Halifax Axe Vendor Gifted Deposits From Monday25 July

holly_hobby

Halifax are to axe vendor gifted depoists from PRIVATE sellers from this coming Monday (apps in by close of bus on Monday will still qualify).

Following this date only professionally gifted deposits i.e builder deposit @ 5%, and connected family member member deposits will be accepted.

Sure the mge guys have already had the Halifax lender rep or mailshot advising this - but just in case you haven't I though it worth posting up.

Holly

maninthestreet

So why only PRIVATE sellers??

holly_hobby

Halifax strapline for removing Vendor gifted deposits, is that the true purchase price and valuation of the property may be distorted, resulting in the incorrect LTV being calculated, which in turn could result in customers being offered incorrect products.

Or to be summed in in one sentence ....

they have unearthed a bit of jiggery pokery during their audits ...

Holly

TrickyDicky101

In my (admittedly limited) opinion, only connected family member deposits are truly a gift of something real - the rest are just a con.

jhxmt

TrickyDicky101 wrote: »

In my (admittedly limited) opinion, only connected family member deposits are truly a gift of something real - the rest are just a con.

Agreed. To my mind, it doesn't matter whether it's a private seller or a 'professional' seller - if someone's offering to sell you a property at £200k, but when you refuse they say they'll give you £10k "as a gift", then the property isn't worth £200k. It's worth £190k. If it was worth £200k, they would have held out for £200k!

As you say, the only place (I can think of) where this self-interest rule doesn't apply is in the case of family (or possibly very close friends). Even then, it should be scrutinised!

Leon_W

In the bad old days it was a roundabout way for Halifax to effectively offer 100% mortgages. They would have a raft of offers at 95% LTV, and that, together with the 5% vendors gifted deposit would be 100% mortgage no money down. Remember, at the time they had to compete with the likes of Northern Rock offering 125% loans.

Of course Halifax were not worried as house prices were rising.

Obviously things have changed and other lenders removed their incentives but Halifax didn't remove this little criteria anomaly until today. It just brings them in to line with other lenders and you'll need a "real" 10% deposit in future.

brit1234

Good news, the sooner all these dodgy gifted deposits are gone the better.

Gift deposits on new builds were a significant reason for the UK housing bubble and significantly distorted land registry prices for all upwards.

holly_hobby

Well a gift deposit on a new build - would be a builders deposit - and Halifax still accept those @ 5% max.

Its private (none related) sales that are effected.

Holly