Principality Intermediaries enhances new home proposition and introduces Shared Ownership mortgage
In this article
Principality Intermediaries has introduced a new Shared Ownership mortgage and refreshed our new homes criteria to help make new homes more accessible for homeowners looking to purchase off plan.
Shared Ownership mortgages are available across England and Wales on new and pre-owned homes using government backed initiatives designed to meet the needs of first time buyers, a key group for Principality as it looks to grow the number of homeowners taking their first steps onto the property ladder.
The new mortgage and updated criteria, continues to demonstrate Principality’s commitment to making more possible for both intermediaries and their clients.
Shared Ownership – Market overview
There is a growing demand for new affordable homes for buyers with NHBC recently reporting 133,213 new homes completed in 2023, decreasing 12% from 2022 (151,308). Of this figure, 45,649 new homes were completed in the rental and affordable sector, up 10% on 2022*.
Shared Ownership – How it works
Shared Ownership means your client can buy a share of the property and pay rent to a landlord, usually a housing association or registered social landlord, on the rest.
As their circumstances change, your client can increase their share in the property and the amount they borrow for their mortgage and pay less rent. This is called staircasing.
The benefits are that applicants can save for smaller deposits and, because the amount they are borrowing is lower, it can also help them achieve mortgage affordability thresholds.
The key features of our shared ownership mortgages are:
• we’ll lend up to 95% on houses and 90% on flats on between 25% and 75% of the property value;
• they are available in England and Wales; and
• on new homes, the mortgage offer is valid for up to 16 months
Other changes to Principality’s new build proposition
Principality has also reduced the deposit to purchase a new house to just 5%. Buyers of new build flats will need a 10% deposit.
Also, if a property includes builders incentives, Principality will no longer net off incentives from the purchase price to help buyers with affordability and reduce the deposit required to secure their property.
|
Example |
A customer purchases a new build property for £100K. The buyer must pay at least 10% of the deposit, £10K. A builder provides a gifted deposit of £5K (5% of the purchase price) |
|---|---|
| Previously | Customer would still be expected to pay 10% of the remaining £95k = £9.5k. |
| Updated Criteria | Customer would only be expected to pay the additional 5% of the £100k = £5k. |
A word from our New Homes Business Development Manager, Niki Willacott
"We’re delighted to be introducing our shared ownership to clients across England and Wales. We’ve introduced this at a time where buyers are looking for flexibility to ensure they can secure their new home but in an affordable way. We’ve also made further enhancements to our new build proposition including reducing the deposit requires on new houses to just 5% and how we accept gifted deposits. These changes come from broker feedback and are a positive step to make new home ownership more accessible to buyers".
For information on how Principality Intermediaries can help support you get in touch with your local BDM or contact our broker support team on 0330 333 4021.
*Source: Record numbers of affordable homes completed in 2023 as private house building slows - NHBC
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