Homebuy Direct

Desperatetobuyahouse

I was wondering if anybody has used or knows somebody that has used the Governments Homebuy Direct scheme (100% ownership, 30% equity loan payment free for 5 years...).

My boyfriend and I meet the criteria, in terms of earnings and the fact I am a key worker - just looking for some first hand opinions really.

It seems like a good scheme - probably the only way we will get on the property ladder as a 10% deposit is years and years off which we are not prepared to wait (I was in uni until the age of 24, so beginning saving quite late really).

I would appreciate some first hand advice...THANKS!

poppy10_2

Shared ownership is a scam. Avoid.

getmore4less

Make sure you have an exit plan.

Can you sell the place to anyone?
If not that is a very big risk.

brit1234

getmore4less wrote: »

Make sure you have an exit plan.

Can you sell the place to anyone?
If not that is a very big risk.

It may be as you are likely to go into negative equity having little deposit and due to how much these properties are overvalued.

The scheme is regarded by many a scam, even the BBC have said so.

bodgerx

poppy10 wrote: »

Shared ownership is a scam. Avoid.

Homebuy is different to traditional shared-ownership. You don't get charged rent on the bit which is not your share for a start.

It is actually a half-decent scheme.

brit1234

bodgerx wrote: »

Homebuy is different to traditional shared-ownership. You don't get charged rent on the bit which is not your share for a start.

It is actually a half-decent scheme.

Apart from it bumps up the price a lot on newbuilds. Sorry would rather cut off my hand than vastly over pay using home buy.

Save a deposit instead and don't get trapped in one of these crazy schemes as prices come down to normal.

bodgerx

brit1234 wrote: »

Apart from it bumps up the price a lot on newbuilds. Sorry would rather cut off my hand than vastly over pay using home buy.

Save a deposit instead and don't get trapped in one of these crazy schemes as prices come down to normal.

My brother has just bought under Homebuy. Its a Redrow home, 3-bed, garage. Fantastic house. They managed to get Redrow to come down 5% on the asking, and they are putting 5% down, and getting a great house for less on the mortgage than rent than they were paying on a very average 2-bed flat. They wouldn't have been able to afford it otherwise - he wins. What's the issue?

leveller2911

Its true to say the Homebuy scheme has allowed people to get on the ladder who otherwise wouldn't be able too,but there are no real short cuts to buying a home and IMO if you can't save 10% deposit you shouldn't even be eligable.Its the same old story governments trying to keep the housing market ticking over.

We are also eligable for Homebuy not a "Key worker" (I hate that term, why is a teacher , nurse or Policeman more "KEY" to the nation that say a dustman or shopworker??......We have worked hard and scraped together £35k in savings , still can't afford to buy in our area but still wouldn't go down the homebuy route........

If people are able to buy a house with only £3k in savings for the fees etc how are they going to pay for the house once the deferred 5yr loan interest free comes to an end???... To me its just another term for sub prime ..We will see if its a good thing in about 4yrs time.....

bodgerx

leveller2911 wrote: »

If people are able to buy a house with only £3k in savings for the fees etc how are they going to pay for the house once the deferred 5yr loan interest free comes to an end???... To me its just another term for sub prime ..We will see if its a good thing in about 4yrs time.....

I believe my brother put down £7K, which was 5%. Once the 5 year no fee period ends, you starting paying some of the interest. It scales in over the next five years. You don't have to pay any capital until 25 years, or until you sell I believe.

Interestingly, if prices do actually fall, it is actually better on this scheme, because the value is reassessed when you want to pay back the other 30% capital. Obviously, if prices increase then the other 30% is going to be more expensive to buy - but in my brothers case, he'd still have been renting and saving for a deposit in future years, and have those higher prices to deal with...

brit1234

bodgerx wrote: »

My brother has just bought under Homebuy. Its a Redrow home, 3-bed, garage. Fantastic house. They managed to get Redrow to come down 5% on the asking, and they are putting 5% down, and getting a great house for less on the mortgage than rent than they were paying on a very average 2-bed flat. They wouldn't have been able to afford it otherwise - he wins. What's the issue?

The issue is you are overpaying for a property, it has extra conditions when you try to sell and may trap you.

The traditional way to buy a house is to save a deposit, if this is not possible maybe you are not suitable at this stage for home ownership.

These schemes just over inflate prices for others and makes it harder for them to get on the ladder as well as burdening the purchaser with far larger debts than should be.

bodgerx

brit1234 wrote: »

The issue is you are overpaying for a property, it has extra conditions when you try to sell and may trap you.

The traditional way to buy a house is to save a deposit, if this is not possible maybe you are not suitable at this stage for home ownership.

These schemes just over inflate prices for others and makes it harder for them to get on the ladder as well as burdening the purchaser with far larger debts than should be.

Why do you assume they are over paying? They negotiated the builder down, and have checked prices in the area for similar properties - they got a good price even if you take the homebuy scheme away.

Your tone is patronising.