Hi Vin

I think you are absolutely right - there is a real confusion about shared ownership and equity share products. We are issuing an article for First Time Buyers this week and will make sure we cover off this topic to bring some clarification to the differences.

Thanks for highlighting this.

Lou

Read Louise's article 'Top tips for first-time buyers'

Hi Louise,

Thank you for your prompt response. It certainly answers my query; however I was wondering about how first time buyers can raise mortgage for such new build properties. They all claim that first time buyers do not need deposit to buy between 40-75% of the property; however when I spoke to lenders they said you need at-least 25% deposit on your share. Which is still substantial.

I doscovered that shared ownership and shared equity are two different things but in some cases line between them is very blurr.

Hi Vin

You have raised a really good question. You rightly surmise that there is a 'new build' premium that actually means that new build houses attract a higher price than their second hand counterparts. This is simply because purchasers will pay slightly more for a brand new property, that offers the benefit of gleaming new fixtures and fittings and no maintenance together with the Buildmark warranty and insurance cover. This premium can be between 10% and 20%, so it does mean that resale value in the first year or two can be less than the purchase price. Therefore, a new build property is more about buying a home that you can move into without having to undertake any DIY, but is for living in over the medium to long term and not about a short term investment.

I hope that answers your query.

Can you advise about new build property. It seems to be completely gray area. I have seen properties which are too small and valued at-least 20% more than resale properties. How valuation on such properties is achieved? How much they are likely to hold their value compare to other resale properties in 3-5 years time?

It may be worth having an article with differences such as "shared ownership" & "Shared equity" and mortgage implications in such cases (this is about first time buyers).

Despite the Bank of England base rate being at a record low, life is still tough for those looking for a mortgage. Falling house prices, nervous lenders and an ongoing shortage of mortgage deals mean that some borrowers are running into problems when trying to get a mortgage. Clare Francis looks at tips on how to overcome these hurdles...

Click here to read this article