Half Share Mortgages

machtzu

Hi

I'm looking to buy a property and its a halfshare with a housing association, the problem is I can't find a mortgage company that do offer mortgages on halfshares. Do you know where I can look or what the best deal is at the moment, my share of the house would be £85K.

Thanks,

rchddap1

Firstly ask the Housing Association as they will be able to point you towards mortgage companies that do this. Two that I can remember is Halifax and Nationwide. There may also be some rules to the offer. For example, my shared ownership mortgage had to have £0 as the leasehold rent....this took a few times for the Halifax to get right.

Fairdo_2

Off the top of my head the following lenders should be able to lend:

Halifax, Nationwide, Portman Building Society, Abbey, Leeds Building Society, West Bromwich Building Society and Woolwich.

Some will insist on you having to put down a personal deposit of 5% of your share (£4,250) and Woolwich would require 10% deposit (£8,500). Leeds & West Brom would do 100% of share.

ctabuk

This system known as Social Homebuy does not become active until April next year Many Lenders like Abbey and A&L have now said that they won't support the scheme. Currently Housing Associations may offer the scheme on a voluntary basis. I have a professional interest in this subject because our brokerage was one of a just a few that put input into it. So I cannot go further than to say - wait until next year, if the Government are truly intending to release such a scheme then I would urge caution until all the final details are announced. If you search the term given you will find the Council of Mortgage Lenders press release on this.

rchddap1

ctabuk: If shared ownership schemes don't exist...then why am I on one? These schemes do exist and have done for many years. As per usual this is the government sticking their oar in and messing with something that isn't broke.

Fairdo_2

I must admit I missed out the all important question which is, "Is this a Shared Ownership (Part buy - part rent) or Shared Equity (Owned share with Interest free deposit) scheme?"

They are available on both basis and several House Builders are also doing this with Shared Equity subject to terms and conditions.

ctabuk

The Government abolished Rent to Mortgage in July this year. As I stated, there are voluntary schemes such as DIYSO (Do it Yourself Shared Ownership) and there are schemes running with organisations like the Police, Nurses and Teachers where Housing Associations are running New Build Projects on Shared Equity basis. But the new scheme does not officially start until next year. I would hate for a poster here to enter into a Mortgage contract that could later have detromental ramifications, It's always best to go into the Housing Association and sit with them and discuss the various options that maybe available. Then seek Independent Advice. Personally I thought Rent to Mortgage was years ahead of its time, but despite numerous letters from us the ODPM pulled the plug.

machtzu

Fairdo wrote:

I must admit I missed out the all important question which is, "Is this a Shared Ownership (Part buy - part rent) or Shared Equity (Owned share with Interest free deposit) scheme?"

They are available on both basis and several House Builders are also doing this with Shared Equity subject to terms and conditions.

It is a part buy - part rent scheme

Fairdo_2

In that case, I refer back to my original post as to who deals in this market of "Shared Ownership".