1st Time Buyer - Buying Incentives?

Fuzzb_2

Hi there,

I have been lurking around these forums for a while now and thought now would be a good time to register

At the weekend I was looking around property to buy, and I noticed several interesting deals.

The first one was for Barret's Homes, and they were offering 5% of the value of the property towards the mortgage deposit and then another 5% (of the initial price) upon completion.

The second offer was for Westbury Homes whereby you only pay 75% of the value of the property, and then 25% of the value of the property in 10 years time or upon sale of the property - whichever is sooner.

Whilst I can appreciate that 25% in 10 years time is certainly going to be a lot more than 25% at the time of purchase, the other 75% should have hopefully increased enough to cover this. Going by a modest 5% annual increase it would cover it. One question about this though - is the mortgage based upon the 75%, or the total value of the house at the time of purchase?

Does anyone know of any other similar deals at the moment that would help the initial purchase of a house. With the 75% offer above I could afford a house rather than a pokey apartment which I am favouring.

Thanks in advance.

gallygirl

The way I understand it is that you purchase 75% by any means, cash or mortgage, and the builder owns the rest. When you sell he gets 25% of the sale price. You can also opt to buy the remaining 25% at any time, based on 25% of the value at the time.

This is much better than most shared ownership schemes as there is no rent or interest payable on the 25%.

Sounds great, however, watch for:

- is there anything to stop you buying the 25% at a time to suit you (e.g. if prices really do plummet & you could raise the funds could you buy the 25% at less than the original price? I suspect not)

- can they call the 25% in at any time?

- what reassurance is there if they go bust that you won't have to fork up 25% to the creditors at a time you may not be able to afford?

- yes, you can live in a house above your current means, but watch out if house prices rise - the differential will continue to rise - ok if you always find schemes like this but, even if you could, this would restrict your choice.

- are you paying a premium for the house because of this scheme? (I didn't think so when I looked at their house.)

Hope thsi helps and doesn't confuse you even more!!!

Fuzzb_2

Thanks for the reply. As I understand it, the 25% can only be called in after 10 years or when you sell the property. I haven't got the full terms & conditions yet, so I will scrutinise them closely.

As for whether they are significantly marked up - most of the property in the area is around £240,000 for a 3 bedroom house and £150,000 for a 2 bedroom apartment. In fact, the Westbury homes are a lot nicer and roomier than some Barrett houses we saw in the same area and they were the same price - albeit with 10% off effectively.

At the moment my girlfriend and me are living with her parents, allowing us to save up towards a deposit. Whilst this is a 'cushy' position to be in at the moment, I would really like to buy my own property and have our own space.

It's just a big nightmare to be honest, how or why a pile of bricks and mortar should cost so much is beyond me