People who currently rent a property and are unable to buy their own home for various reasons may soon be able to own 50 per cent of their own home thanks to a new scheme introduced by a property investment company.
Joint Equity Investment LLP has run a pilot scheme during the last five years, and 21 buyers have been able to secure a property. Currently, the scheme is operating in the East Anglia, Buckinghamshire and Bedfordshire, although the company plans to offer the scheme across the UK.
The investment company wants to help those who are trapped in renting, perhaps unable to save a deposit or divorced or retired. To qualify for the scheme, buyers will need to raise just five per cent deposit and be able to borrow 45 per cent of the property’s value. Prior to being accepted for the 50-50 ownership scheme, buyers will have to spend time with a CeMAP qualified mortgage adviser, who will make sure that they are unable to get a 100 per cent mortgage and don’t qualify for any assistance from a housing association.
According to Joint Equity, there are more than 1,000 people waiting to invest in the scheme. Although investment in mini bonds isn’t the most flexible investment as the initial amount can’t be withdrawn early, the rewards are generous, usually offering the initial investment plus interest. The company believes that there will be demand for around 250,000 homes in the UK. Measures will be put in place to make sure that the scheme doesn’t encourage people to take on extra debts, and that it really is the best option.