Shared-equity loans draw buyers to new Reykjavik apartments

Five purchase offers have been accepted for new apartments in Reykjavik being sold with shared-equity loans, mbl.is reports. The homes are in Stefnisvogur, where most apartments in the development had already sold before nine loan-eligible units were put on the market last week.

The nine apartments comprise eight in Stefnisvogur 38-44 and one in Stefnisvogur 3. They range from 62.4 to 104.1 square metres and are priced from 64 million to 80.5 million. Seven cost 80.5 million, the maximum price set by the Housing, Construction and Planning Authority for three-bedroom homes 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. Borrowers pay neither interest nor instalments, but the loan amount moves in line with the property’s value. Repayment is due when the apartment is sold or the loan term ends.

Páll Edwald, chief legal officer at Reir Verk, said the company began selling apartments in Stefnisvogur 38-46 in September last year, as the buildings were nearing completion. He said many people had already expressed interest, prompting the early launch.

Reir Verk also introduced a purchase option called REIR20, under which buyers contribute at least 10 per cent of the price and the REIR20 fund, managed by Stefnir, contributes up to 20 per cent. Edwald said similar options were later offered by other developers.

The Stefnisvogur development is part of Vogabyggð in Reykjavik. Its 38-46 buildings comprise 82 apartments in four stairwells, with a shared underground car park. The apartments eligible for shared-equity loans in Stefnisvogur 3 and 38-44 do not include parking spaces. A new open car park with nearly 50 spaces has been approved beneath the garage at Stefnisvogur 7 and 9, where spaces will be available to rent.