deano87
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Registered: 21st Oct 06
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Tomorrow night I am going to a Taylor Wimpey "Help to Buy" event at a local new development. I don't think there are any properties suitable for us up there but I also want to ask them about the next phase of development. I'm going more to pick their brains about the scheme, find out if me an the Mrs are potentially eligible etc...
Does anyone have any experiences of the latest Help to Buy scheme (I suspect not as it is early days)?
It's the one which the builder doesn't help with, instead it is an up to 20% equity loan from the government which is interest free for 5 years then you only pay an annual fee of 1.75% at the start of the 6th year which "rises annual by RPI inflation plus 1%".
Is there any good mortgage blog or review sites out there where I can do a bit of research on the scheme and want some IFA's think?!
[Edited on 03-06-2013 by deano87]
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deano87
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This is interesting.
quote:
The 2.54% two-year fix is just one of three Help to Buy deals on offer from Nationwide. The others are a low-fee deal, where the charges are just £99 rather than £499, but the rate is set at 2.94% (2.84% for existing borrowers) and a three-year fixed rate at 2.64%, or 2.54% for existing borrowers. The three-year deal has a fee of £900 for movers or £400 for first-time buyers, plus a £99 booking fee.
The 2.54% rate beats any other available to borrowers with a 5% deposit, according to financial information firm Moneyfacts, and is less than half that charged on conventional 95% loans. On Nationwide's existing Save to Buy deal, where borrowers can get a 95% loan if they save into an account for at least six months, the rate is 5.34%.
What does it mean in terms of monthly repayments? If a Help to Buy borrower takes out the Nationwide 2.54% deal and borrows £120,000 over 25 years, he or she will have to pay just £541 a month, compared to £725 using the society's Save to Buy scheme.
http://www.guardian.co.uk/money/2013/jun/01/nationwide-first-time-buyers-record-low-rate
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pow
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Registered: 11th Sep 06
Location: Hazlemere, Buckinghamshire
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All well and good but when that lovely low rate runs out in 3 years time will you struggle to make the repayments.
Deano, I mean this in the nicest way, but, you spend soo much time thinking about if you can afford to move out that I don't think you can. I think you need to keep saving until you and Lily have the money and a few pennies to spare to move out.
I'm on about 30% of a deposit for a 2 bed house near me but I'm still waiting to get 40 or maybe even 50.
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deano87
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quote:
Originally posted by pow
All well and good but when that lovely low rate runs out in 3 years time will you struggle to make the repayments.
Deano, I mean this in the nicest way, but, you spend soo much time thinking about if you can afford to move out that I don't think you can. I think you need to keep saving until you and Lily have the money and a few pennies to spare to move out.
I'm on about 30% of a deposit for a 2 bed house near me but I'm still waiting to get 40 or maybe even 50.
With ref the low rate runnig out, one would assume you an remortgage for a better rate, be earning more or imagine base rate hasn't gone up much. Don't most people run the risk of having a low intro rate then going on a higher variable at the end of the term thus "not being able to make the repayments".
And I only do a lot of thinking because I explore all possible avenues.
My sisters deposit wasn't too hefty (10-15%) and she's a single occpuant earning less than mine and Lilys joint. Does alright for herself.
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Haimsey
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Registered: 8th May 05
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Thing is, HTB pulls in a lot of young people who only see the short term.
The 20% government help will remain at 20% even when the house they helped you buy falls flat, depreciates greatly and is already over inflated due to the developers squeezing the market and offering houses at unrealistic prices.
You then see how it's getting closer to negative equity because they gave you 20% too easily, a lovely low deposit amount mortgage, the repayments aren't possible and the house needs to be sold.
You can't afford to sell due to the costs involved and as a result your first time buying experience has landed you on the wrong path straight off within 5 years.
IMO - which is biased as I see this so often (in fairness not always with a HTB involved).
Or, it could work out beautifully!
