25 June 2013
The Ipswich Building Society has launched the first ever self build shared ownership mortgage, in collaboration with Orwell Housing Association, for homes built at Orwell’s project at Philip Avenue in Felixstowe.
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The new mortgage product helps people to part buy/part rent a home – so they can, say, get a mortgage on 70% of the final value of the house; and then rent the other 30%. Later on, if their income increases they can buy more of the home until they own all 100% of it.
People who opt to ‘self finish’ on the site – four, out of a total of ten dwellings – can also take out a smaller mortgage on their new property as the cost will be lower because they are doing a proportion of the ‘finishing’ work themselves . Typically this can reduce the cost by 5-25%.
Ian Brighton, General Manager at the Ipswich Building Society, said: “This mortgage is only currently available through Orwell’s Felixstowe scheme. However,it might be possible to make this kind of product available elsewhere.
“I know there are other local authorities who are interested in this type of mortgage. Cherwell District Council approached us enquiring whether this product could be made available outside of our heartland. It is struggling to get lenders to understand self build shared ownership, so I provided them with a paper that looked at it from a lender’s perspective.
“I’m hoping that other lenders come on board with this kind of scheme.”
The Orwell Housing Association is also working on a similar scheme in Norfolk – on a site at Pointers Field just north of Norwich city centre. The model is similar to Felixstowe with a ‘self finish’ option on a number of homes and the Ipswich Building Society has been asked to make the self build shared ownership mortgage available here too.
Greg Dodds, from Orwell Housing, said: “Norwich City Council was keen to do some sort of self build project, after seeing the initial success of our achievements at Felixstowe.
“We’re working on a mixed site – 12 units, four for self build and eight for rent. This scheme is not as advanced as Felixstowe, in that it doesn’t have planning approval yet, which we hope to get in early July, and the hope is to be on site in September/October.”
