First Time Buyer Scheme (FTBI) - Stuck - Unable to sell or rent!

Flyboy152

tootsmyboots wrote: »

flyboy, that was 100% what we were told by Hambleton District Council (North Yorks). We also applied for exemption for my dad's empty house after he died so I have applied for it twice (on two different properties) and been told that was the rule. This was only last year, but like I say it may have been changed since.

Having been in the property market for a number of years, I truly have never come across this before. I think the person you are talking to needs to revist their training manual.

BadgerFace_2

myredhotcar wrote: »

www.myfirsthome.org.uk/content/1/25/repayments.html

See the section on repayment in a falling Market. Too good to be true. But it is!

What a brilliant waste of money scheme the government has come up with. They lend you a 25% share of your house, you lose it and pay back nowt. So glad my tax goes on something worthwhile.

Meanwhile, the people who saved hard to finance 100% of their own house are lumbered in £'000's of negative equity with no way out.

It's good for you though.

_bankrupted

myredhotcar wrote: »

myfirsthome.org.uk/content/1/25/repayments.html

See the section on repayment in a falling Market. Too good to be true. But it is!

MRHC,

I have (very) quickly read the info on that site and although they use the words may take a reduced loan amount... if this is the case then your are very fortunate!!!

You need to sell the flat at whatever cost it will sell at today, not rent it out, so if that means lowering the price even further then do it as you are in a rather weird situation that most of the loss will be incurred by the FTBI company and not you.

It's a hard pill to swallow (losing more money) but you are in a rather fortunate position that you don't appreciate.

A sold price of 60k, must be in excess of your mortgage as you state that this figures allows some of the FTBI loan to be repaid, the remainder being written off.

If this is the case then you have room to reduce the price further with less paid back to FTBI. If FTBI have stated a minimum repayment amount then if I were you I would look to find this money elsewhere and not let 60k define the minimum selling price.

To buy a flat at nearly 100k 3 years ago and not to be able to sell it today for 60K means you paid way over it's market value. UK house prices will fall or be stagnant over the next few years and when interest rates rise, which they will do, we will probably see more downward pressure. It will be a decade or more until your flat reaches 100k in real terms again.

Outright buyers of those flats will be sitting on 40k+ negative equity (or more) for many years. It seems you have an escape route today by realising only a fraction of that 40k loss!!

I am roughly guessing that you will lose your deposit plus the amount sold under 60k.

5K deposit????
5K loss if sold at 55k

Total loss 10k?? Or years of negative equity and the hassle of being an accidental landlord and all the problems that will bring!

Think long and hard about the situation you want (and can afford) to be in.

Good Luck
_B

myredhotcar

BadgerFace wrote: »

What a brilliant waste of money scheme the government has come up with. They lend you a 25% share of your house, you lose it and pay back nowt. So glad my tax goes on something worthwhile.

Meanwhile, the people who saved hard to finance 100% of their own house are lumbered in £'000's of negative equity with no way out.

It's good for you though.

If everyone on the FTBI scheme ended up in negative equity (good chance they are) then the government has a huge loss they need to deal with!

The problem is that the houses on the FTBI scheme bring down the other 100% properties - if you could sell you house quickly for half the price without losing money then you would - once one sells cheap it brings down the value of the rest.

The negative equity will only return to the black once all the FTBI properties are sold. This same issue is affecting new developments up and down the country.

BadgerFace_2

It seems to be a government scheme that shafts everyone for the benefit of a very few. I do feel very sorry for anyone who bought one without an assistance scheme, as they'll be in a world more hurt than you are. Though they probably had a lot more negotiating power and paid less.

Just to add, while you may not feel like it, you are in a great position of being able to walk away from this without any real financial consequences and start again. It'll sell eventually.

Flyboy152

BadgerFace wrote: »

It seems to be a government scheme that shafts everyone for the benefit of a very few. I do feel very sorry for anyone who bought one without an assistance scheme, as they'll be in a world more hurt than you are. Though they probably had a lot more negotiating power and paid less.

Just to add, while you may not feel like it, you are in a great position of being able to walk away from this without any real financial consequences and start again. It'll sell eventually.

How does that work then?

birduk

Nevermind all that. !!!!!! is that cheesy couple doing on the right move link?

TBH you are clearly looking at gullible first time buyers just like you were. That is your market. Now, the problem is that none of these people have the deposit/finance. If they do, then they will go for a more expensive option with more bedrooms.

Flyboy152

My recommendation would be to find an estate agent that has some experience, or speciality, in dealing with FTBI properties.

BadgerFace_2

Flyboy152 wrote: »

How does that work then?

Because it allows the lucky few who have the government money to sell at a significant loss (like the OP), knowing they won't have to bear any of the financial responsibility of it. Which brings down other peoples house prices. Also, how do you think the government gets the money to fund this scheme...from taxes etc. therefore I think my comment is pretty much on the money. It takes large sums of money from everyone paying tax and uses it to fund house purchases for a very few lucky people, which if (when in this climate) they go wrong, does not have to be paid back.

Could this not be like any 'private' shared equity scheme, where the person who was willing to take the money, should also be made to pay it back (at market rate obviously, so if your house goes down, you pay less back or up you pay more). That way, we'd have money to maybe, I don't know, fund some new cancer treatments?

Don't get me wrong here, if I was on the scheme and in the OP's position, I'd be pretty happy and see nothing wrong with it. It's the poorly designed scheme.

JJM07

I am in a similar situation as I bought my property through FTBI (now known as HOP) in 2007.

The scheme is confusing but you are not in a bad position really, as you can sell the property for whatever price.

But here's my situation;

I bought my 2 bed apartment for £180,000 in 2007 with a 50% shared ownership (knowing what I know now this was overpriced!!). My mortgage = £90,000 no deposit required.

Now, I keep an eye on rightmove and noticed loads of properties coming up for sale in the development at just over £90k!

FTBI will take a reduced amount on the loan they initially provided so people in financial difficulty can sell. This means when these properties are selling at £92k or £93k their mortage is paid off in full and FTBI (or the government) are getting around 2k/3K back.

I have noticed around 4-5 two bedrooms properties coming on the market and selling within 2-3 weeks of being listed as investors are snapping them up!!!

I wanted to purchase the other 50% of my property (staircase) so I arranged a RICS valutation and the property was valued at £115,000. I was told by FTBI that I would need to pay back 50% of the properties value, so I would need a further mortgage (on top of my current £90k) of £57,500!!! This means I would have to pay £147,500 for a property worth considerably less!!!!!!

The scheme was originally designed to help people get on to the property ladder and now I feel that the only realistic option I have is to sell up, or sell to friend / family member for £92k and buy it back for a little more giving them some cash!

I want to stay in the property as I like it but don't want to pay over the odds for it. If anyone has any advice on my situation please let me know!!

If I was you and you want to sell up quickly, I would search websites like rightmove and zoopla for what other properties in the development have sold for in the past. Try and find out what agents they sold through and contact them, as they may have people (investors) who missed out on the last one or want to buy another!

Ring all the agents around the area and ask them if they are familiar with the FTBI scheme, I spoke to Hunters in my local city and they were practically begging me for the sale as they have people waiting.

As long as you clear your mortgage, sell the property for whatever you want. It will sell it may just take time and a good agent!!