Shared-equity loans draw buyers to new Reykjavík apartments

Interest in buying new apartments with shared-equity loans is strong at Stefnisvogur in Reykjavík, where five of nine eligible homes have already received accepted offers, mbl.is reported. Most apartments in the development had been sold before the nine were advertised last week, according to Páll Edwald, chief legal officer at Reir Verk.

The homes are in Stefnisvogur, part of the Vogabyggð development in Reykjavík. Eight of the apartments are at Stefnisvogur 38-44 and one is at Stefnisvogur 3. They range from 62.4 to 104.1 square metres and cost between 64 million and 80.5 million. Seven of the nine are priced at 80.5 million, the maximum set by the Housing, Construction and Planning Authority for three-bedroom apartments eligible for the scheme.

Shared-equity loans are available to first-time buyers and people who have not owned an apartment in the past five years. They carry no interest or repayments, and the loan amount changes in line with the property’s value. The loan must be repaid when the apartment is sold or when the loan term ends.

The Stefnisvogur 38-46 apartment complex has 82 homes across four stairwells and a shared underground car park. The apartments eligible for shared-equity loans at Stefnisvogur 3 and 38-44 do not include parking spaces. Edwald said approval had recently been granted for an additional open car park, with nearly 50 spaces, beneath the car park at Stefnisvogur 7 and 9. Spaces there will be available to rent.

Reir Verk began selling apartments at Stefnisvogur 38-46 in September last year, as construction was nearing completion. Edwald said the company started sales earlier than it had on previous projects because of strong interest. At the same time, it introduced REIR20, a purchase option under which buyers contribute at least 10 per cent of the price and the REIR20 fund, operated by Stefnir, contributes up to 20 per cent. Edwald said similar options were later offered by other builders.

Construction has also begun on Stefnisvogur 56, the final apartment complex on the street. It is planned to have its own car park.