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HCA LAUNCHES NEW MODEL OF SHARED OWNERSHIP (Buying)
by administrator 
, Wednesday, February 03, 2010, 05:04
A new model shared ownership lease, aimed at creating more certainty for lenders and more clarity for purchasers of New Build HomeBuy property, has been created by the Homes and Communities Agency.
The revised model lease, which will be adopted by all lenders and housing providers, will come into force from April 6, 2010. While the existing lease has been adapted over the years, changes to create the revised lease are more wide-ranging, using clearer English and incorporating amendments to 'fundamental' clauses that provide greater certainty of the rights and obligations of lenders, affordable housing providers and customers.
The changes also increase the protection offered to mortgage lenders in the shared ownership lease. HCA believes the lease will not only simplify and speed up the home buying process but, at a time of financial caution, will assure existing lenders of shared-ownership mortgages. As economic conditions improve the revised lease should help to encourage new lenders into the shared ownership market.
Jamie Ratcliff, head of intermediate markets for the HCA said: "New Build HomeBuy is an important route for helping first time buyers get a foot on the property ladder. However, we have listened to the concerns of some lenders and also acted to ensure purchasers are clear about their obligations. Our revised shared ownership lease works for both lenders and purchasers by spelling out responsibilities and liabilities more clearly."
The lease has been developed in conjunction with Communities and Local Government, CML, National Housing Federation and a number of leading mortgage lenders and providers of affordable housing. The lease can be adapted by housing providers and lenders to suit individual situations, but there are fundamental clauses that must be included in any new lease, and these are clearly signposted.
Lucy Thornycroft, investment leader of the Federation, said: "This considerably strengthens existing protection for lenders who provide mortgages. We hope that these changes, combined with the very low levels of repossession of shared ownership properties, will encourage lenders to commit greater mortgage funds for this key product that has helped ten of thousands of families buy an affordable home."
Jackie Bennett, head of policy for CML, added: "Shared ownership lending is more complex than mainstream mortgage products and requires a good level of communication and awareness from all parties involved."
