Barclays Bank and BoS both launched shared appreciation mortgage propositions in the 1990s, in an effort to help older borrowers with home ownership.
However, following criticism over the scheme, Barclays has taken the decision to offer a hardship scheme to those affected, with calls for BoS to follow suit.
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As part of the scheme, borrowers were able to borrow a quarter of the value of the property. However, when the property was sold, the scheme meant that borrowers had to also pay back 75 per cent of the increase in property value. With escalating house prices over the past decade, one borrower who borrowed £20,000 from Barclays was forced to pay back over £96,000 when he sold the property.
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The schemes were sold directly from Barclays, while those that took out the scheme with the BoS did so through independent financial advisers.
Commenting on the situation, Ross Keany, associate director of group communications at BoS, said: “We have always said that if one of our customers has got into financial difficulties because of the shared appreciation product then they should come and talk to us. We would provide help on an individual basis, as we would for every other customer who is having problems, to try and sort the situation out.”
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