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Product matters – Simon Webster

Places for People and the Co-operative Bank in conjunction with HomeBuy have come up with something for those trying to get on to the housing ladder.

Perhaps surprisingly as Gordon’s mob are involved, it is really rather good.

Their timing is pretty good, too, as we have recently seen at least 40 per cent of the capacity in the UK mortgage market disappear overnight coupled with a universal move to risk-based pricing – which sees those with money being offered better terms than those without.

While this may be commercially prudent, one could certainly argue that it is socially undesirable.

Own Home targets key workers, those in social housing and, crucially, first-time buyers and all must have a family income of less than £60,000 a year.

It offers a fee-free loan of up to 100 per cent in two tranches – between 20 per cent and 40 per cent interest-free for the first five years, with subsidised, interest-only payments thereafter to PfP, with the balance advanced by the Co-op at commercial rates – several are available.

There is also the option to repay capital to PfP as well when the borrower has the capacity. The product is available direct or through HomeBuy agents.

With lenders repricing deals more quickly than Darling can think of new ways to tax us, I do wonder if the deal I describe above will still be around by the time you get this. I rather hope it is.

Simon Webster is managing director of Facts & Figures Financial Planners

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