The Joint Equity structure is designed to assist people in buying their own home. This may be first time buyers who cannot save the full deposit needed or get a large enough mortgage for the house they want. It may be for divorced or separated individuals who need to find a new home, or it may be retired renters who have capital but not enough to own a house outright but who do not want to pay rent for their entire retirement.

The basic structure is very simple, the JEIP will jointly buy property with, the Resident Partner, using the tried and tested Joint Equity Partners Contract (the Co-Ownership Deed).

If the Resident Partner has the capital, the deal is simple. On a £140,000 purchase, JEIP puts up £70,000 and the Resident Partner puts up £70,000 to buy the asset.

If the Resident Partner needs a mortgage, then they simply borrow up to 90% of their share or 45% of the total price with the remainder being the Resident Partner’s deposit. If they have a higher deposit they borrow less.

Joint Equity will assist the Resident Partner with their mortgage application, purchase of the asset and all other legal steps that are needed. With Joint Equity’s experience and contacts they can take away a lot of the daunting hurdles some first time buyers encounter. JEIP issues bonds to long term lenders and uses those loans to purchase the JEIP half of each property, thus securing those loans with real assets and pre agreed long term income.

JEIP benefits from any house price rises due to its 50% ownership and throughout the hold period of the asset, the Resident Partner pays a monthly fee to JEIP under the terms of the Partners Contract. These payments rise over time but in fixed and manageable steps clearly stated in the Partners Contract, unlike renting where rents can rise faster than the occupier’s ability to pay.