Brokers warn of new build 'affordability checkers'

Buyers of new build properties, often first-time buyers, have been warned against the emergence of ‘affordability checkers’ when purchasing a new home. Brokers have slammed it as a new ruse by developers to get aspiring buyers to use their preferred broker, through whom they can make a commission.

Emma Jones managing director of Frodsham-based mortgage broker, When The Bank Says No, said: “I have had two clients purchasing new builds recently and they had to speak with what the developers are calling affordability checkers, which immediately raised a red flag."

Graham Cox, director of the Bristol-based mortgage broker, Self Employed Mortgage Hub, cut straight to the chase: “Affordability checker? A new word for in-house mortgage broker, more like. It really is time developers and estate agents were fined for this kind of misleading and underhand sales tactic.”

Lewis Shaw, owner of Mansfield-based Shaw Financial Services, was nothing short of withering: “In what’s meant to be one of the most regulated industries, we still have firms operating like a protection racket not dissimilar to the mafia. Preying on often younger and less inexperienced buyers is nothing short of a nasty con and needs to be stamped out once and for all.”

Anil Mistry, director at Leicester-based broker, RNR Mortgage Solutions, was also wary: “This approach mirrors the conditional selling tactics employed by certain estate agents. Developers employ a strategy whereby they encourage borrowers to use their in-house broker, who is perhaps now being called an ‘affordability checker’, often asserting that qualification is necessary for the acceptance of offers. It is imperative for borrowers to understand that they cannot be coerced or mandated to engage with a specific broker. He added: “Developers and estate agents should explicitly highlight, in their documentation, the optional nature of using an in-house broker.”

Though Scott Taylor-Barr, director of Leicester-based broker Barnsdale Financial Management, says he hasn't come across the term ‘affordability checker’ before, "my initial thought is that this is the developer's preferred broker and just an underhand way for someone to hit a target maybe? Either way, buyers should be cautious and remember that, if someone they are speaking to is checking their affordability at the request of the developer, then they are working for the developer, not you as the buyer. In short, they have the needs of the builder at heart, not yours.”

Gareth Davies, director at Southampton-based broker, South Coast Mortgage Services, also advised caution: “Whilst I have no issues with someone selling a home needing to verify the viability of the proposed buyer, I'm confident most advisers have examples of downright conditional selling, namely buyers being told in no uncertain terms that if they want the house they have to use the 'in-house' broker and legal firm because new-builds are apparently 'specialist'. Which, of course, is utter cobblers.”