Company kicks off 50-50 homeownership scheme

Mortgage Introducer

October 19, 2015

Joint Equity Investment LLP said it will cater for reluctant renters, retired renters and divorced & separated renters who are unable to raise a deposit and don’t qualify for local authority or housing association support because they earn too much.

Under the Joint Equity scheme the homebuyer will need a 5% deposit and be able to afford a 45% loan-to-value mortgage. Bond holders will then provide the remaining 50% of the purchase price, the conveyancing and survey costs.

The scheme is available for homes under £250,000, while the typical home funded through the existing bond scheme is worth £150,000.

The company has been piloting the scheme over the past five years, helping 21 buyers secure a home in the process in Bedfordshire, Buckinghamshire and East Anglia.

As Joint Equity Investment raises funds through the mini bond it will look to cater for more than 1,000 homebuyers across the UK who are on a waiting list to join the scheme.

Brad Bamfield, chief executive of Joint Equity, said: “Joint Equity aims to help people who couldn’t otherwise afford to buy a home to do so. Having spent 40-years as successful property developers and financiers we wanted to give something back.

“Our goal is to help those unable to get onto the housing ladder, to do so in a way that still enables them to choose the home they live in and gives them the flexibility to remain in it for as long as they choose and sell it when they want.”

He added: “Last year the number of homes lived in by owner-occupiers fell to around 65% of the property market, the lowest level since 1987 while at the same time the number of people living in private-rental accommodation has risen from 2.2 million in 2002 to nearly 3.9 million last year. There are many people now caught in the private-rental trap and who want to buy their own home but can’t afford to and that’s where we come in.

“We have more than 1,000 resident-partners who want to join the Joint Equity scheme and we believe the coupon available will be highly attractive to investors and that the escalating nature of the coupon combined with the terminal bonus will create a vibrant secondary market for bond-holders.”

Joint Equity predicted the UK market for such schemes to be around 250,000 homes a year.

The bond is managed by an FCA regulated company, Ingman Capital Partners. The homebuyer will see an independent mortgage adviser who will explore all the options with them, including whether they can raise a 100% mortgage elsewhere or qualify for housing association schemes.

The Joint Equity plan will limit the total price buyers pay for a house to £100 per month more than they currently pay for their private-rental costs, ensuring they aren’t taking on unsustainable additional bills.

The bond holders will gain an escalating coupon of 4.5% in years 1 – 5 rising to 6.5% in year 20 – 25, and they get a terminal bonus at the end of the 25-year term worth 25% of the Halifax Property Index growth over the full term.


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