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Regulations ‘stifling’ shared equity market

Regulations ‘stifling’ shared equity market

Category: Mortgages

Updated: 07/09/2012
First Published: 07/09/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Regulatory regimes are holding back buyers, according to Nationwide Building Society's head of mortgage strategy and policy.

Addressing a forum in London yesterday, Andrew Baddeley-Chappell claimed that current regulations were deterring borrowers from shared equity, whereby buyers need to
fund at least 70% of the loan via a mortgage or savings funds. The remainder is provided by the Government or home builders, who keep their share of the home until it is sold.

Baddeley-Chappell said shared equity and shared ownership borrowers are "high-risk" for lenders.

"They are complex models with a combination of potentially higher risk borrowers with more complex needs," he said.

His comments follow the Government's pledge that it would inject an additional £280 million into its FirstBuy lending scheme. The scheme was launched last year to assist first-time buyers with taking their first steps onto the property ladder.

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