Affordable housing

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Lloyds Banking Group is one of the largest lenders to the Affordable Housing sector, the primary brand is Halifax Intermediaries. It is the responsibility of the conveyancer acting for us, and usually the purchaser, to check the Affordable Housing agreement for compliance with our policy. To assist this check we provide the conveyancer with our Affordable Housing Guidance Notes together with their Loan Instructions.

We include all Shared Equity schemes within our Affordable Housing proposition. It has been necessary to revise these Guidance Notes to reflect MMR requirements, a copy of the revised Notes are attached. The most significant change is to the term requirements for a Shared Equity equity loan as this must be equal to or greater than the term of our first charge (4.3.3). We are also changing the way that conveyancers obtain these Guidance Notes. Instead of sending a copy directly to the conveyancer they will in future be directed to the CML Handbook where they will be able to view and download a copy.

We would like to ask for your help in embedding this change by reminding all conveyancers acting for your clients purchasing under Affordable Housing schemes to obtain their Guidance Notes from the CML Handbook as this version will be more up to date than the ones enclosed with their Loan Instructions.

We have introduced a range of products specifically designed for your shared equity and shared ownership clients, with incentives tailored to your clients' specific needs.

Example:

Full market valuation - £100,000
Equity share being purchased 75% - £75,000
Client deposit required - £5000 (5% of £100,000)

Homemover and first-time buyer clients

Your shared equity clients must provide a 5% personal deposit in addition to any deposit contribution from the builder or housing association, and the term of the mortgage must be shorter than or equal to the equity loan term.

Remortgage clients

For Shared Equity - the customer must provide a minimum 15% deposit themselves. The Equity Loan term must be equal to or greater than the mortgage term. Lending to repay all or part of the Equity Loan is allowed, although other debt consolidation reasons are not allowed.

For Shared ownership - the maximum LTV for customers remortgaging to Halifax is 85%, and is calculated on the current valuation of their share. The maximum LTV is 85% of the value of the part owned by the customer.


Benefits for your clients

  • Fixed rates - provides your clients with the security their payments will remain the same, so they can manage their budget more easily.
  • High LTV – we can lend  up to 95% of the purchase price for shared equity customers

Risks

Borrowing is secured against your client's home


Our tracker rate mortgages are linked to Bank of England bank rate (also known as Bank of England repo rate). Details of this rate can be found on the Bank of England website at www.bankofengland.co.uk.

For independent information on mortgages, visit the website 'Money Advice Service'.

If you do not have professional experience, you should not rely on the information contained in this communication. If you are a professional and you reproduce any part of the information contained in this communication, to be used with or to advise retail clients, you must ensure it conforms to the Financial Conduct Authority's advising and selling rules. This site is intended for UK residents unless otherwise stated.

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