Leeds Building Society has launched a new shared ownership mortgage product, which has been designed to help first time buyers onto the housing ladder, with a competitive fixed rate for shared ownership of only 6.19 per cent.
Kim Rebecchi, Leeds Building Society’s sales and marketing director said, “We are all well aware of the difficulties facing first time buyers buying a home. They can often struggle to meet the full asking price or their current income is insufficient to support a full mortgage. This shared ownership product facilitates that first step, and provides a starting point to build up to full home ownership as earning potential increases.
“The product has an overall maximum LTV of 75 per cent with a borrower share of up to 95 per cent, which is ideal for customers who have saved for a deposit but cannot buy a property in their own right. There is no doubt that this product will prove attractive to those customers who are ready to make the first step into home ownership.”
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This really is very irresponsible lending. First time buyers ought to have a ‘cash’ deposit of at least 25%
First time buyers ought to have a ‘cash’ deposit of at least 25% – that’s absolute rubbish. How do you expect first time buyers, say a young couple, to save up around £50,000? Mortgage providers should focus on buyers’ financial stability. In the Netherlands, for example, you don’t need any deposit, you just need to show a permanent contract so that the lender knows you’ll be able to pay your mortgage payments. If the required deposits become even higher than they are now, no new buyers will be able to enter the property market and the housing market will be in serious trouble.