MortgagesMay 15 2013

Borrowers want improved mortgage products: survey

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A survey of almost 3000 UK adults on behalf of property investment and equity loan firm Castle Trust also revealed that 79 per cent wanted lenders to offer more creative solutions for mortgage finance.

The survey, held before the chancellor announced the launch of the Help to Buy equity loan scheme, also revealed that 66 per cent of people thought that mortgage products on offer lacked variation.

It also found that 37 per cent welcomed the opportunity to reduce their monthly mortgage commitments through equity loans, such as partnership mortgages. These offer home buyers 20 per cent of the value of a home when taken out alongside a repayment mortgage from a traditional lender, with a share of the profit of any future sale.

Sean Oldfield, chief executive of Castle Trust, said: “The combination of demand from consumers and the introduction of Help to Buy has thrown the spotlight on equity loans, and the need for creativity and innovation in the UK mortgage market is a real and growing issue.”

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Jane King, principal of London-based Ash Ridge Asset Management, said: “These types of products could help some customers who have adverse credit, but the Help to Buy scheme is interest-free for five years so it would be hard to compete with that I imagine.

“We still don’t know what the government’s lending criteria will be for its own equity loans so the benefits of the private sector loans against Help to Buy have not been established yet.”