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Ipswich Building Society refreshes shared ownership mortgage range

13 Mar 2019

4 min read

Added: 13 March 2019

Improvements to affordability and criteria on existing shared ownership products and the introduction of a new product for up to 90% of the share, providing a more attractive option for those with a reduced borrowing requirement

Ipswich Building Society has refreshed and added to its shared ownership mortgage range in an effort to further assist prospective first time buyers who want to own their own home but, due to the rising cost of housing, may be considering alternative methods of getting on the housing ladder.

The Society’s shared ownership offering allows people to purchase up to an 80% stake in a property, financing up to 95% of the share with a mortgage and paying rent to a housing association on the remaining share. The Society enables borrowers to add to their loan to increase the share they own (known as staircasing) at a later date, subject to the terms of their lease.

Criteria and affordability improvements to existing shared ownership products

The following improvements have been made to the standard product range criteria and assessment:

  • Maximum loan size increased from £350,000 to £500,000
  • Reduced pricing on both of the Society’s existing discount and fixed rates products for up to 95% of the share#
  • Lending now available on flats up to 10 storeys (previously 5)
  • Gifted deposits will be accepted up to 95% of the share where applicants can provide 12 months’ rental evidence, or up to 90% of the share without this

Developments also include an exclusive affordability calculator for all cases where the property is less than ten years old. The Society will use reduced ONS household and communication expenditure, acknowledging that newer shared ownership properties are more energy-efficient, and therefore will typically have lower running costs than older properties.

Products continue to be available to direct applicants across England and Wales, and through intermediaries based in the Society’s heartland area and members of selected networks and clubs.

New 90% share mortgage

The Society has introduced a new 2 year fixed rate mortgage at 3.25% until 30 June 2021 (5.4% APRC*) for up to 90% of the share (maximum 80% LTV). Applicants are subject to the same lending criteria as the Society’s existing shared ownership mortgage range; products are available from five to 40-year terms, up to a maximum loan of £500,000, and incur no completion, application or CHAPS fees. A tiered valuation fee based on property value applies and remortgage applicants will benefit from a free valuation and fee assisted legals.

During the fixed rate period the product offers fee-free overpayments up to 50% of the original loan amount. Overpayments in excess of 50% of the original loan amount, or early redemption, will be charged at 3%. For overpayments this charge is calculated on the overpayment amount that exceeds the 50% allowance, and for early redemption is calculated on the original loan amount.

Richard Norrington, Ipswich Building Society CEO, commented: “Shared ownership schemes have come a long way since their original introduction in the 1970s, and we’re delighted to have been helping people get on to the property ladder this way since the mid 1990s.

“No longer just an extension to social housing, or to help public sector workers to purchase a home, shared ownership is now just as likely to be used by young professionals in areas where property prices are beyond their reach: shared ownership is often an alternative and more secure option for this group who are looking to avoid the volatility and uncertainty of the private rental market.

“We’re confident that the refresh and additions to our shared ownership range will make this type of property ownership accessible to more would-be first time homeowners.”

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