A lifeline for renters?

With the continued fall in both house prices and interest rates, there is now a real opportunity for first-time buyers to get on the first rung of the property ladder by buying a new home says leading Stanmore-based estate agents, Preston Bennett.

Together with long-time IFA associate First Financial, they are offering Shared Equity Schemes from the participating developers for whom they act, which can make it cheaper to own rather than rent!

Under this attractive scheme, up to 25% of the purchase price can be retained by the developer, typically for a maximum of 10 years, with the balance of the purchase price of the property being the responsibility of the purchaser. During this period the purchaser has the option to buy some or the entire retained equity element. Or, this ‘interest-free loan’ from the developer must be paid back by the end of the loan period or when the property is sold – the sum based upon the current market value at that time will determine equity percentage retained.

“The lender regards the share of retained equity as the deposit, so a new home can be bought without having to save up what can be a substantial sum in the current climate,” said Lee Martin, Director at Preston Bennett. “And, this will also apply if two friends or relatives want to buy the property together.”

The mortgage is arranged through First Financial, also based in Stanmore, with leading mainstream lenders – who recognise the retained equity stake as a true deposit. Costs such as Stamp Duty, surveys and legal fees are payable by the purchaser, as is normal.

“Our independent standing in the marketplace allows us to access mortgage products not always available on the high street and to get the very best deals for clients,” said Simon Ryder of First Financial. “This scheme is significantly different from those initiated by the Government, where a separate extra rental element is payable on the retained ownership – a shared equity scheme not a shared ownership scheme!”

Preston Bennett has the largest portfolio of new homes in Middlesex, South Hertfordhsire and North London– studios; 1, 2 & 3 bedroom apartments and houses – so first-time buyers have a wide choice of properties and locations from which to select.

Recently completed shared equity sales have included apartments at Oxhey Lodge, Manor Road, Harrow (Michael Shanly); Sentinel, St. Albans Road, Watford (Crest Nicholson) and Signature, Stonegrove, Edgware (Belstone Homes).

“The new homes we market are priced from £ 159,950 and we would suggest that properties below £ 350,000 are where purchasers will get the most benefit from this scheme,” continued Lee Martin. “No longer is a new home out of reach to first-time buyers especially. All they need to do is choose a property from the participating developments we are marketing and leave the rest to us, the developer and First Financial!”

To find out more about how to get on the property ladder through this Shared Equity Scheme and what new homes are for sale, visit Prestonbennett.co.uk.

First Financial Intermediaries Ltd. is authorised and regulated by the Financial Services Authority – for more information, visit firstf.co.uk.