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sean Downsizer Moderator
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Jonnyboy
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Treacodactyl Downsizer Moderator
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sean Downsizer Moderator
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Behemoth
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scarecrow
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scarecrow
Joined: 15 Dec 2004 Posts: 115 Location: Manchester, Up North
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Posted: Fri Dec 17, 04 10:07 am Post subject: |
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Found it...
Britannia offers house-share loan
Graduates and professionals are being targeted
Groups of up to four friends will be allowed to borrow three times their salary each in order to buy a home, under a mortgage launched on Thursday.
The 'share to buy' mortgage, from the Britannia Building Society, is aimed at young professionals and graduates.
The idea is to maximise the amount these people can borrow to buy a home.
However, consumer groups warned that even people desperate to get on the property ladder should exercise "extreme caution" over the mortgage.
According to Britannia the mortgage is aimed at "twenty something city dwellers" who can't afford to buy property on their own and are forced to rent.
Needs catered
A single person is often allowed to borrow three or four times their salary to buy a home.
This mortgage may appeal to some people desperate to buy property but it is fraught with risk
Naomi Newman Consumers' Association
As a result, a single person on a salary of �24,000 would be able to borrow between �72,000 and �96,000, not enough to afford even a one-bedroom flat in many UK cities.
But under the Britannia mortgage a single person earning �24,000 teams up with three other people earning the same wage would in theory be able to borrow �288,000.
Tim Franklin, Britannia Building Society spokesman, said that the mortgage was catering to a very real need.
"Even with a sizeable city income these young people are struggling to purchase a home at big city prices, particularly with student debts to clear," Mr Franklin said.
"With many young people rent to a landlord is money down the drain, it is becoming more acceptable for friends to club together in order to purchase a property," he said.
Credit risk
But Naomi Newman, a spokeswoman for the Consumers' Association, urged caution.
"This mortgage may appeal to some people desperate to buy property, but it is fraught with risk," she said.
"What happens if people fall out or one person wants to move out? It can be financially draining to sell a house.
"This is the biggest financial commitment they are ever likely to make. Are they happy taking on up to three other people's lives and complexities?"
Ray Boulger, technical director at mortgage advisory firm Charcol, added to the Consumers' Association warning.
"If one borrower goes into arrears the credit record of the people who share the mortgage will be adversely affected," he said. |
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tahir
Joined: 28 Oct 2004 Posts: 45672 Location: Essex
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jema Downsizer Moderator
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alison Downsizer Moderator
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andrewheywood
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tahir
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Northern_Lad
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tahir
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Mrs Fiddlesticks
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