The lender pulled the plug on shared equity in the middle of March and has since been processing the remainder of its pipeline cases.
Ricky Okey, managing director of intermediary distribution for Abbey and Alliance & Leicester, says: “There are numerous shared equity schemes in the market, which makes it complex for end customers and complex for us to underwrite.
“We are a mass-market business so it is more difficult for us to get involved in niche markets.
“It doesn’t mean we don’t want to be supportive of first-time buyers, but not with this model.”
Abbey still offers shared ownership and will continue to support social housing initiatives.
Royal Bank of Scotland is still a key player in the shared equity market and says it has no plans to withdraw.
Steve Carruthers, head of corporate accounts at RBS Intermediary Partners, this week starts a step-by-step guide to shared equity in Mortgage Strategy.
He says: “The government’s shared equity schemes complement the commitments RBS already has in place. It builds on our promise to support the housing market by making £13.8bn worth of newmortgage lending available across the country.”
It offers mortgages for customers purchasing a home via MyChoiceHomeBuy and HomeBuy Direct, where its lending criteria is met.
In a separate case last week, Abbey also had to decline a number of its mortgage cases because it deemed them too risky.
A spokesman for Abbey says: “To meet the service needs of brokers and that we continue to maintain a steady flow of applications so that brokers don’t receive a slower case decision time, we have undertaken a review of the applications that have been waiting for an underwriting decision up to and including Thursday, March 26.
“The result of this review was that over 1,000 outstanding cases have been accepted and no further underwriting or income verification will be required.
“But there are some cases that have been declined. These cases have been considered fully, but we are unable to offer a mortgage for those clients.”
Abbey says it appreciates some brokers may be disappointed, but the decision was based on the information available to it.
He adds: “Our goal is to keep our agreement in principle as closely aligned to our final risk assessment of an application as possible. But an agreement in principle is just that, and as such constitutes no binding obligation to lend.”