Two prominent estate agencies are amongst those piloting a new financial product that allows aspiring buyers to purchase property with just a five per cent deposit.
The Proportunity Loan is described as a Help To Buy-style product, but not restricted to the purchase of new homes, nor to first time buyers. It increases the buying ability of prospective purchasers via a reduced deposit or by extending their borrowing capacity.
It works like this. The Proportunity Loan sits alongside a mainstream lender's loan and can be used to secure a better interest rate on the main mortgage through a reduced Loan To Value. The Proportunity Loan enables the buyer to get financing for up to six times their annual income.
The company gives a case study of a London buyer who, by using the Proportunity product, was able to increase his purchasing ability from £240,000 to £300,000 giving him a choice of 11 properties rather than one in his chosen search area.
The loan has previously only been available via a limited number of mortgage brokers but, following the securing of another £100m for lending purposes, it’s now being extended to selected estate agents.
One of the those trialling the initiative - Jeremy Leaf, who operates the north London agency Jeremy Leaf & Co - says: “We’re very much looking forward to joining this interesting pilot and offering our customers the chance of owning a property which they might not otherwise have been able to afford.”
And Sam Samuel of south London agency Edward Ashdale adds: “There are hundreds of would-be buyers in the market who find themselves just short of being able to finance the purchase of a property and we believe this idea offers a great solution. Makes absolute sense to us and we’re looking forward to providing this to prospective buyers who find themselves just short of reaching their first property, or even bridging the gap for some to get their dream second home.”
Proportunity founder Vadim Toader comments: “This should help the agencies as well as more people will be able to convert from window-shopping to putting their feet on the living room