Government FirstBuy Scheme - what where and how!

Shinkansen

I got a great deal on my apartment through HomeBuy Direct.

I'm paying substantially lower monthly accomodation costs than renting privately thus allowing me to save more or have a more comfortable standard of living. It was valued fairly. I become a homeowner. I have the flexibility and decision to make overpayments on my mortgage if/when I want to increase my equity. I have a much, much larger, better equipped, apartment than I would have renting privately. I live in a desirable area. I can sell my apartment in a few years to time and release the equity to use as a deposit on a private home of my choice. If I gain value on the property, I split the profits equally. If my property loses value, I split the losses equally. I don't think anyone uses the HomeBuy Direct scheme as a means to an end, even though that option is there.

This negative equity argument is absolute rubbish and a risk associated with ANY home purchase, not specifically a problem to this scheme at all. So long as your valuation is performed fairly, you use your common sense and buy in an attractive/desirable development/area, you will be absolutely fine. As Hamish said in a previous post in this thread, given our current demographics there will be a release of huge pent-up FTB demand in the economy over the next few years. Selling off these brand new FTB builds will simply not be a problem. The mortgage market is slowly loosening up and increasing their LTV as well.

Just my two cents. Looking forward to moving in a couple of weeks! \o/

leveller2911

Shinkansen wrote: »

I got a great deal on my apartment through HomeBuy Direct.


This negative equity argument is absolute rubbish and a risk associated with ANY home purchase, not specifically a problem to this scheme at all. So long as your valuation is performed fairly, you use your common sense and buy in an attractive/desirable development/area, you will be absolutely fine. As Hamish said in a previous post in this thread, given our current demographics there will be a release of huge pent-up FTB demand in the economy over the next few years. Selling off these brand new FTB builds will simply not be a problem. The mortgage market is slowly loosening up and increasing their LTV as well.

Just my two cents. Looking forward to moving in a couple of weeks! \o/

Well if Hamish says its ok then it must be ok, I mean he does know everything doesn't he...........

Is this yet another Hamish socky?.......

My 2 cents is prices aint going North for at least 5 years and will probably go South before then.

Is lending loosening up then?? Are they not increasing their LTV but also increasing rates for FTB too?/


If its not a Hamish Socky and you are genuine then good luck ....

Shinkansen

Absolutely genuine. Just giving my own 2 cents on this scheme from a first-hand point of view. There is absolutely no other way for me to begin accruing equity in my own home without being forced to save for another 4-6 years or so whilst renting privately at astronomic prices and throwing away good money. The down-side to the part-buy/part-rent scheme, as far as I can see, are simply that you don't own 100% of the property, which also minimises your exposure to fluctuations in house prices, which in itself, if you are risk-averse, is another advantage.

It will be interesting to see how the Con-Dem's new FTB scheme pans out. No key-worker priority anymore either, interesting.

Edit:- I just noticed that Leveller, you say you are in the North. I am ON the South Coast. This massive difference in location may go some way to explain our differences in opinion on the benefits of this scheme!!!!!

Conrad

The downsides become evident when you want to sell / staircase. I can only speak for those I have dealt with, and they all did fall in value considerably more than market norms, although not one applicant wanting to sell had any notion of this at first as they were assuming thier valuations were higher than they were.

leveller2911

Shinkansen wrote: »

Edit:- I just noticed that Leveller, you say you are in the North. I am ON the South Coast. This massive difference in location may go some way to explain our differences in opinion on the benefits of this scheme!!!!!

Did I? Where? I'm in East Sussex and always have been AFAIK..:D

Its on every one of my posts ,where it says "Location"..I'm actually about 4 miles from the sea so very South Coast too..

Think my post may have confused you:

"My 2 cents is prices aint going North for at least 5 years and will probably go South before then". Meaning prices won't be going up (North) and will probably go down (South).

3mmy

i know its been a while since people have commented, bashed, moaned, winged etc etc etc on this thread but i just wanted to say as a FTB using the firstbuy scheme and working in a financial institute that this scheme is really good for people like myself who are just throwing money at my landlord to have a roof over my head.

Our rent was £650 a month for a 1 bed flat that needed work done to it....we had a game plan of putting aside while living there to have a decent deposit but its just impossible to save money when im burning it through provate rent.

When we had a chat to our local Firstbuy agent it worked out that we had the 5% and a little more and was then able to purchase a new property.

some of you seem to be confusing this with shared ownership...its not, we own 100% of our 2 bed house and are paying nearly £200 a month less than what we were wasting renting.

Yes for some it seems a stupid scheme which gives the government more money for such little work but at the same time there are many of us out here that just cant generate a large enough deposit to do it the 'normal' way.

I think people have made a great point about the bank of mum and dad and the reality is some of us do not have a fall back and need to do it all on our own and yeah i understand that if your earning etc you can put aside but not nearly enough, quick enough to get anything reasonable.

Our new build home is HUGE, yes its a new build and ive always been apprehensive of them but for us it was a great thing to do, and even with the mortgage we are able to overpay every month due to the savings we are making NOT renting.

Yes i know some of you will hate this post but i just thought its worth saying something as ther didnt seem to be any ACTUAL scheme holders posting.

3mmy xx

Shinkansen

Glad to hear it 3mmy. It wasn't really a choice for me either, since I decided I wanted to get onto the housing ladder, there were no other options.

I really wanted to do the equity loan but that didn't exist when I applied unfortunately.

kingstreet

I think it's fair to say if your circumstances remain unaltered, shared equity works just fine. The majority of posts which appear on here from those who fall foul of the scheme involve people whose circumstances change. They need more room due to unexpected additions to the family, they split up with their partners, lose their jobs, have credit problems and can't remortgage...

My one real criticism is this is more or less confined to new-build, so you start off with an immediate disadvantage in paying more than you would for a similar second-hand property in the same area.

It's a shame that helping the first time buyer is always linked by Government to helping builders too. I realise construction jobs are important, but fail to understand why the first time home buyer is the one to foot the bill for them.

Shinkansen

Kingstreet... a great point! You sign up to a year instantly with no option to sell-on/alter, and let's be fair, anything can happen in 12 months... I understand that gripe. I also appreciate that it can take a little-while to sell on as the Housing Association get first-dibs to find a buyer to try and retain their affordable housing. I knew that I was going to settle in this area for at least 4 years so, it suited my needs.

The first-time buyers/construction of new-builds link is just the Government contracting out construction! Isn't it law now that all new estates must contain 5% affordable housing?

The Government used to have open-market equity loans but the money for that disappeared ridiculously quickly and lots of new-builds were left empty... So they changed the rules...

kingstreet

Shinkansen wrote: »

I also appreciate that it can take a little-while to sell on as the Housing Association get first-dibs to find a buyer to try and retain their affordable housing

Shared ownership has such a clause. I don't remember Shared equity having such a restriction?