Tuesday, Nov 13, 2007
Bovis offering enticement of a £55000 interest free loan for five years
Bovis Homes: Own 100% of your property for just 75% of the price upfront
This sounds like last-ditch desperation from the homebuilders. This is a shared equity scheme (should be shared liability surely?) where Bovis sells you a new property at 75% of the price. They retain 25% of the ownership which has to be purchased within 10 years. There is no interest to pay for 5 years and then very low (3%) after that. One example given is a Townhouse "worth" £220K but it's yours for only £165K. Just pay the extra £55K in five years and pay no interest. Assuming Bovis foregoes 6% of interest on that amount, it is costing them £18.6K if balance is paid for after 5 years or £34.7K if balance is paid after 10 years. And I didn't even include the loss of equity (you pay 25% of the value at the time the balance is purchased).
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