Homebuy Direct

Sazrina

We are due to be completing on a house under this scheme in the next couple of weeks so I'll try to come back after that to give some feedback.

I can't say I understand the comments about bumping up the prices of new builds, you still undergo the valuation by the mortgage company like any house purchase does. Our builders had to knock nearly £10k off the price of ours. We are very happy with what we are getting with our money and have done our research.

The very negative views that people display whenever Homebuy Direct is mentioned are starting to get quite stupid to be honest.

[Deleted User]

bodgerx wrote: »

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.

I disagree. If prices weren't too high in the first place then there would be no need for these ridiculous schemes. They simply help to support unsustainable prices which really need to come down. The bottom line is that if prices are too high then people shouldn't buy until prices become affordable again.

Cardinal-Red

I have 2 views to offer here.

The 1st is as a just 'escaped' user of this scheme - we bought under a scheme to encourage keyworkers (sorry if that phrase offends!) to move into the area, and amounted to a 20% equity loan on the value of the property, interest free, with the rest secured by a mortgage. On sale (which we've just done) you pay back 20% of the value at sale.

For me and my wife, this scheme was a godsend. Figures wise, it allowed us to buy a property and live in it for almost exactly £100 less than the neighbour next door rents it for. We also had the security of a guaranteed home etc.

On the other hand, I totally agree with the people who say the scheme is designed (or at least has the consequence of) to keep house prices artificially high. However I doubt very much whether an individual couple should be expected to 'take one for the greater good' and pay rent etc in a campaign to lower house prices - it'll only be a few minutes until the next keen couple comes along to buy the property.

You have to do what's best for you at the time, and having gone through the whole scheme, I have to conclude that it did work best for us than the equivalent renting.

Some downsides though - the lenders who are prepared to back these schemes are dwindling, so choice is restricted. This may make a huge difference when it comes to the end of a good intro deal etc.

Also, we had a bit of an argument with the loan provider over the valuation of the property - down £6,000 from 2004 (around 3% which I think is pretty good!) but they forced us to have further valuations done which held up the selling process and almost scared off our cash buyer - but eventually resolved. I guess it was due diligence on their part seeing as the scale for fraud is quite large.

So in summary - a good scheme, but just wish it was not necessary.

brit1234

bodgerx wrote: »

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.

Are you aware the common practice of developers manipulating the local land registry figures by any chance?

bodgerx

brit1234 wrote: »

Are you aware the common practice of developers manipulating the local land registry figures by any chance?

No, please educate me. It is funny you should say that actually, because recently we viewed a property which sold last summer (according to the Land Registry) for £152K (new build), the EA has it on now for £175K. We offered £158K, stating what we saw on the Land Registry, and the EA came back and said it had been rejected and that we couldn't trust that figure because the builders will not have given the exact value! - so you are saying this cuts both ways?

His comparison was to not only houses in this development, but also houses of similar size and type in this side of town. Are you going to tell me all Land Registry figures are fiddled?

bodgerx

CR10 wrote: »

I disagree. If prices weren't too high in the first place then there would be no need for these ridiculous schemes. They simply help to support unsustainable prices which really need to come down. The bottom line is that if prices are too high then people shouldn't buy until prices become affordable again.

That is probably true, but you can sit around and wait for something that may or may not happen, or you can stop paying rent and have a new home to move into. Personal preferences I suppose.

Dan_1976

LOL this cracks me up, are you all really bothered by SO or homebuy or do you all wish you had been given a leg up??

Traditional lending and buying is dead. In the good old days, you borrowed 3 times your income, the wife could not use hers incase she had baby and you only needed £5k for a 10% deposit on a 3 bed family home!!

Although OP, this scheme is on its way out so funding will be limited.

Its a good scheme as long as you keep your eyes open and plan for the 5 year period involved.

Good luck

bexy87x

On the back of the arguments about HomeBuy schemes, what are people's opinions of shared equity schemes with the company that built the houses? For example, Taylor Wimpey are offering a 'deal' where we pay a 5% deposit, take out a 75% mortgage and pay the other 20% back after 10 years, paying no rent or interest on that percentage in the mean time.