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Tes Tickle

Shared Equity One Way Bet

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Is this a new scam?


The Share to be paid back is to be paid at the market value at the time and cannot be lower than the price originally paid

Heads they win, tails you lose.  How is this even legal?  If it's a loan then it appears to have an infinitely variable interest rate.  The price for 75% is about the going price for 100% anyway, it's a newbuild 2-bed shoebox.

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It seems we are literally going to try every single possible trick in the book besides let house prices drop!

As with Help to Buy, the question always remains who's going to buy it off the potential buyer at "market" price, given the original buyer clearly can't afford it themselves either.

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I'll clarify.  Shared equity is nothing new.  The new part, to me at least, is that if the value of their share in the house rises then they'll take that extra money from the householder when they sell.  But if the value of their share falls then they'll require the householder to pay their loss.  They only ever win, or at least never lose, all at the householder's expense.

If it's shared equity then it appears that they're saying that their percentage share will automatically increase if the value of the house falls.

If it's a loan then it's at an interest rate that's infinitely variable, based on the unknown future selling price of the house.

Surely (I'd hope) these deals should be designated as being a percentage or an amount, not some cooked-up mongrel of the two, skewed entirely in one party's favour?

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It doesn't say if you have to rent the shared part. If not, it is interest free, and therefore a reasonable deal. However, the devil is always in the detail!

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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