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Housing association offering no deposit mortgages posts profit

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Housing association offering no deposit mortgages posts profit

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Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Housing association offering no deposit mortgages posts profit  Housing association offering no deposit mortgages posts profit

One of the UK’s largest housing associations says it has provided 85 mortgages during the last year – worth almost £6.5m – and has made a total of 158 completions since it started offering its own no deposit (100%) mortgage two years ago.

Places for People, which manages over 60,000 homes across the UK, published the details today in its annual report – which showed the group has achieved a profit of £17.4m before tax from a turnover of £369m.

It said it launched the product to ease the current lending restrictions making it difficult for people to buy a home.

The report said: “Through this scheme, we are able to give first-time buyers financial flexibility while generating more property sales.”

Places built 638 mixed tenure homes in 2011/12, 5% of which were for market sale. 

It said it has also administered its no deposit mortgage on behalf of two other housebuilders, which brought them 27 sales, totalling £1.3 million.

The group has also created a number of equity loan products so that buyers can purchase a home using a smaller mortgage. The equity loan, it says, effectively ‘tops up’ the mortgage, enabling a buyer to purchase a home they would not normally be able to afford.

Depending on where the property is bought, the equity loan is either interest free for the first five or 10 years or comes with a low interest rate. This year it sold 21 homes in England and Scotland using these schemes.

Another housing association which has moved into the mortgage market is Gentoo which is buying new homes off housebuilders then offering them to would-be homeowners through a 25-year payment plan, without the need for a deposit or traditional mortgage.

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