Jul 23 2007
Twelve new shared equity proposals, which aim to help more people on low incomes onto the housing ladder, have been shortlisted following the successful first phase of the shared equity competition.
The competition was launched by the then Chancellor, Gordon Brown in March this year. It aims to offer a wider choice of shared equity mortgages for homebuyers through the Open Market HomeBuy scheme. The scheme aims to provide affordable and sustainable equity loans, funded by the Government and other lenders, for households who are, at present, unable to buy outright due to the prohibitive cost of the housing market.
The Housing Corporation received 32 expressions of interest from a whole range of organisations from banks and building societies to housing associations and developers.
Following a full assessment, 12 bidders have been invited to submit outline proposals.
Steve Douglas, Acting Chief Executive of the Housing Corporation said,
“The rising cost of buying a house is preventing first-time buyers from taking that first step on the property ladder, which is why this competition is so important. Shared equity products are an excellent way to allow people to achieve their home-owning aspirations, enabling them to buy a share of their first home on the open-market.
“This competition invited a wide range of organisations to join Open Market HomeBuy. The 12 shortlisted bidders have all come up with interesting and exciting ideas for products aimed at helping homebuyers get more financial choice from a greater range of providers when looking for a home to call their own.”
Some of the potential ideas include:
- Developing products which allow customers to buy on the open market at lower shares - potentially as low as 50 per cent, so reducing the income needed to enter the housing market;
- Simplifying products on offer, with the ability of sole providers to set a lower rental charge;
- Joint venture structures which will bring more low cost homes forward.
The Housing Corporation is committed to providing affordable housing products in partnership with a diverse range of equity providers, ensuring the government can help even more people who, without the scheme, would not be able to buy a home that meets their needs.
The Housing Corporation will continue to work with CB Richard Ellis, the real estate advisor, to assess the shortlisted schemes with outline proposals due for submission in September.