Banks ”prejudiced against shared-ownership home purchasers”
Banks” prejudice is proving to be of detriment to the social housing sector, a leading organisation claims.
The National Housing Federation (NHF) states that many banks are refusing to lend money to first-time buyers and key workers looking to purchase shared ownership homes as they believe these are likely to result in sub-prime deals.
Consequently, an estimated £500 million of what the NHF claims is valid business on shared ownership properties was turned down, those with jobs in housing may be interested to hear, meaning that some 9,000 low-cost homes were left vacant.
"Lenders are now reluctant to provide mortgages for shared ownership, because of a prejudiced assumption that its buyers – people on low and moderate incomes – are more likely to default on their mortgages," David Orr, NHF chief executive, claims.
As such, he claims thousands of low-income households are being denied the chance to part-purchase a home despite the fact that they have a good credit rating.
Meanwhile, the federation claimed that although the government announced in last month’’s Budget that £1 billion will be invested into kick-starting the housing market, greater investment is required as it called for 100,000 new social homes to be built over the next two years.
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