The measures, which are supported by the House Builders Federation, the Law Society and firms providing warranties on hew homes, will guarantee that new homes have been properly completed and undergone a satisfactory final inspection before mortgage funds are released and the buyer can move in.
The CML has driven the initiative to ensure that there is no repetition of past problems endured by people who move into properties that have not been satisfactorily completed. Under existing arrangements, new homes receive a "pre-handover" inspection to identify any unfinished work, but the problem has been to synchronise this with the home-buying process. However, from the beginning of next month, lenders will not release funds unless a satisfactory final inspection has been completed and the buyer's conveyancer has been assured that a full new home warranty will be in place on or before legal completion.
The arrangements will apply to all transactions involving new properties being built or converted in accordance with a new home warranty scheme, and which exchange contacts on or after 1 April 2003. On that date, the CML will be amending its Lenders' Handbook - which provides standard industry instructions for conveyancers - to underpin the new approach.
