The Cambridge - Shared Ownership Mortgages

15 January 2019 • Products & Services

The Cambridge Building Society has developed a range of shared ownership mortgage products for clients who want to access affordable home ownership on a part-own/part-rent basis.

The Cambridge shared ownership mortgage offering

The Cambridge is committed to helping your clients own their homes affordably. As part of this commitment we canvassed opinion from intermediaries on our proposition and this has influenced both our products and our lending criteria.

What we do:                         

  • lend up to 95% of the share being purchased (houses and flats)
  • keep our fees low
  • make no requirement to have 100% staircasing within the lease
  • free valuation for purchasers

Additionally, our shared ownership range includes products for borrowers wishing to remortgage for the purposes of staircasing.

Our criteria:

  • scheme must use the Standard Model Lease which contains a Mortgage Protection Clause
  • minimum purchase share of 25%
  • available for repayment mortgages only
  • further advances will be for the purpose of staircasing only

A new era

Dan Barker, Product Manager at The Cambridge explains, “We’ve always supported shared ownership schemes, but our previous approach was limited so it’s great to now have a full range of products for intermediaries to select from. Choice is important so we’ve been keen to ensure we offer both fixed and discount products and fees have been kept low to ease the entry costs for first time homeowners.”

Why shared ownership is so important

Shared ownership schemes fit perfectly with the Building Society ethos. For example, on 19th January 1847 The Cambridge Permanent Benefit Society held its first meeting in the city’s Town Hall with the express aim of making every man “his own Landlord”.

Shared ownership can help make this a reality today for many of your clients who would otherwise be unable to own a house or flat. The scheme has already delivered its intention and continues to do so.

According to statistics from the Department for Communities and Local Government (DCLG) in 2016/17, 41,530 affordable homes (including rented and home buying schemes) were delivered in England, 27% more than the previous year, while between 2015/16 and 2016/17 the number of shared ownership properties in England increased from around 4,080 to 8,810 (in fact, this may be an underestimate as a result of the way data had been collected previously).*

Shared ownership is also almost certainly among the factors which helped the home repossession rate to fall from 47,900 in 2009 to 28,900 in 2013.*

However despite the schemes successes, a 2017 YouGov survey revealed that 4 in 10 people didn’t understand the benefits of shared ownership. By enticing borrowers with attractive products and flexible lending criteria, The Cambridge is determined to help intermediaries educate their clients of the many benefits.

The survey, which asked questions of 2,111 adults, revealed only 60% are familiar with staircasing and 51% of respondents did not know that banks and building societies offer shared ownership mortgages.

Mainstream press coming on board

There has been a certain amount of negativity from some of the mainstream media, but, as the affordable housing crisis continues, even those who have sneered at shared ownership in the past are now waking up to the fact that for many ordinary people, millennials especially, and those living in expensive regions shared ownership may be the only way to get on the property ladder. And with super-mainstream commentary from the MailOnline now advocating shared ownership as a solution to the crisis, this signifies a distinct "tables have turned" moment.

Join The Cambridge to get more people into their own homes

It is a continuing privilege for The Cambridge to enable home ownership for our members across the Cambridgeshire region and beyond, and we strive to ensure as many people as possible will be able to enjoy the thrill of becoming a home owner. Talk to a member of our expert team today by calling 0345 601 2744 or take a look at their profiles to find out about their expertise.

*Department for Communities and Local Government. Affordable Housing Supply: April 2016 to March 2017 England.