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Crunched Welsh Sellers Borrow Builders' Price Obfuscation Tactics

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Sellers offer deposit ‘gift’ as house market slows

" 'CREDIT crunch' fears are leading increasing numbers of individual home sellers to offer their homes with a 5% mortgage deposit gift for buyers. Developers marketing newly-built properties have long since offered the incentive, but the approach has been less common among ordinary homeowners. However, property experts fear the global credit crunch could affect the number of first-time, cash-poor or risky buyers in the market. The number of mortgage lenders offering 100% mortgages has already dropped from one in three to one in ten, while some expect mortgages to become more expensive over the coming year. Agents say it’s against this backdrop that ordinary home owners offer to pay the 5% deposits. "

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Sellers offer deposit ‘gift’ as house market slows

" 'CREDIT crunch' fears are leading increasing numbers of individual home sellers to offer their homes with a 5% mortgage deposit gift for buyers. Developers marketing newly-built properties have long since offered the incentive, but the approach has been less common among ordinary homeowners. However, property experts fear the global credit crunch could affect the number of first-time, cash-poor or risky buyers in the market. The number of mortgage lenders offering 100% mortgages has already dropped from one in three to one in ten, while some expect mortgages to become more expensive over the coming year. Agents say it’s against this backdrop that ordinary home owners offer to pay the 5% deposits. "

If it's undisclosed to the financing bank, it's mortgage fraud for which the seller is equally answerable. Also, it fraudlently increases the tax base for CGT if it's not disclosed to the Revenue.

If it is disclosed to the financing bank, it's equivalent to a price cut - except that the buyer pays more stamp duty than if it was a real price cut!

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If it's undisclosed to the financing bank, it's mortgage fraud for which the seller is equally answerable. Also, it fraudlently increases the tax base for CGT if it's not disclosed to the Revenue.

If it is disclosed to the financing bank, it's equivalent to a price cut - except that the buyer pays more stamp duty than if it was a real price cut!

Therefore the first option is correct: it is mortgage fraud.

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  • 297 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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