Homebuy direct?

tinkerbell1986

Me and OH would love to buy a house (FTB) but have no deposit (yet).

A new development by Morris homes in an area we would love to live is offering homebuy direct but I don't know enough about it to know if it's a good idea or not and would we need any deposit at all? And what sort of money would we need for all the additional costs?

We have been renting for 3 years and I'm fed up of it! We live in a little 2 up 2 down 1980s type house and we are just longing for more space.

Between us we earn nearly £50k pa and we can generally save about £1000-1200 per month (we're getting married in 5 weeks so our savings over the past year-ish have gone towards that).

Should I look into this homebuy direct or forget it completely? It would take us about 18 months to 2 years to save a decent enough deposit for a 3 bed semi or hopefully detached house and I'm not sure I can wait that long!

Running_Horse

What's more important? A fancy wedding or somewhere to live?

Keep saving. Schemes are for schemers.

tinkerbell1986

Running_Horse wrote: »

What's more important? A fancy wedding or somewhere to live?

Keep saving. Schemes are for schemers.

Given that the wedding is 5 weeks away I think this is a slightly irrelavent point. Obviously the wedding is important to us and it is all paid for now. What you said might be relevant if I was saying "we've got £15k saved should we spend it on getting married or buying a house".

Running_Horse

Fine. You made your choice. An expensive wedding was your priority. Enjoy it and get on with saving that house deposit.

brit1234

Save yourself a decent deposit over two to three years, enjoy the price falls and avoid all that negative equity.

Homebuy avoid like the plague.

tinkerbell1986

brit1234 wrote: »

Save yourself a decent deposit over two to three years, enjoy the price falls and avoid all that negative equity.

Homebuy avoid like the plague.

Thanks brit

mummydebs85

Why are you saying avoid like the plague? It seems like a good idea to me. And it is a government initiative so how can it be a scam? Surely it's better than fully renting, at least your not completely throwing your money away

Person_one

I think out of all the recent 'affordable housing' schemes, homebuy direct is the least worst.

The main issue with it is that you have to buy a new property which will probably be seriously overpriced.

cocomonkey_2

Probably best to take advice from someone who has been through the scheme.
I have just bought a gorgeous 3 bed semi detached house with a garage and a big garden for £170k on the scheme with Redrow.
Me and my fiance were in a similar situation as yourself - good salaries but not a cat in hell's chance of saving up the £40k plus we would need to buy a house (also wedding impending).
We did have to contribute a deposit of £6500 - much more manageable! With solicitors fees etc add on about £2k to this - no stamp duty of course either for FTB.
The scheme has really worked for us - we are now homeowners and have a lovely brand new home which we don't have to spend any money on and we are really happy. We need to pay back 20pc of the property value over the next five years (before the interest kicks in) - which has actually worked out quite well for us - as mentioned in previous posts property prices are plummeting so we are likely to pay much less for remaining percentages as you only pay what the current market value is which for us is perfectly doable over the next five years. The scheme allows you to get in a nice new home as a homeowner while you continue to save for your deposit. I can understand some people saying you may get yourself into a hole with this scheme - if you can't afford to pay back the deposit - but that is your call. For us it has been brilliant and there are never any guarantees about house prices etc and I think our house has been worth every penny of what we paid for it - the appeal of new builds is much underrated when people focus on paying over the odds all the time - with a good housebuilder you get what you pay for. When money is tight it is a god send not to have to fork out thousands fixing things as you would in an older house.
Hope that helps

Blacksheep1979

Who determines 'current market value' though? Like all these schemes, they're dreamt up to keep prices high - wouldn't it be nicer if prices dropped to a range where you could easily get a property on 3x salary and with a smaller deposit paying back less overall?

Svenena

mummydebs85 wrote: »

Why are you saying avoid like the plague? It seems like a good idea to me. And it is a government initiative so how can it be a scam? Surely it's better than fully renting, at least your not completely throwing your money away

It's not necessarily a scam, but remember the government isn't just there to help out individuals, it also has to help out businesses, so I wouldn't just assume it's in the best interest of the buyers.