LIFT scheme v shared ownership schemes

Auzelia

would you say these two are pretty much the same?

I am going via the LIFT scheme and only have to pay the mortgage that I take out, but once or if I sell the property I pay back the LIFT scheme people back the %age of the property value that they have lent me. Unless of course I decide to buy back the max thatI can own (80%).

Now I have a friend who has done (is doing) the shared ownership where she has to pay the mortgage that she took out and also the rent. Is this the only difference between the two schemes?

Also why is it that alot of posters do not like the shared ownership scheme?

Cannon_Fodder

The concerns that posters have, include;

- The simple confusion, exhibited by questions like these, caused by the multitude of schemes, that operate differently in different regions/countries, that makes it difficult even to identify which is the best route for any particular individual/couple.

- The ever moving goalposts. One poster discovers funding, but their lender lets them down. Then a lender gives the ok, but funding has since ceased. Which lenders accept those schemes with real gifted deposit elements is a minefield.

- Its a potential wolf in sheeps clothing. 100% mortgages were part of the problem in fuelling the peak 'bubble'. Those who had no equity in 2007 were immediately put into negative equity when the crash hit. Shared Ownership etc acts in a similar way, with the rental/loan/deferred portion being a sort of "gifted deposit" - except that it does need paying for in some way, at some stage, but doesn't insulate you from NE.

- If only able to afford a 50% stake, often with a 30 year mortgage, indicates that to afford a whole property will take 60 years...and that's usually for a starter home, before starting a family requires a move to something bigger, more expensive - but then you fall outside of the scheme, no longer being FTB, so the second house effectively requires a 150% mortgage in the open market.

- Those paying a rental portion might assume they get some of the benefits usually associated with renting - landlords responsible for repairs etc - but that is not the case.


Someone would need to know the exact schemes names/local authorities etc to be able to compare and state the differences. i.e. LIFT has at least two schemes...and there are a multitude of SO schemes.

Abcynthia

My advice would be stick with the Scottish LIFT Scheme as you can then buy out the governments share when you wish to but otherwise won't have to pay anything on that share. This means you can wait until you can afford to and you are just paying your mortgage payments.

Auzelia

Its the LIFT scheme I am doing, though you can only buy back a max of 80% of the property back. (But thats not a problem)

brit1234

Auzelia wrote: »

Its the LIFT scheme I am doing, though you can only buy back a max of 80% of the property back. (But thats not a problem)

Why buy with one of these dodgy schemes. Prices are set to crash again as there is nothing holding them up.

Economists recon the people who bought in 2007 and people buying now are going to be finacially worst off with negative equity.

Be very carefull, no need to rush. It could be a huge mistake tapping you for years like those investors in Northern Ireland being sued by the builders as the values have dropped and they can't get mortgages for the overvalued costs comapired with the actual lower price.

Save and rent would be my advice, these schemes have to many dodgy conditions.

Auzelia

The scheme is not dodgy, nor does it have any dodgy conditions.

The only thing you need to remeber is that depending on the council area you are allowed to buy in you need to stick to their pricing limits. They send an info back with all the documents stating this.

Now is a good time to buy for where I live as houses that where on the market when I first applied for the scheme where taken off the market then re-marketed at a higher value and have sold. (im not saying they sold for the asking price but they have sold). The property I am buying I would not have even been able to get near last year or the year before that due to the house prices. So I am pretty made up.

It seems to me you dont like any of the schemes that are about just now.

craigieboy1

this scheme is a complete waste of time unless you already rent a council house or rent through housing association. i'm not in a position to be able to buy a house, the mortgage offered to me wouldn't buy ANYWHERE in edinburgh and i would have to rely on the lift cheme to give me a help

i received a letter on friday after waiting several months due to firstly, having my application knocked back due to one of my wage slip showing a bit extra in my pay packet due to some overtime i done, even though i had a covering letter from HR to confirm what my annual salary was ,they decided that rather than process the application they threw it out, quite easy for them to do since it was coming up the end of the financial year!

new application was submitted in june minus any overtime, after july i never heard anything from them to say they had received my application, i called them only to be told they didn't have it. after making a complaint they magically found it blaming it on a computer upgrade, was told 13 week turnaround then i would hear back.

got letter in august to say they were still dealing with my application however, they had received a large amount of applications (which is understandable given the fact house prices are still ridiculous in some places) phoned again start of this month to be told i was now in a waiting list and would be dealt with soon.

then boom...


got letter on friday explaining in detail that unless i was in the armed forces, currently renting a council house or renting a housing association house then i wouldn't be treated with any priority and they "apologised" if this wasn't the news i wanted to hear.

