Could this be the next craze in the booming world of buy-to-let? A new lender backed by one of the world's biggest private equity firms is offering loans to buy-to-let landlords worth up to 20% of the value of the property, with no interest to pay. But on the sale of the property the lender takes a large chunk of the capital gain.
First-time buyers though, can wave goodbye to the chance of obtaining a free loan as the lender,
For every 1% of the value of a property that it lends against,
For example, let's say a landlord buys a house for pounds 220,000 and takes a loan worth 10% (pounds 22,000) from
Loans which take a share of the gain on sale have a chequered history in
Buy-to-let has rebounded strongly after loans all but disappeared during the financial crisis. In 2013 lenders gave landlords loans worth pounds 20.7bn, a 32% increase on 2012. This compares to the pounds 92.7bn, lent to first-time buyers, which was up 15% compared to 2012.
Takings by a bank for its share of a loan made to an elderly couple on the value of their home
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