Thursday, July 21, 2011

Another ‘incentive’ is pulled from a stagnant market

Halifax to axe vendor gifted deposits from private sellers

From Monday, Halifax Intermediaries will no longer accept applications which contain an element of vendor gifted deposit from private sellers. The change will affect buyers who are receiving a cash incentive from a private vendor who is selling their property. There is no change for customers who are receiving gifted deposits to purchase new build properties from either a professional property developer or builder i.e. builder gifted deposit........Halifax says with a vendor offering a deposit as a gift, the true purchase price and valuation of the property may be distorted which results in the incorrect LTV being calculated, which in turn could result in customers being offered incorrect products.

Posted by jack c @ 06:25 PM (1713 views)
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5 thoughts on “Another ‘incentive’ is pulled from a stagnant market

  • I’m probably being incredibly dim here, but why does this statement………………
    .
    “Halifax says with a vendor offering a deposit as a gift, the true purchase price and valuation of the property may be distorted which results in the incorrect LTV being calculated, which in turn could result in customers being offered incorrect products.”

    ……………..not apply to “professional property developer or builder i.e. builder gifted deposit”???

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  • They’ve clearly picked up on a clever little wheeze here, but I also don’t understand why developers are excluded.

    Locally, the headline asking prices for new build look way over the top, and I can only assume that cash-back deals are being used to get round the LTV constraints.

    Could this go some way to explain why Rightmove’s asking price index is so much higher than any of the other indices – and why it is the only index to still show a YoY positive number (albeit only just!)..

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  • I have to say I dont genuinely know the answer to the point raised @ 1 (Thursday, July 21, 2011 08:15PM) but it’s a good question and I’ll take it up with Halifax tomorrow – I’ll also seek clarification that this change only applies to introducer business (via brokers) – it seems that the option still exists should a potential buyer go direct via a Halifax Branch.

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  • From what I know, these days, lenders normally lend up to LTV 75% of new built, but 90% of old houses.
    In terms of risk, it is a hugh difference between 90% and 95%, but not so much between 75% and 80% .Maybe that’s why.
    Anyway, judging by all those mortgage brokers’ comments, this must be seriously GOOD news for house price.

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