Marcy Marc 
White Sport Progress Thread
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AndyKent
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Said it before and I'll say it again, any form of input from the government is a way of falsely propping up the property market and in the end lining the pockets of developers.
Want to make houses affordable? Drop asking prices. Simple.
All this help to buy crap is just making houses as expensive as they always were with a thin layer of 'help' laid over the top.
You need a proper deposit, plain and simple. And don't buy a new home from a developer, you'll almost certain go into negative equity for a few years leaving you trapped.
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deano87
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I certainly don't see the short term as it would allow us to buy a "forever home" to a certain extent, e.g. 2 beds and garden. But my main biggest question is what happens with that 20%. In some respects it is good because it remains dormant, so no repaying in full after 5 years hiking up your monthly outgoings.
But your comments make me 
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AlunJ
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Registered: 3rd Apr 07
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My experience of shared ownership is never again so god knows what this would be like, I'm in a position where I want to sell and I'm going to make a massive loss and be in negative equity. Not allowed to rent it out, I'm stuck.
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Haimsey
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Registered: 8th May 05
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It does suck.
In saving like mad to ensure I can borrow as little as possible.
Like I said, it's crazy how many people get stuck through clear misjudgement.
On the other hand, find nice patents. I see daily 10-40k gifted deposits  sooooo unfair.
Marcy Marc
White Sport Progress Thread
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VrsTurbo
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quote:
Originally posted by AlunJ
My experience of shared ownership is never again so god knows what this would be like, I'm in a position where I want to sell and I'm going to make a massive loss and be in negative equity. Not allowed to rent it out, I'm stuck.
 I know a couple of people whom rent theres out 
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deano87
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Registered: 21st Oct 06
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quote:
Originally posted by AlunJ
My experience of shared ownership is never again so god knows what this would be like, I'm in a position where I want to sell and I'm going to make a massive loss and be in negative equity. Not allowed to rent it out, I'm stuck.
I saw a 2010 post from you in a thread and was going to ask
Help to Buy is slightly different as it is an equity loan and essentially no different to your parents gifting a deposit % and them wanting/needing the money back, except they aren't likely to restrict you moving etc.
I'll certainly get independent advice before actually going down the schemes road but interesting to hear the most negative opinions.
Corsasport. The voice of reason.
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AlunJ
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Registered: 3rd Apr 07
Location: Newport
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quote:
Originally posted by VrsTurbo
quote:
Originally posted by AlunJ
My experience of shared ownership is never again so god knows what this would be like, I'm in a position where I want to sell and I'm going to make a massive loss and be in negative equity. Not allowed to rent it out, I'm stuck.
I know a couple of people whom rent theres out
I've been trying to convince my brother to rent it cheap off me til I can sell it but its on deaf ears lol.
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spencer88
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Registered: 6th Oct 08
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I work for a company who have entered a few JV's with housing companies, namely Linden Homes and Bovis Homes.
They have said that the uptake has been phenomenal. They only had good things to say about it (bit bias, but hey).
it is a good way for people with a lower deposit to be able to afford a home.
Obviously you need to check the figures and what you can afford prior to signing up. Once you understand the government assistance etc, it isn't too bad. It is not an area I have explored so can't offer much help.
but if I was looking for a new home, I would definitely consider it.
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spencer88
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Registered: 6th Oct 08
Location: cornwall
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quote:
Originally posted by AndyKent
Said it before and I'll say it again, any form of input from the government is a way of falsely propping up the property market and in the end lining the pockets of developers.
Want to make houses affordable? Drop asking prices. Simple.
All this help to buy crap is just making houses as expensive as they always were with a thin layer of 'help' laid over the top.
You need a proper deposit, plain and simple. And don't buy a new home from a developer, you'll almost certain go into negative equity for a few years leaving you trapped.
Lining the pocket of developers?
From a development, the people who gain the most for the littlest amount of work are the council/ government.
Developers have been squeezed tight during the recession, hasn't made councils lower the application fees and such to assist the market.
