Shared appreciation mortgages 'give property ladder boost'

01 October 2007
First-time buyers could be helped by shared appreciation mortgages, according to an expert.

A spokesperson for the independent financial adviser company Zen Financial Services said that this type of mortgage provided a real opportunity for people struggling to save deposits or who had a less-than-gleaming credit score.

Shared appreciation mortgages are not shared ownership but rather when the lender takes a share of the profit when the property is sold.

The first lender to offer such a mortgage was the Bank of Scotland in 1996, while a number of other providers have since introduced them.

Mike Pendergast of Zen Financial Services said that on average the amount the lender takes is between 15 and 25 per cent.

"That's not necessarily for adverse credit, although they would consider that, but for first time buyers as well and particularly in areas where it can be more expensive for first time buyers to get on the market," he added.

Zen Financial Services is an independent financial firm offering advice on a range of topics.

Find out more about a shared appreciation mortgage and first-time buyer mortgage

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