My Homebuy Direct experience

Cardinal-Red

I have already replied to a similar thread in the Mortgage forum but wanted to add my tuppence worth here so copied and pasted

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 - can be a good scheme, but just wish it was not necessary.

DVardysShadow

tb1105 wrote: »

Don't get presumptuous with me. The other 5% for your information we have paid. Why do some people on this board think they know best about everything?? Have you dealt or bought through the scheme?? My husband and I know this scheme inside out, we can afford it, we are VERY happy with being able to buy a 3 bed home. How dare you say to me I don't have a grip on money, you don't know me, my situation or my financial situation!!

Yes it has made it more affordable, hence we CAN buy it. We need to move out and this scheme allows us to buy a home we can stay in rather than a pokey flat. I am not here for people like you to tell me you know best about my situation, I am here to share my happiness of buying our first home through this scheme and to show others its not all doom and gloom as people like you make out! Not all of us are able to save for tens of years and buy our house outright, nor are many of us born with a spoon in our mouth or mummy and daddy handing us thousands of pounds so good for you if you don't need schemes like this. Some of us do.

You are here for whoever to make whatever comment they feel is appropriate. Your happiness at being enabled paying 20% over the odds for a house is rather sad and not something I would want others to share. Perhaps you should read 'the ragged trousered philanthropists' and get a perspective on people who are grateful to the rich for allowing them to make them richer.

madeupname1

tb1105 - just wanted to say good luck in your new home! Sounds like you've done your research and made the best decision for you.

There are always alot of opinions on here about house prices being overvalued and waiting for them to crash to their 'real' value. However, my personal view is that no one really knows what will happen in the housing market so its always best to look at what you can afford now and whats best for you now.

I waited 7 years before trading up to my new place on the basis that house prices would surely drop during that time. They didn't. All that happened is they went up exponentially. Eventually I took the plunge in 2007 just before house prices crashed. However, they didn't "crash" to their level in 2000, so I had I bought in 2000 rather than waiting for the crash, I would have been better off. Also, I noticed that even when prices crashed, this didn't necessarily make property more affordadble as it because much more difficult to secure a mortgage. Therefore, even though I bought at possibly the worst time, it doesn't matter. I can still afford my mortgage and I am enjoying living in it right now, rather than in 3, 5 or 10 years down the road. Even though there has been a drop in prices and alot of my equity has been notionally wiped out, this loss is only notional and since I don't intend to move any time soon, nothing to worry about. Hopefully you wont let the negativity get you down!

Eric1

Cardinal-Red wrote: »

they forced us to have further valuations done which held up the selling process and almost scared off our cash buyer - but eventually resolved.

well done, a cash buyer no less!

Cardinal-Red wrote: »

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.

if your figures include your house maintenance, insurance, foregone interest on your deposit, etc, it was indeed a godsend.
If not, your neighbour may have other ideas about enjoying the security of mortgage-free living

Muhasib

DVardysShadow wrote: »

You are here for whoever to make whatever comment they feel is appropriate. Your happiness at being enabled paying 20% over the odds for a house is rather sad and not something I would want others to share. Perhaps you should read 'the ragged trousered philanthropists' and get a perspective on people who are grateful to the rich for allowing them to make them richer.

Something that I'd like clarified is the claim that these properties are 20% overvalued - what is the current situation with the valuation surveyor checking this for the mortgage lender as I've read lots that these are being a lot less 'positive' under guidance from the lenders. Are these really 20% overvalued according to the local market if the valuation is in line?

tb1105

sorry DVS but I think you are obviously a very narrow minded individual who has their own opinion that is obviously always correct, so I am not going to waste any more time with trying to talk to you.

Halifax surveyed the property and the valuation came back at £180,000 (under valued). Persimmon agreed to sell including carpets and vinyl. As previously quoted, similar houses on the market are sellin for £180k - £200k so I don't know where this '20% above the odds' figure has been plucked from.

We have to wait 2-3 more weeks, sneaked up today and had a peak through the window, couple of doors and carpets to go in and that's us, we are soooo sooo excited!!! Thanks to all those who have posted constructively.

Cardinal-red, glad to hear the scheme worked for you, ideally we would love to buy without it, but like you, it is a way in to the property ladder before the prices start rising again, which they will do.

hmd1987

My partner and I (22 and 24 respectively) have begun looking at house buying, looking at the variety of different options out there. Because we have only been working full time for about 2 years, we dont have anywhere near an average 20k deposit saved up.

We are thinking that the only sensible option for us to get on the property ladder would be to go down the Homebuy Direct route. In fact we have recently seen a property built by Persimmon homes that appears to be a very good deal. I dont think we will be buying this year as we are getting married in December, and would struggle to save for 2 different things.

I just want to say congrats on your new house, and thankyou very much for creating this post as I had been struggling to find info on this scheme from the buyers pov

tb1105

congratulations on the engagement! we decided to get married first as wouldn't be able to save for a wedding once we have a house!

we got married in barbados in august and had a blessing back home, it was absolutely perfect, so have been saving like mad to add to our home fund, saved £12,000 in total a finally can move away from this place!! I have waited 5 years to be able to leave!!!! I can't wait!!!!

hmd1987

weve been engaged quite a while actually and just over a year ago we decided to set the date properly. Only been living in this apartment for just over a year but we really cant wait to get a house bought. Do all the furniture shopping etc. My OH is still on a temp contract so thats one reason why we arent applying for a mortgage yet or seriously looking at houses. So after the wedding it will be another case of saving like mad and fingers crossed we can get a gorgeous house bought

vixarooni

my partner and i moved into a new build development under the discounted rent scheme. It was a shambles, the woman said we could park outside because the property didnt come with a space. A few weeks after we moved in clamping signs turned up and we had to park our car a few minutes away which was awful. A whole host of other things went wrong and i got right royally sucked up in the new build wowness.

We payed £600 or so for that awful flat, after the 6 months we moved across the road to a better flat for similar money with a parking space and en suite! It wasnt with the scheme either, so after that i wondered if the scheme was so money saving as it claimed to be.

After renting for a year we hated it, so we looked into the homebuy scheme in another development and then definatly realised its not for us. Every new build homebuy i have seen has been the worst bit of the development, either the darkest inside, or near a rail way line ect. The part they know they would have great trouble selling. So i think with our past experience of the people who work with the scheme and the fact these homes are normally built in the last attractive area of the development we have been blessed with the opportunity to move in with my partners parents to save up for a deposit and do it the hard way.

But good luck to you and i hope it turns into a lovely home for you both.