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whitter45
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Registered: 15th Nov 02
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quote:
Originally posted by deano87
I certainly don't see the short term as it would allow us to buy a "forever home" to a certain extent, e.g. 2 beds and garden. But my main biggest question is what happens with that 20%. In some respects it is good because it remains dormant, so no repaying in full after 5 years hiking up your monthly outgoings.
But your comments make me
IMO a forever home is not 2 bedrooms - you will definitely outgrow a 2 bedroom house - even without kids
I would be very wary of the schemes in terms of any limitations on who you can sell to if you decide to sell up i.e does it need to be a FTB etc
[Edited on 04-06-2013 by whitter45]
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deano87
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Sweet bejesus. £175k for a 2 bed house. May be not.
Help to Buy sounds alright though. No real catch other than they own 20%, and that's about it. Free to sell to whomever and you can buy back but minimum buy back is 10%.
That house won't be worth £175k in 5 years unless the market goes mental.
[Edited on 04-06-2013 by deano87]
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Haimsey
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And 20% stays at 20% of purchase price.
Marcy Marc
White Sport Progress Thread
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deano87
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quote:
Originally posted by Haimsey
And 20% stays at 20% of purchase price.
Good point, although she told me value, not original purchase price.
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deano87
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20% of market value when you come to sell, but you cannot accept less than the market value so may make it difficult to sell.
http://www.thisismoney.co.uk/money/mortgageshome/article-2325505/Help-Buy-vs-shared-ownership-Is-leg-property-ladder-worth-it.html
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Cavey
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I bought on the Homebuydirect scheme 3 years ago, we paid 70%, government covered 30%, don't have to pay any back on that till 5 years pass then its 1.5% of that amount (about 85 quid pm) at the moment.
Was a 3/4 bed 3 storey house at 190, neighbours just sold theirs for 217k, its a lovely estate though, and they sold within 3 weeks.
We don't plan on selling anyway, so it should be fine for us for ages yet
[Edited on 04-06-2013 by Cavey]
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deano87
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Registered: 21st Oct 06
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I think you've been lucky. Based on this area a 2 bed terraced house is not going to increase in value if at all!
Or for £179,995 - http://www.rightmove.co.uk/property-for-sale/property-38825353.html
[Edited on 04-06-2013 by deano87]
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Jay
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Location: Liverpool
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New build Houses by me in "the point" for anyone who knows it, have increased in value, don't see why new build automatically means your going to lose money?
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John
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Registered: 30th Jun 03
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New build with inflated prices because of help to buy and the likes will be worth less. New builds that are in desirable areas won't, same as 'old' houses.
Agree with whitter on the 2 bed not being a forever home. Obviously dependant on the individual but I've got more stuff than would fit in 2 rooms and I've only been out of my parents for 2 years. Will be a bit of a pain giving up my room to kids when they come along.
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deano87
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That's why I put the forever home bit in inverted commas. I agree it isn't a forever home but it is more so than a 1 bed flat which would be adequate for our requirements in our current circsumstances.
And I only want a garden for a shed for man tools and my bikes
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Rob_Quads
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Registered: 29th Mar 01
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quote:
Originally posted by deano87
With ref the low rate runnig out, one would assume you an remortgage for a better rate, be earning more or imagine base rate hasn't gone up much. Don't most people run the risk of having a low intro rate then going on a higher variable at the end of the term thus "not being able to make the repayments".
'Most' is probably not quite true. Many people who signed up to deals 3-7 years ago have dropped down to a LOWER rate to that they were fixed on.
While you say "one would assume you an remortgage for a better rate" this sounds easy but the real world it can be far from easy. Who knows what will happen in the future. Lets say the value drops, your LTV drops - you can't get a decent fixed rate mortgage your then stuck on the higher rate.
You have to be prepared to pay that higher amount should it come to it. Don't rely on being about to just down to a low rate otherwise you might find yourself in a crap load of problems.
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