Can I get a decent shared ownership mortgage?

Q I am the proud owner of a 50% shared ownership property in Cambridge, the other 50% being owned by a local housing association. I've lived there for nearly two and a half years and have spent a few months this year trying to remortgage my house.

I have had great problems finding a new mortgage lender. Most will not consider lending to me and many of the best rates are unavailable. I find this odd, as the government is pushing for more of this type of property to be built, to help people like myself, who cannot afford to buy a whole property in an expensive area.

We are supposedly living in affordable properties, yet end up paying higher interest rates on our mortgages, plus a monthly lease. We are also treated as bad risks, as we have a smaller share of equity in the property - yet I am in full-time employment, always pay my mortgage on time and am trying to borrow an amount that is much less than 3.5 times my salary.

I have actually found a mortgage lender willing to lend to me at a slightly lower rate than my current provider, the Halifax. However, it has taken me since the beginning of August to get a correct mortgage offer from them, due to a catalogue of errors. First they completely disregarded the 50% share and valued the whole house as being worth ?100,000 - the value of the 50% share (which reflects a total lack of knowledge of property prices in Cambridge) and then issued a new value for the whole house: the same as when I purchased it over two years ago, failing to reflect the trends in the property market since then.

The latest valuation that I've had still reflects the value of the whole house rather than the 50% that is mine to sell and furthermore, the 50% is actually worth more on the open market, rather than the whole, as hardly any property, let alone a two-bed house, is available in Cambridge for the 50% price of around ?100,000. Valuing the property in this way will make my mortgage more expensive, as it diminishes my equity in the property.

Am I stuck with this situation or are there any specialist mortgage advisers for people in my position? Is there any way that we can influence a wider range of banks and building societies to lend to us and to value on the market value of the share, rather than the whole?

FDW

A No you are not stuck with the situation you describe because there are nearly twenty lenders which specialise in mortgages for people in shared ownership schemes, and which - contrary to your experience - do not view shared ownership borrowers differently from any other borrower.

The biggest lender in the shared-ownership market is the Nationwide building society, which makes its full range of mortgage products available to shared ownership borrowers and which, for remortgages will lend up to 90% of its valuation of your share of the property. You could also pop into a branch of the Cambridge building society (which specifically asked me to point out that it lends only in East Anglia) which is also active in the shared ownership market and which, like the Nationwide, also offers its full range of mortgage products.

Subject to a detailed evaluation of your application by its specialist mortgage people the Cambridge building society may be prepared to lend up to 95% of the mortgage valuation. Other lenders which, according to Moneyfacts, specialise in shared ownership lending include big names such as Abbey, Barclays and the Woolwich as well as less well known local building societies such as the Ipswich, Lambeth and Saffron Walden.

As far as persuading lenders to value property in the way you would like them to goes, I'm afraid you haven't got a hope. Market value and a valuation for the purposes of advancing you a loan are two very different things. The former is what the property might sell for while the latter is a check to ensure that the lender won't be out of pocket if you default on your mortgage repayments and the property has to be repossessed. And the mortgage valuation is invariably lower than the market value whether the property is in shared ownership or not.