More Homebuy headaches. How petty?

GDB2222

Northants_Simon wrote: »

It's all very well renting until things get better. But due to my age I'm running out of time. Already with every passing month I'm knocking time off my 25 year mortgage. The bank don't want to lend past retirement age.

I don't want to end up being 50 and still renting, I'll only have 15 years left to mortgage over.

Well, I have to wish you the best of luck. It just seems so obvious to me that you'll be able to buy in a year or two for maybe 20%-25% less. So, you'll actually clear your mortgage in half the time (if you make the same payments as you would be on now).

I think you should just stop for an hour or two and take a really hard look at what you are doing. You need to look at the bigger picture - for example, which is more affordable: today's prices spread over 25 years or the prices in two years time spread over 23 years?

Chris2685

I would post my link saying why I decided to rent, but can't find it and the helpful moderators here deleted it from my signature... I was in a similar position to you Simon, and was blinded by the ability to buy. When I looked at the costs though, I realised it is much more sensible to hold off for now...

GDB - How does this rent to homebuy thing work? I am trying to get some info but it seems to be so new that no one really has much info. Can you get your landlord to get in on it, or is it only through HA's? I know the place we are renting they wanted to sell but couldn't at a price that they wanted.

GDB2222

Rent to Homebuy, see here:

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_170934

You pay a discounted rent, and eventually have an option to buy. I think it's mostly for key workers. It sounds like a very good deal, as you pay only 80% of market rent (supposedly, but who decides market rent?), and you don't have to buy the property at the end of the rental period.

Chris2685

I found more info, already looked at the link you posted which has no real useful info... Most homebuy agents don't seem to have much info about it either. It basically looks like subsidised rent, with a right to buy in the future, which is surely what council housing is anyway?

Northants_Simon

GDB2222 wrote: »

Well, I have to wish you the best of luck. It just seems so obvious to me that you'll be able to buy in a year or two for maybe 20%-25% less. So, you'll actually clear your mortgage in half the time (if you make the same payments as you would be on now).

I think you should just stop for an hour or two and take a really hard look at what you are doing. You need to look at the bigger picture - for example, which is more affordable: today's prices spread over 25 years or the prices in two years time spread over 23 years?

I agree entirely with what you are saying. But I'm not sure prices here will drop by another 25%. They haven't dropped by the 13% that everyone claims since last year. Some houses are dropping in price (mostly the less desirable ones like terraced houses, ex council semis and flats). In the area I'm buying houses seem to still sell quickly and for fairly high prices. I'm buying a large 4 bed detached with 2 bathrooms, garage, large garden. I'm paying £194k. That's about the same as they went for in early 2006 and down about £15k on the prices from 2007.

The house I'm buying has the biggest plot on the estate, which is why I'm keen to buy that particular house rather than wait and see what happens on a year or two.

There is also another issue for me, I'm self employed and have to give the past 3 years accounts to get a mortgage. If my income from self employment falls by 10k or so because of the recession I can still afford the mortgage, but and this is the big but, I would then struggle to get a mortgage in future as my profits would be seen to be declining year on year. The bank have already said they won't consider you for a mortgage in that case. They like to see steady profits over 3 years or an increase. It has taken me 10 years to get those 3 years of accounts that are steady.

I'm not buying a house in the hope it will increase in price. I'm buying somewhere to live long term. I don't really care what prices do after I have moved in.

Northants_Simon

The rent to Homebuy seems to be available only in certain areas and limited to keyworkers. I'm not a keyworker and it doesn't look lile it operates in Northamptonshire. It also looks like it is limited to certain properties, amnd that's what I dislike about many of these schemes. I looked at the Newbuild Homebuy and all the houses in my area are 2 or 3 bed terraced houses or town houses. Maybe I'm too fussy, but that's not what I want.