Own Home Scheme Pros and Cons

geoffky

if you were not financially !!!!!! you would not go near these EX-schemes...remember the norm is saving a 10 to 20% deposit.....back to normal where people have to save and the i want it now brigade get told that they can not have it now......seems sensible to me...idiots are people who take on too much debt with their meager earnings and savings.......

tressls

themanbearpig wrote: »

Why is it so hard to save a 5% deposit? So what if it takes 3 years?

The most sensible option to take in the current economic climate is to save as much as you can, and buy at the bottom of the market in 3-5 years. Not to buy into these stupid schemes which discourage financial prudence, and encourage people to get into debt over an overvalued asset. Remember mortgages are 25 year loans. By the end of the loan, you would have paid 2-3 times when you have agreed to pay for that property.
These sorts of schemes caused house prices to increase because people forgot the value of money, and were happy to pay more and more for the same thing because the government gave you the thumbs up.

If you want to protest about anything, protest about the poorly regulated rental market. Send letters to your MP and ask why the rental market in this country is so short term, ask why the land lords in this country can increase rents when ever they fell like it and by any amount.

If you are on a low wage you cant afford to build up savings to pay for a deposit for a house, you shouldn't be getting a mortgage, but you definitely shouldn't have to deal with our !!!! rental market and amateur land lords.

Ok so I see your point and on his wage we could only borrow about £65k or less, so if we did find a property of that value we wanted then 5% would be, what, £3250??!?!! Which may be do-able over a few years. Of course, it's gunna be harder saving when you are already running a house and paying all that goes with it.

But the poster before you was rude, and we are not 'financially !!!!!!'. People like that wind me up.

ladybird3

Not everyone applying for this scheme is on a low wage!
I earn above the average income in a very secure job following 3 years at university to get there.
Actually, saving up for a 5% deposit is extremley difficult even if you do get a good wage because the rental market is so inflated and that is not something which is going to change in the immediate future. Perhaps you haven't noticed that most lenders are now asking for at least a 20-25% deposit-pretty hard to save for I would say!

Given the current economic climate as you put it I would say that any fool can see that sticking all your money into savings is not in fact the sensible thing to do! Interest rates are at absolute rock bottom therfeore why put your cash into an account where it will sit and do nothing when there is an opportunity for it to go into bricks and mortar where it's likely in the future there will be a return on?

I think you're absolutely incorrect to say that schemes like this have caused the housing prices increase, aside from the fact that they have only been running for a couple of years I think it's clear to everyone who keeps an eye on any form of financial news that there is a lot more to it than that.

There are many areas in the country where even if the further drop in the market still wouldnt allow people to buy somewhere to live. Perhaps you think that people should move away from the more expensive areas and everyone who cant afford to buy should all move up north to where property is much cheaper? But then I wonder what a neighbourhood do without nurses, policemen, firemen, teachers, etc etc etc. . . . .
These schemes absolutely offer financial prudence. They give working people on average to above average incomes the chance to put there money into a long term investment. For me personally my mortgage payments on this scheme are going to be so low (in fact several hundred pounds less than the rent im paying now) I will be able to save up my excess income to buy into the equity loan-how is that not financially prudent?? I'm sure many other people are planning on doing the same and for those who have definate career progression and hence salary progression it is fantastic.
Perhaps you would prefer that the government spends taxpayers money on increasing social housing to house people who cannot or will not make any sort of financial contribution to society whatsoever? Oh no wait, they're doing that anyway and both the schemes to help first time buyers and keyworkers are being scrapped. You have you wish geoffky! I'm sure you'll be happy to know that your tax is now going towards paying for over a billion pounds of social housing

As for the housing market bottoming out in 3-5 years.. . . . . . . hmmmm think it might be a bit sooner! Anyone agree?

tressls

geoffky wrote: »

if you were not financially !!!!!! you would not go near these EX-schemes...remember the norm is saving a 10 to 20% deposit.....back to normal where people have to save and the i want it now brigade get told that they can not have it now......seems sensible to me...idiots are people who take on too much debt with their meager earnings and savings.......

