FirstBuy, Newbuy are a disaster waiting to happen

Running_Horse · 3 April 2012 at 7:28AM

Slightly different, but we were offered a 75% shared equity deal for ten years in an area with lots of newbuilds. Several years later we would have been no nearer finding that £40,000, and values have fallen by almost that amount anyway. I really hope we are not setting off a ticking time-bomb with this latest wheeze.

Firthy777 · 26 July 2013 at 12:53PM

From my perspective the FirstBuy scheme (although now discontinued) was a very good one for myself and my partner. We had both just graduated last year and both had good jobs in the pipeline. Instead of paying £700-900/month, paying somebody else's mortgage in rent for the next 3/4/5/6 years, we managed to get a 4.20% 5-year fixed mortgage and get on the FirstBuy scheme. The interest free 5-years borrowing money from the House builder and the government gives us 5-years to effectively 'save-up' for our deposit, which we intend to pay off after the interest free 'term' is up. This scheme has allowed us to at least get on the ladder and save up and pay towards our future instead of somebody else's. Without a doubt if you spend a good few more years saving up for your deposit you will be better off in terms of having to borrow less, get better rates and such like but you will still be paying huge rents all the way up to that time and life's events will take place and the money may be required for other things. Life is one big journey, you have to take these opportunities when they arise. Albeit I wouldn't go near a shared equity scheme. :O

kingstreet · 26 July 2013 at 1:04PM

Firthy777 wrote: »

From my perspective the FirstBuy scheme (although now discontinued) was a very good one for myself and my partner... Albeit I wouldn't go near a shared equity scheme. :O

FirstBuy was shared equity, as is its replacement, Help To Buy - Equity Loan. You don't repay the original £ amount, you repay the % of the property value you borrowed, when you sell, at the end of the term, or voluntarily. That's the "equity" connection.

Perhaps you wouldn't go near shared ownership?

Turnbull2000 · 27 July 2013 at 10:38PM

Maybe so, but you've got no choice if you want you own property, have you? This scheme will likely become permanent, as it's removal will could cause a drop in prices in five years time.

That house prices will rise substantially as a result of all this government support is something thousands of new property buyers will simply have to put up with.

Running_Horse · 28 July 2013 at 8:01AM

This latest in a long line of similar scams will be about as permanent as MIRAS. Why can the government not resist meddling in the housing market? The only intervention should be to stop builders sitting on huge land banks. There is one development here that has had permission for years, but the greedy developers are waiting for prices to rise before building.

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FirstBuy, Newbuy are a disaster waiting to happen

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