Centre, one of the UK's largest independent buy-to-let mortgage brokers.

'I feel this is a move in the right direction from the Council of Mortgage lenders. Lenders are being more choosey in this current market and surely if you were lending money to someone you would want to know the full details?' she added.

This come comes in to practice after lenders have been stung with new builds being put on the market at inflated prices and large discounts being given. This has cost lenders millions of pounds.

A number of mortgage brokers have been shut down recently because of concerns about money laundering and other financial irregularities.

Under the new rules lenders will be able to reserve the right to vary or withdraw an offer if it subsequently emerges that there was an incentive or other discount that was not declared.

This comes at a time when developers, struggling with the credit crunch, are pulling out all the stops to persuade would-be buyers to take the plunge. Incentives include a new car, no deposit, cash-back, holidays and even all bills paid for a year.