Well you are clearly posting on this thread to try and make yourself feel better and demean people like me, try and belittle us. Of course, yes it's just SO easy to save 10 or 20% deposits up.. piece of cake! No one said we want it NOW but for some people it's either do it this way or no way, and throw away money renting which could be used to buy a home.

katelu

Final kick in the teeth - the co-op have offered me a £105k mortgage, just what I wanted to buy my dream house when I have the 1st silly mortgage offer but there is no more funding in the North West (and unlikely to ever be any again) and so I am now going to have to spend the next 5 years saving for a house for me and my children or opt for an overpriced new build. Gutted.

tressls

katelu wrote: »

Final kick in the teeth - the co-op have offered me a £105k mortgage, just what I wanted to buy my dream house when I have the 1st silly mortgage offer but there is no more funding in the North West (and unlikely to ever be any again) and so I am now going to have to spend the next 5 years saving for a house for me and my children or opt for an overpriced new build. Gutted.

Gutted for you. I don;t hold much hope out now. While we are on the subject, these other schemes such as HomeBuy Direct- am I right in thinking they still want a deposit?

Is there anythign else out there which you don't have to spend years saving silly money up for whilst renting ?!?!?!!

geoffky

i do not want to kick anyone but a reality check is needed for some..these schemes are bad for everyone apart from the people selling at a overinflated price.They have been stopped now so you will just have to save and save ...you will not think its silly money when you have had the pleasure of saving your own hard earned money..in fact it makes you realize what money is worth...not a bad thing in my opinion.. people who have been earning for years should have a rainy day fund whether they are buying or not..its common sense to have so many months wages saved just in case of redundancy ect ...

tressls

geoffky wrote: »

i do not want to kick anyone but a reality check is needed for some..these schemes are bad for everyone apart from the people selling at a overinflated price.They have been stopped now so you will just have to save and save ...you will not think its silly money when you have had the pleasure of saving your own hard earned money..in fact it makes you realize what money is worth...not a bad thing in my opinion..

but thats the thing... not all of us can save the deposits needed.. ever.. while renting.

hrlevett

tressls wrote: »

Gutted for you. I don;t hold much hope out now. While we are on the subject, these other schemes such as HomeBuy Direct- am I right in thinking they still want a deposit?

Is there anythign else out there which you don't have to spend years saving silly money up for whilst renting ?!?!?!!

this scheme is finished too the money ran out i tried this scheme before ownhome you didnt need a deposit but you needed 3500 saving to pay for fees the only other scheme there is is new build where you have to buy 70% of the house but they are so overpriced and you have to wait for them to be built in your area and then there is probably only going to be afew and 10s of people wanting them the own home and my chioce were such good schemes it is so stupid that they are being stopped all hope is lost that i will own my own home anytime soon

superfran_uk

hrlevett wrote: »

this scheme is finished too the money ran out i tried this scheme before ownhome you didnt need a deposit but you needed 3500 saving to pay for fees the only other scheme there is is new build where you have to buy 70% of the house but they are so overpriced and you have to wait for them to be built in your area and then there is probably only going to be afew and 10s of people wanting them the own home and my chioce were such good schemes it is so stupid that they are being stopped all hope is lost that i will own my own home anytime soon

This is a fullstop - .
Use them.

But yes, although I can see what you are saying geoffky, this scheme is not necessarily aimed at the financially illiterate.

My partner and I were renting (£750+ per month and due to increase) and with our commuting costs as well we were saving but little by little - a few hundred a month maximum.

A 2 bed semi ex-council house in our area is about 190k. Prior to the price decreases, that would have been £200k, but there has been no obvious shift and prices if anything have increased locally in the recent months.

Even just a 10% deposit on this would be 19k, and a 171k mortgage would be simply unnaffordable. The mortgage we have now (128k) is about 825 a month, which is comfortable, but any more would be impossible for us to pay. However, for 128k we would not even get a bedsit where we live. This scheme has allowed us to use our savings to buy a house which we really like and which we could not have afforded otherwise until we had saved approx 60k. Even on a combined income of over 50k, that would take us about 20 years to save - minimum.

I agree it is not for low earners, or people looking for an easy ride. You must have good credit and at least £4k savings, and extra to put into the mortgage if possible (we put a few thousand in - not much but every little helps...), and be realistic about what the scheme can provide.

I am not saying that it is our right to have been helped by this scheme, but it has been a godsend. The only people I know who are under 30 and have bought houses either lived with their parents while they saved (100 mile commute and completely impractical!) or had money left to them in a will. I do not know anyone who has managed to buy with a deposit they have managed to save whilst also renting. Why should that be the case?