An award-winning North-East building society has launched a new mortgage proposition aimed at helping people onto the housing ladder through the increasingly popular ‘shared ownership’ scheme.
Darlington Building Society has announced the ‘competitive proposition’ in response to the growth in shared ownership, which is a cross between buying and renting a property.
The Society, named Best Specialist Mortgage Provider in the 2019 British Bank Awards, has nine branches in the North-East and North Yorkshire: Barnard Castle, Bishop Auckland, Darlington, Guisborough, Middlesbrough, Northallerton, Redcar, Stockton and Yarm.
And it has stayed true to the same core objective throughout its 164-year history: “Improving the lives of our members and communities through supporting home ownership and encouraging saving.”
Darren Ditchburn, Chief Customer Officer for DBS, says: “The introduction of the shared ownership product is another way for us to meet that age-old core objective of helping to make the dream of home ownership a reality for people who might think it’s out of reach.”
Under the shared ownership scheme, individuals can purchase a share in a property of between 25 and 75 per cent with a smaller than normal deposit. The remaining share is then rented at affordable rates from a local housing association.
Once the initial share has been purchased, the customer can go on to buy the home outright by purchasing more shares from the housing association through what is known as “staircasing”.
The DBS product, launched at the beginning of February, offers a five-year fixed rate mortgage with up to 95 per cent loan to share. In addition, the Society is not charging any product fee, and will contribute towards the valuation fee.
The new product is only available through the Society’s intermediary channel, Darlington Intermediaries, which is developing key relationships with mortgage brokers both locally and nationwide to provide borrowers with the most cost-effective mortgage options.
DBS becomes the country’s 27th lender in the shared ownership market, but the Society prides itself on being the leading local lender, with strong community connections, and five per cent of net profits after tax being donated to good causes in the areas it serves.
“It is all about lowering the barrier to home ownership – to make achievable what might have seemed unachievable,” said Mr Ditchburn, who has risen up the ranks after starting with DBS as an 18-year-old, working behind the counter at his local branch in Redcar.
“Our aim is to provide the best value product while maintaining that fundamental commitment to go on supporting our local communities through every single transaction.”
Shared ownership is highly likely to become more prevalent – especially amongst first-time buyers – in view of Government plans to phase out of the Help To Buy scheme, which will be pared back from 2021 and stopped in 2023.
Although Help To Buy ISAs were brought to an end to new customers from last November, DBS still has around 1,900 people with savings accounts already opened, and the Society has maintained one of the best rates available in the country exclusively for local people saving for their first home.