The proposed mortgage would offer a group of friends a joint mortgage to improve their affordability and buying power.
But Malone said it was an “obvious attempt to spin Shapps’ PR profile and wouldn’t really help first-time buyers.
Malone said: “Mates mortgages will be an absolute nightmare when buyers try to extricate themselves from legally binding contracts. I’d like to know whether Mr Shapps would consider getting one.
“People’s circumstances change in a very a short period of time and if you have a group of friends unequally committed it’ll be a nightmare if one person loses their job for instance. You have to be so, so sure about people’s circumstances and their future circumstances.
“What if after a year one person wants to move out of the shared house and in with their partner?”
Earlier this month Shapps proposed the idea of mates mortgages as a way to help get first-time buyers on the property ladder.
He said: “If there are mates who are perfectly capable of paying monthly mortgage payments but are struggling to fund a deposit of their own, there should be straightforward options to unite with their friends and take the first step on to the housing ladder together.”
Britannia is one of a small number of lenders that allows up to four friends to buy together through its share to buy scheme.
Just 1,300 borrowers have taken the loan.
Housing Minister Grant Shapps said: II'm delighted that progress has been made since the first summit I called to help first time buyers. More mortgage products are now available, and lenders, housebuilders and councils are cooperating better with each other to offer a range of options to prospective homeowners.
"But much more still needs to be done. 'Mates mortgages' are one option I would like to see explored. If there are mates who are perfectly capable of paying monthly mortgage payments but are struggling to fund a deposit on their own, there should be straightforward options to unite with their friends and take the first step onto the housing ladder together.
"That's why I have once again called on key figures from across the housing market to come together and discuss ways to improve the availability of mortgages, and how existing products can be promoted much better.
"I also want to discuss how the improved service being offered to first time buyers by Lloyd's can be replicated across the sector. Eight out of ten aspiring homeowners under 30 can't get on the ladder without help from the Bank of Mum and Dad. So it is vital that every option to increase the availability of mortgages is pursued, so we don't lock a generation of young people out of the housing market."
