First-time buyer news

Accord pulls back from shared equity

23 February 2008

Iain Smith, sales director at Accord Mortgages, confirmed the decision, stating that since the beginning of the year, the lender had been receiving enquiries to look at shared equity cases almost every day.

Previously, enquiries had numbered around one every six months.

In particular, Smith said it had seen a large increase in cases coming from developers.

Smith said: “We decided that with such a massive increase in the number of enquiries we were getting, we needed to do a bigger review of our position on the market.

"Rather than going blindly forward and not having a clear policy, we decided to pull back temporarily from the market and do a root and branch review.

"This will look at all the differences in the different schemes and what our entitlements as a mortgage lender are, especially in a worse-case scenario and we have to go to the repossession stage.

“Like a lot of mortgage lenders, we have reduced our new build exposure and we will only lend up to 75 per cent loan-to-value (LTV) now.

"However, with some of these shared equity schemes, you could be doing 100 per cent LTV through the back door, so we want to be careful.

“Shared equity is a good area to be in, but not all the schemes are the same so we want a bit of clarity in the greyness.”

Ashley Clark, director of Need An Adviser.com, said he found it interesting that it was developers making the majority of enquiries into shared equity, rather than the troubled first-time buyer.

He commented: “There is a market for shared equity, but it’s interesting that the push for it is coming from developers.

"This is not about Mr and Mrs Average banging on lenders’ and intermediaries’ doors for for shared equity option – most people want to own property outright. This is about developers needing to sell bricks and mortar to keep their business.”