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14/08/2008
New valuation rules 'could force first-time buyers into negative equity' |
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First-time buyers may find it harder to secure a mortgage when new rules for valuing property come into force, an industry expert has said.
The Council of Mortgage Lenders (CML) announced in June that it would be introducing measures to "ensure that the conveyancing and valuation processes capture the true value of the property".
When the new rules are introduced on September 1st builders and developers will be required to complete a disclosure of incentives form.
Helen Adams, managing director of FirstRungNow, explained that the system may cause problems for those that purchase a new property which is likely to depreciate in value quickly.
She explained: "Anything that improves the transparency of house prices is good and it's always been the case that new-build properties have been highly priced with a premium.
"There are good reasons for that but, like when you're buying a new car, with new houses you quite often get depreciation in the first year."
Ms Adams said that those who buy a new property could then quite easily end up in a negative equity situation. |
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