Scenario 1

The purchaser wishes to buy an apartment which has a price of £200,000 using our SHARED EQUITY MODEL. The purchaser would pay to Westpoint £150,000 (which is 75% of the price) and would own the property with Westpoint taking a second charge on the outstanding balance (i.e., 25%).

5 years later the purchaser decides to sell the property.
Westpoint and the purchaser appoint a surveyor to work out the open market value and we are advised that it is £230,000.

The purchaser would pay to Westpoint 25% of £230,000 = £57,500

In essence, what has happened is that Westpoint have had their original £50,000 stake paid back to them and a further £7,500 as a result of the property's value rising by £30,000 over the 5 year period, hence the overall payment of £57,500.

Scenario 2

The purchaser wishes to sell the property in 5 years time. Westpoint and the purchaser appoint a surveyor to work out the open market value and we are advised that it is £200,000. (The same price as the original price on day 1)

The purchaser would pay to Westpoint 25% of £200,000 = £50,000

Scenario 3

The purchaser wishes to sell the property in 5 years time. Westpoint and the purchaser appoint a surveyor to work out the open market value and we are advised that it is less than the original £200,000, and is in fact £180,000. (Unlikely to happen but important to understand the outcome in this scenario)

The purchaser would pay to Westpoint 25% of £180,000 = £45,000

Scenario 4

What would happen in the scenario whereby a purchaser approaches Westpoint after 2 years and wishes to pay the outstanding balance?

Westpoint and the purchaser appoint a surveyor to work out the open market value and we are advised that it is £210,000.

The purchaser would pay to Westpoint 25% of £210,000 = £52,500 thus triggering the deletion of Westpoint Homes' second charge on the property.

Scenario 5

What would happen in the scenario whereby a purchaser approaches Westpoint after 2 years and wishes to pay the outstanding balance where the price has actually dropped?

Westpoint and the purchaser appoint a surveyor to work out the open market value and we are advised that it is £180,000 in year 2.

The purchaser would pay to Westpoint 25% of £180,000 = £45,000 thus triggering the deletion of Westpoint Homes' second charge on the property.