More and more schemes are being launched to stimulate the housing market many of which are proving to be controversial. None more so than the “Shared Appreciation Mortgage”. To explain what this is, let’s go back a bit: in the good old days when mum or dad would lend you the 5% deposit to buy your home, you owed mum or dad the amount that was lent to you eg. £5000. As history and family Christmases show, some paid it back and some didn’t. Under the new Shared Appreciation Mortgage, a financial institution lends a first-time buyer a 5% deposit, but the small-print will tell you that you will always owe them 5% of the value of the property rather than the actual amount borrowed. So, whenever you decide to sell the property, you will have to repay 5% of the sale value to the lender. Over ten years, your initial £5000 loan may end up being £10,000 or more. Whilst this may genuinely help people get on the property ladder, the moral of the story is still; work hard, save hard and remember your grandmother’s birthday,
