First Time Buyer - Low Cost housing scheme?

tkitmike

Hi All,

I'm currently looking at buying a property near to where I currently live.

As I'm a first time buyer, the properties are available for two different schemes the Governments Home Buy direct and a low-cost scheme.

The low cost scheme means that the property price (for example) is £100,000 and only pay 80% of that, so £80,000 but you own 100% of the property.

I'm just wondering whether people have heard of this before or whom have experience of it?

I'm wondering if there are any hidden clauses or small print, they haven't told me yet?

Off to a second viewing tomorrow, so I will ask for full details, but would be nice to hear of any other peoples experience.

Cheers,

Mike

mynameisdave

I belive the 80% you pay means when you sell you are only permitted to sell at 80% of the value so its worth bearing that in mind.

They sometimes put restrictions on such as 'must be sold to someone who already lives or works in the area'

tkitmike

Thanks Dave,

Your definitely right, we have to sell at 80% of the property value, I wonder how this works? - If an Estate Agent values it at £150,000 do we then advertise it at that price, or at 80%?

It's a bit of a strange setup.

Cheers,

Mike

Cannon_Fodder

There are dozens of flavours and variations of scheme. Get the full scheme/developer etc details.

You might pay rent on the other 20%, or be given a 20% loan which doesn't need to have any interest paid for 5 years...or 20% is just left with the Housing Association, so they can retain control when its time to sell.

Region/location also complicates which schemes may or may not apply.

Until you know exactly which scheme is involved, you'll be unable to examine the small print. Get all the brochures and weblinks you can ask for.

1 usual clause is that you cannot rent out a part-owned property - even if you should need to due to job relocation, for example.

And, that the Housing Association get first choice upon re-sale, perhaps vetting those who wish to buy, to make sure they fulfill the same criteria that you now have, i.e FTB, low income, maybe keyworker, etc.

brit1234

All bad schemes, which allow the developer to charge more for property.

I think Homebuy ends this month (July)

http://www.barratthomes.co.uk/Campaigns/Home-Buy-Direct/

Save a deposit and enjoy the price falls.

tkitmike

Hi,

Thanks for your comments, the property is owned 100% by the purchaser and they have not mentioned paying rent for the remaining 20%

I see what you mean about rent, that could be an issue later on - But if you own it 100% in a few years time would it matter?

I will certainly contact them and ask for all of those details.

Thanks!

tkitmike

brit1234 wrote: »

All bad schemes, which allow the developer to charge more for property.

I think Homebuy ends this month (July)

Save a deposit and enjoy the price falls.

Thanks, yes I certainly don't agree with the Home Buy Direct scheme, it's simply another Mortgage/loan for your deposit!!

Cannon_Fodder

They will say you 100% own it, to pass responsiblity for its upkeep to you.

(One of the issues with some Shared Ownership schemes, is that you might have only 25% or 50% to start with, but are still expected to look after the whole house with no contribution from the people you pay the other portion's rent to...might as well rent 100% and save the upkeep and maintenance costs...)


If no mention of rent or loans, it could be something like;

http://www.highland.gov.uk/livinghere/housing/affordablehousingdevelopment/lowcosthomeonwnership/

"An owner generally pays between 60% and 80% of the price of a home, with the remainder held by a registered social landlord using a Government grant.

For example, the RSL develops property valued at £100,000 and the shared equity buyer buys an 80% stake. The shared equity owner sells the property 10 years later at an overall value of £200,000. The shared equity owner receives £160,000 and the RSL has £40,000 to reinvest in new affordable housing."


These don't seem to offer the option for getting to 100% though, which the rent/loan ones do, so the devil is in the details...

tkitmike

Thanks, that's a great help