Anyone heard or used proportunity?

[allofthetings]

My sister is looking at them to try and help her but in London. It seems similar to shared ownership - but I'm hoping less ridged?
Has anyone used them, is it too good to be true? Or the opposite?

It's the only way she can buy in London, she can't move out as she's a Londoner - and it's the only place she feels home/comfortable.

What’s her salary and deposit? Depending on area she may find a small flat for cheaper than assumed. I’ve not heard of this company but wouldn’t recommend any buying schemes. Shared ownership in particular, there is very little benefit over renting

She knows how to use rightmove, shes single, she doesn't have a massive salary or a massive deposit, no rich relatives & shes not particularly young.
she's only looking at buying with help because otherwise she will never get her foot on the ladder.
She knows it's not ideal, but that's her situation.

I know the co-founders well through the fintech start up community. It’s a challenger shared equity scheme in the same way that the government’s Help to Buy is, but can be applied to non-new build properties. At least three high street lenders have signed up to work with buyers using Proportunity loans. A relatively high interest rate is payable on the equity loan taken out which needs to be paid back at the end of the term with a proportionate increase in value on top.

For that reason, it’s not “ideal” - but for many young Londoners (and I believe they currently only offer on London properties) it may well be the only way to buy any kind of property and provided you understand the implications of the equity loan and take financial advice, there’s no reason to fear it.

There are a number of fintech challengers hot on Proportunity’s heels with their own version of this scheme, so I think they’ll become more commonplace during the next couple of years.

To add, it isn’t a shared ownership scheme, where rent is payable to the housing association for the share of the property you don’t own. The buyer owns the whole property with a mortgage and additional charge from Proportunity.

Thanks for that @ComtesseDeSpair - how high is the interest rate? I can't seem to find out on their website?

@allofthetings - Off-hand I couldn’t say - I’m not involved with the company, I just know its founders and the premise. I found the attached on their website which suggests an interest-only loan starting at 6% - but I know from having spoken to them about the model that the idea is that they use fintech analytics to gauge the areas of London most likely to increase in value and the more likely your property is to do so, the lower the interest rate (because they are banking on a greater return when you pay off the loan with the proportionate value increase on top.)

Thanks Comtesse, that's a hell of an interest rate! Especially as they get a share of the property value too.