£135,000 apartment for £101,250

Robert_Sterling_3

This is a new one on me.

One bedroom apartments for sale at Town Wharf Grays Essex.

You pay 75% of the price before you move in.
You then own the whole of the property.
Then you pay 25% of the value of the property when you sell.
You do not pay rent on the 25%

deemy2004

Its means that the market price is £101,250

And the rest is bull to entice buyers into purchasing.

Robert_Sterling_3

I think the offer has a lot more to it than you are suggesting.

m00nie

its just another offer builders etc are now using, in our local paper today loads of the big builders were offering this.

1 of them stated you had to pay it back after 15 years.

remember also the remaining 25% is at whatever the value is at the time of paying back. ie if the property is then worth £200000 you pay back £50000.

musey

Does that mean if it's worth less that they will repay you?

dippy

The builders are taking a risk that 15 years on, day for day, after the completion of the sale, the house prices will be the same or higher. There is always a risk that a recession/crash may happen shortly before the 15 years are over.

As they're not charging rent !!!!!! interest on the 25%, it means that they did not seriously think they could get the 25%, i.e. £135,000 full price, in the first place. It's more likely that they find they can't shift enough houses at £135,000 and they're taking it as a hit on the sale and as a shot for nothing (depending on the probability they assign to house prices being higher in the future).

The good news for people who are not so interested in making full profit on the future sale of their houses is that they can buy houses for cheaper ;D

dougk_2

When I looked into one of these deals (I was not serious about buying , just nosey about how it worked!), the terms were to pay back the 25% of the original price or 25% of the sale price , whichever the higher. This one had a 10 year maximum repayment period. There were also some admin fees involved (circa £250)

I suspect if you were offering cash you would not have paid the full asking price either.