pretty angry at this as i feel i have been discriminated against when afterall.. is this scheme not designed to give folk a hand on buying their first home?? yet they are giving priority to people who already have a home from council or housing association? i don't mind being behind the armed forces in the queue (that is not an issue and i welcome that decision) but yet again normal working people get hammered again..

not amused by thier decision and i am now awaiting a response from a letter i have sent to them, however i think it's more likely to be a standard response letter more than a personal letter.

weesie81

craigieboy am sorry to tell you but they have already allocated all the money for edinburgh this year so no more approval letters or "passports" are going to be issued for the east unless people do not use their approvals or they are given more funding (which i must say i doubt)

i am with you on the priorities too, not with the medical conditions or armed forces but for the people in social council housing who in my opinion have far more security as council tenants than i do renting privately and hoping for the best twice a year that my landlord decides not to sell up.

keep at them it may be that someone does not use their approval and you get through that way? the limits are not great would be a push to get anything in my area too for their restricted prices :rolleyes:
good luck

tek-monkey

These schemes can work well, but not for everyone. You need to be sure of what you're getting yourself into, and a lot of these schemes don't seem to give you enough information up front. I am using the ownhome scheme, and if it wasn't for this forum I'd be completely clueless as they just don't seem to publish what you need to know! That is my main problem with the schemes, they just don't seem to be that forthcoming with information you REALLY need to make an informed choice.

brit1234 wrote: »

Why buy with one of these dodgy schemes. Prices are set to crash again as there is nothing holding them up.

Pure speculation, you don't know this. As we have a lack of housing in the UK, I can't see the falls people like you are predicting. You are a potential FTB, who is annoyed you can't afford to buy, so are hoping for a big crash. I am also a potential FTB, using a shared equity scheme to purchase, which colours my perceptions of these schemes. Neither of us knows the future, we're both just speculating.

brit1234 wrote: »

Economists recon the people who bought in 2007 and people buying now are going to be finacially worst off with negative equity.

I showed you my calculations in another thread (find it here), but never got a response. I am genuinely interested in how a shared equity scheme is bad for me, based on the information provided. I will almost definately be in a better position than if I rented and saved for a deposit, so financially I'll be better off?

brit1234 wrote: »

Be very carefull, no need to rush. It could be a huge mistake tapping you for years like those investors in Northern Ireland being sued by the builders as the values have dropped and they can't get mortgages for the overvalued costs comapired with the actual lower price.

Completely unrelated, you are talking about people buying off plan new builds. I fail to see how someone buying a house thats not built for another 2 years at a set price in any way compares to someone buying a house to live in. Besides which, everyone knows new builds are over priced.

brit1234 wrote: »

Save and rent would be my advice, these schemes have to many dodgy conditions.

Many people cannot afford to save enough for a decent deposit whilst also renting (and therefore paying more than a mortgage would be anyway). These schemes can help, if you know what you're doing. If you are buying a home rather than an investment, can afford the payments easily at a fixed rate and think your job is secure, these schemes could well put you 5 years ahead of where you'd be if you waited and saved.

iscrimger

I agree, if you know what you're doing and are either a bit money savvy or sought financial advice then the LIFT scheme is perfect. But it's not for everyone and not everybody is eligible.

There is a list of priorities for those who get approved first. As prices continued to fall the scheme continued to rise in popularity - estate agents and the like also wrongly recommended the scheme to many people. There is no lower or upper salary limit but it's based on what you can afford. If you have a mortgage quote which is 80% or more of the maximum price of a property you can purchase then you will not get approved. You're wage slips will be used to check your income.

If you earn, say £19k per year and pay rent of £425 a month (for example) then I doubt you would be approved as clearly you would have surplus income every month.

This scheme is not designed to help EVERY first time buyer and they've obviously prioritised further due to the huge response.

Also to clarify there are 2 versions of the LIFT scheme. The first is the New Supply Scheme (Purpose built new build) or the Open Market Scheme (Any qualifying home). Certainly in Edinburgh there is evidence that prices are rising because of short supply which means any future buyers on the scheme could be buying something they don't exactly want.

Anyone entering the LIFT scheme should be thinking very carefully about the future and how they pay the LIFT share back. You're first point of call when looking to the future is the increase to an 80% share. If you take a 60% share, in 2 years you will be re-mortgaging and that mortgage has to cover you're existing mortgage plus the 20% of the property value you owe LIFT. (To increase your stake to 80%). You cannot go on forever just owning 60-80% and you are going to have to seriously think about when & how you pay it back. If you cannot foresee any change in income or savings in the next 2-5 years then I would seriously question if entering the scheme is the correct thing to do. There are clearly some going into the scheme with the wrong idea's and sadly it will be them who fall at the hurdle.