First-time buyers 'could opt for a shared-equity mortgage'

By Jonathan Dawes, Thu 14 Aug 2008 - Published in Mortgages

Shared-equity mortgages are set to become more popular as the credit crunch continues, according to Click n go Mortgages.

The mortgage brokers said this type of loan would be a particularly good option for first-time buyers.

Hayley Martin, team leader at Click n go Mortgages, said one big advantage of shared equity mortgages was that "you don't have to put a deposit down if you don't have one".

She added "while property prices are falling, they are still high and a ten per cent deposit is still an awful lot of money".

With some shared equity mortgages when a builder offers a property for sale they keep 15 per cent and the homeowner buys that share back within ten years.

Elsewhere, local authorities buy 15 per cent of the property and again the homeowner pays that back within a decade.

A survey conducted at the Glastonbury Festival earlier this year by the Chartered Institute of Housing (CIH), Mendip Housing and the Aster Group found less than one per cent of those questioned owned a house through a shared-equity scheme.

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