Shared ownership mortgages. Only available in England and Wales
The maximum LTV we will consider lending on shared ownership properties is 90% (85% for new build houses / bungalows and 80% for flats) of the value of the share of the property the applicant(s) is buying / will own (not the full market value of the whole property).
The minimum valuation for all residential lending is £40,000 (for shared ownership value of share must be at least £40,000).
The following rules apply to shared ownership properties:
- The monthly rental payment must be keyed to the "Shared Ownership Rent" field in Mortgage Pro. If the rent varies or increases over time, the higher amount must be keyed.
- An applicant(s) minimum share must be for at least 25% and the maximum share on initial purchase cannot exceed 85%.
- The applicant(s) initial purchase is based on a long lease (minimum of 70 years or 123 years on all new build properties) and may be for as low as a 25% share. The applicant(s) can purchase further shares in the property, reducing the rent they pay and increasing their ownership of the property. Increasing the shareholding is known as ‘staircasing’.
- The mortgage must be conducted on a full repayment basis.
- The facility to transfer the mortgage to full or part interest-only is not available whilst the mortgage is conducted on a shared ownership basis.