Buckinghamshire Building Society has unveiled two new shared ownership mortgages for first-time buyers looking to get on the housing ladder.
The society is offering a five-year fixed rate mortgage at 4.29% and a three-year discount at 3.79%.
Both are for borrowers with 5% deposit(95% LTV).
Shared ownership involves buying between 25% and 75% of a property and paying rent on the remainder, which is owned by the local housing association. The rent you pay can be up to 3% of the association’s share of the property’s value.
For many people struggling to save up a large enough deposit to buy a home of their own, shared ownership offers a lifeline.
Tim Vigeon, head of lending at Buckinghamshire Building Society, said: “These are still challenging times for first-time buyers but shared ownership is one of a number of initiatives the Bucks has available for anyone thinking about buying their first home. ”
Amy Nettleton, assistant development director for sales and marketing at Aster Group and chair of the National Housing Group (NHG), said: “A new 95% loan-to-value mortgage for shared ownership is another encouraging sign of mortgage providers’ confidence in lending for the tenure. Traditional ownership is out of reach for many and the increasingly expensive private rented sector is making saving harder. A greater number of 95% LTVs makes shared ownership even more feasible for the huge cross-section of society it’s designed to help.
“More and more banks and building societies now have products specifically tailored to shared ownership, but though the appetite to accommodate the tenure is growing, we’re still yet to see many of the larger lenders enter the market.
“It is vital that the major parties put housing at the centre of their manifestos for June’s general election and, in particular, that they set out how they might further boost shared ownership. We need this tenure’s market to continue to grow and new, meaningful strategies to encourage the country’s leading lenders to embrace it.”
| Product | Initial rate | Followed by the standard variable rate (SVR) | Max LTV | The overall cost for comparison is |
| FS02 Fixed Rate to 30/06/2020 shared ownership purchase only | 4.29% Fixed rate to 30/06/2020 | Currently 4.99% for the rest of the term | 95% of the share being purchased | 5.0% APRC |
| DS02 3 year discount of 1.20% from SVR shared ownership purchase only | 3.79%, a discount of 1.20% from SVR | Currently 4.99% for the rest of the term | 95% of the share being purchased | 4.6% APRC |
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