The Tipton and Coseley Building Society has moved into shared ownership lending for both home purchase and remortgage.
Available throughout England and Wales the mortgage is fixed at an interest rate of 3.69% until 30 April 2019.
The West Midlands based society will lend up to 90% of the share being purchased and includes new build homes and apartments.
The maximum loan amount is £250,000 and there are no product fees. Remortgage applications also benefit from free standard legal fees.
A shared ownership mortgage is where the buyer purchases a share of the house or flat, which can be financed with a mortgage. The rest of the property is owned by a housing association to which the buyer pays rent.
The minimum share you can buy is 25% of the property price but you can buy more as and when you are able – this is called staircasing.
Comment
Richard Groom, head of mortgage sales, commented: “These are still difficult times for potential homeowners which is why we’re doing all we can to help. This new competitive fixed rate will protect borrowers from increases in monthly mortgage payments if interest rates rise.
“Also, what sets us apart from many of the national lenders is how we process mortgage applications. Unlike others in the industry we don’t credit score mortgage applicants. We don’t believe that one size fits all and we prefer to assess all applications on a case-by-case basis.”
Amy Nettleton, assistant development director for sales and marketing at Aster Group and chair of the National Housing Group of housing associations, said: “Home-seekers looking to buy their home through shared ownership need a fully-functioning and competitive lending market, so the move by Tipton & Coseley is welcome and further evidence that more lenders are recognising the increasing awareness and appetite from consumers for this type of mortgage.
“Shared ownership tenure has worked effectively for 30 years, but the more banks and building societies that enter the market, the closer we become to creating a truly national and mainstream product for those currently priced out of the conventional housing market.”
Shared ownership trends
There are currently around 200,000 households in the UK living in shared ownership properties, according to the Council of Mortgage Lenders.
The mortgage trade body says the majority of borrowers opting for shared ownership are first-time buyers, many in southern England where affordability pressures are high. Its research found that shared ownership borrowers tend to buy higher valued properties than other first-time buyers.
Both first-time buyers and shared ownership borrowers are increasingly opting for longer mortgages of over 25 years. Six out of 10 shared ownership first-time buyers chose to repay over a term of longer than 25 years in 2016.
Of the 40,000 shared ownership mortgages that are live on lenders’ books, just over half are on a fixed rate, while others will have reverted to lenders’ standard variable rates.
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