However, elderly borrowers who took shared appreciation mortgages
have built up hundreds of thousands of pounds of debt and can hardly afford their bills.
They were all sold controversial Shared Appreciation Mortgages
(SAMS) by Barclays and Bank of Scotland in the late 1990s.
A shared appreciation mortgage
gives borrowers low interest rates in exchange for giving the lender a share of future house price appreciation.
The shared appreciation mortgage
has been designed to suit the needs of older homeowners who have a requirement for equity release.
The SAM, or SHARED APPRECIATION MORTGAGE
, is another variation, allowing people to borrow or raise money at a fixed rate for either home improvements or creating an income in retirement.
Shared appreciation mortgages
are being discussed as tools for restructuring distressed loans and instruments to give first-time homebuyers needed financing.
Hilary Messer of RWP Solicitors is representing hundreds of elderly people sold Shared Appreciation Mortgages
in 1997 and 1998.
A group of homeowners with so-called shared appreciation mortgages
took the first step towards suing their lenders yesterday.