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New shared ownership mortgage product

Affinity Sutton

 

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Affinity Sutton and Santander launch new shared ownership mortgage pilot

  • New 95% Loan to Value (LTV) pilot deal to help first time buyers
  • Available in 43 Santander branches across London and the South East
  • ‘First of its kind’ deal from affordable housing provider and mainstream UK lender

Affordable housing provider Affinity Sutton has joined forces with leading High Street lender Santander to launch an exclusive shared ownership mortgage product – designed to help first time buyers get a foot onto the property ladder.

In a first for the sector, Affinity Sutton is partnering with Santander, the ‘Home of UK mortgages’, in a pilot scheme to help support shared ownership.  The new deal means borrowers can take advantage of a bespoke product – specifically for those looking to purchase a shared ownership property from Affinity Sutton. The partnership will enable approved applicants to borrow up to 95 per cent Loan to Value (LTV) on between a 25 and 75 per cent share of the property.

The new range of products, all based on customers buying between a 25 and 75 per cent owned share, includes:

  • Three-year fixed, at 6.50 per cent with a £495 fee up to 95 per cent LTV (maximum £250k)
  • Three-year tracker at 5.35 per cent with a £495 fee up to 95 per cent LTV (maximum £250k)
  • Five-year fixed at 6.89 per cent with a £495 fee up to 95 per cent LTV (maximum £250k)

As this is a pilot, the range is only initially available in branches across London and the South East. The branches are linked exclusively with Affinity Sutton developments and will offer customers who have been approved by Affinity Sutton, a customer of Santander Corporate Banking, the opportunity to discuss their requirements face-to-face with a Santander mortgage advisor.

Santander has launched the pilot exclusively with Affinity Sutton, as one of the UK’s largest providers of affordable housing with more than 54,000 homes across the country and also one of the largest developers of shared ownership homes.  Borrowers will pay a mortgage on their share of the property and subsidised rent on the share they don’t own to Affinity Sutton – as the Registered Provider (RPs). 

Until now, shared owners have had to find a greater level of deposit and many have only been able to purchase the minimum share (25%). But by reducing the deposit required, they will be able to buy the share that they can afford and will therefore also pay less rent to their Registered Provider. Shared owners buying under the scheme will need on average a £3,600 deposit as well as approximately £3,500 purchasing costs.

The initiative, which sees Santander as the only mainstream lender to support the shared ownership market with a 95% LTV product, is based on a new joint risk-sharing approach with RPs enabling Santander to extend its reach into the shared ownership market. This strategic partnership enables customers to benefit from mortgage terms not generally available in the market, with a range of measures designed to support customers should their financial circumstances change. Santander’s normal underwriting criteria, which includes an affordability assessment, have not been diluted.

Mark Washer, Group Finance Director, for Affinity Sutton, said: “This partnership builds on our already strong relationship with Santander and we are delighted to be leading the sector in helping first time buyers with a new mortgage product. This plugs a large gap in the market and offers purchasers of our shared ownership properties a real benefit.”

   Phil Cliff, Mortgage Director for Santander commented: “The Santander/Affinity Sutton pilot partnership once again signifies our commitment to helping rejuvenate the UK housing market. This initiative will help first time buyers get a foot on the property ladder and play a vital role in supporting the creation of more affordable housing across London and the South East. The new shared ownership project has been designed specifically to suit the needs of Affinity Sutton’s customers.

”In the first quarter of 2010, we lent one in five mortgages increasing our share of the mortgage market and proving to borrowers that we are a strong and consistent lender, focused on offering customers a variety of highly competitive and value for money products.  In recent months, we have focused particularly on first time buyers launching special products and increasing the maximum LTV on new build properties.  The addition of a shared ownership pilot is very exciting and underlines our dedication to helping first time buyers.”

Jamie Ratcliff, Head of intermediate markets at the Homes and Communities Agency said: “As the government’s national housing and regeneration agency, we welcome this innovative approach to improve the availability of mortgage lending to first time buyers, particularly as it involves no additional public funding. This pilot scheme complements our own work, aimed at building strong relationships with retail mortgage lenders, which is already having positive effects in terms of attracting new lenders and making shared ownership lending more competitive.”

For more information on the Shared Ownership mortgage from Santander, borrowers should visit one of the 43 participating Santander branches. Customers will firstly need to ensure they are eligible for an Affinity Sutton property.