Shared Equity Properties
What are shared equity loans?
Shared equity loan agreements are set up under schemes offered by house builders. They allow people, some who may not otherwise be able to afford the property, to purchase a new home but leave an amount outstanding. The outstanding amount is based on a percentage of the purchase price and typically is between 10 and 30%. The loan is usually interest-free. Some loans provide that interest is only payable if the shared equity occupier is in breach of any conditions of the lease – for example if they fail to repay the loan on time or if they let the property out the loan is secured by a charge on the property which is usually the second charge. This loan is paid back either, at the end of the loan period (if any), when the property is sold or earlier if the homeowner decides to pay off (redeem) the loan. It may also be repayable if a homeowner is in breach of the agreement. The amount repayable is based on the percentage of the market value at the time of sale or redemption. Some agreements provide for a minimum repayment value of the original loan.
*Sometimes we look at the developments before they are completed*
Who are Equity Release Trustees Limited and what do we do?
We have been administering shared equity loan agreements for many years. We pride ourselves on our straight forward, friendly and fair approach. We are easy to contact and experienced in what we do. Equity Release Trustees Limited does not own the second charge mortgages nor do we enter into such arrangements but we administer them on behalf of others. Our portfolio is very geographically diverse with properties up and down the country including Kent, London, the Midlands, Liverpool and Warrington. In Scotland we administer mortgages secured on properties in and around Edinburgh, Glasgow and Ayrshire
We handle any queries that a shared equity occupier may have and will also provide an annual statement as required by the Financial Conduct Authority. On behalf of our clients we deal with the redemption of a loan whether upon a sale, at the end of a loan agreement, or an earlier voluntary redemption. We will agree a valuation on a non sale redemption and can arrange for the removal of the charge on a property once a loan is paid off. Where interest is due we also deal with the interest calculations and statements.
Where a shared equity occupier is unable to pay an amount due under the agreement due to hardship we will make a fair assessment of their situation and agree to a way forward .For a factsheet on hardship produced by the FCA please click here. In 2014 the Government decided that the administration of shared equity loans should be regulated by the FCA. We are regulated by the Financial Conduct Authority for the administration of Shared Equity Loan Agreements. We are not also authorised to enter into equity release home reversion arrangements.