Valuation ‘necessary in loaning deposits’

Homeowners looking to sell a house in Scotland should be sure to lend on the basis of the true value of their property if they choose to pay the deposit for the buyer, it has been advised.

The Council of Mortgage Lenders (CML) commented on the process of property sellers lending money to buyers to ensure a quick sale, stating that as well as ensuring that they are loaning money based on what the property is worth, discounts need to be negotiated.

Any discounts that are discussed should be captured in the valuation process, Bernard Clarke, spokesperson for the CML, said.

Mr Clarke continued that this is particularly necessary in the current housing market.

"We need to be clear that there’s a distinction between what might be presented as a loan and is in fact a discount," he commented.

According to the CML, February this year saw first-time buyers’ share in the market reach 37 per cent.