Mortgage Next launches shared ownership mortgage
The product is aimed at giving first-time buyers another option to get onto the property ladder and has a discounted rate of 0.75 per cent off the standard variable rate for three years from completion.
The product also offers a free valuation and no administration fee.
Justine Tomlinson, managing director of Mortgage Next, said: “Shared ownership schemes give individuals who cannot otherwise afford to buy a property the opportunity to buy a proportion of the property and pay rent to a registered landlord. In most schemes, the individual can increase the proportion of the property they own over time so that, as their circumstances change, they will have the option to increase their share of the ownership.
“This mortgage product will appeal to individuals wishing to take their first step onto the property ladder, and also gives the added benefit of a free valuation.”
Other features of the shared ownership product include an early redemption charge of 3 per cent if the loan is reduced by more than 50 per cent in the three-year discount period, a £150 completion fee and an intermediary procuation fee of 0.40 per cent.
Shared ownership is an option which the government is keen to promote as a way of making property more affordable.
However, Phil Perry, director at ARK Financial Planning, believed the government, and lenders, needed to do more to help promote shared ownership.
He explained: “I think I have only been asked about shared ownership once but there is scope for this type of product as property prices are going up faster than earnings. Anything that helps people get onto the property ladder is a good thing. However, there is not enough clarification from the government and lenders on how they are going to make it work successfully.”