Bloor Homestart - First Time Buyer

AFCJ_2

Good Evening,

I'm 21 years old and looking to move out with my girlfriend who is approaching 21, I have saved around 13k for a deposit so far.

Today we went to look at the following;

Okay, cant post links! But its on the bloorhomes site in Dunstable.

With the value being £128,950 of the whole flat.

We was introduced to the Bloor Homestart scheme, where you purchase 90% of the flat, and pay the other 10% off in 10 years (or within 10 years) but at the market value then. (So could possibly be a higher or lower value?) This would bring the value of the flat for us now to £116,055.

The mortgage is approx £590 per month over 30 years, so we think together we can put around £600 each into an account each month and that £1200 will cover all bills and food for the month? This is a rough guideline for that:

Mortgage: £590
Council Tax: £135
Sky - Broadband, Phone, TV: £65 ( A luxury, I know but something I think we will go for in the long run, especially as Sky keep sending me half price offers! )
Gas & Electric: £80
Water: £25
TV Licence: £12.50
Food: £300

Does that look reasonable? I got the costs just by looking at averages on google.

I was just looking for advice on if this would be easily affordable in your opinions? I earn 24k with a company car (and most fuel paid for) and my girlfriend is in uni, but also doing 35 hours a week working and brings home around 13k a year, so a joint income of around 37k yearly.

On paper it looks more than reasonable and would leave us with enough money to have a social life and still put aside a couple of hundred back into the savings account too.

Thanks in advance.

J.

Moglet

Don't forget you will have more bills than that each month.

Insurances - buildings, contents, life etc etc

Travel costs, car? public transport?

Mobile phones?

But your wage certainly looks doable for living together, even by yourself I'd say. I've certainly run a house and car on much much less.

geoffky

why 30 years and not the normal 25years ???

Richard_Webster

Check that other similar flats in the area 5-20 years old are being sold for the same money otherwise you be overpaying and when you come to sell you won't be able to pay off Barratt's 10% loan.

Will your relationship stand possible negative equity? There are lots of horror stories on this forum about people who bought together and things have gone wrong later. It is a pretty big commitment buying together and if things go wrong, it cannot always be unscrambled that easily, so it pays to be sure of your commitment to each other before you go into it.

kingstreet

AFCJ wrote: »

Good Evening,

I'm 21 years old and looking to move out with my girlfriend who is approaching 21, I have saved around 13k for a deposit so far.

Today we went to look at the following;

Okay, cant post links! But its on the bloorhomes site in Dunstable.

With the value being £128,950 of the whole flat.

We was introduced to the Bloor Homestart scheme, where you purchase 90% of the flat, and pay the other 10% off in 10 years (or within 10 years) but at the market value then. (So could possibly be a higher or lower value?) This would bring the value of the flat for us now to £116,055.

The mortgage is approx £590 per month over 30 years, so we think together we can put around £600 each into an account each month and that £1200 will cover all bills and food for the month? This is a rough guideline for that:

Mortgage: £590
Council Tax: £135
Sky - Broadband, Phone, TV: £65 ( A luxury, I know but something I think we will go for in the long run, especially as Sky keep sending me half price offers! )
Gas & Electric: £80
Water: £25
TV Licence: £12.50
Food: £300

Does that look reasonable? I got the costs just by looking at averages on google.

I was just looking for advice on if this would be easily affordable in your opinions? I earn 24k with a company car (and most fuel paid for) and my girlfriend is in uni, but also doing 35 hours a week working and brings home around 13k a year, so a joint income of around 37k yearly.

On paper it looks more than reasonable and would leave us with enough money to have a social life and still put aside a couple of hundred back into the savings account too.

Thanks in advance.

J.

I assume after their 10% equity loan, taking the net price to £116k, you are putting down your £13k to make the mortgage £103k? I've just worked the figures and I see you are, and looking at a five year fix with Nationwide?

If it is a leasehold flat, you are likely to find you have service charges and ground rent in excess of £50 per month. Check with developer.

Your question, bolded above, is a good one. Some shared equity deals have a collar, so if prices rise you have to pay more to redeem the equity loan, but if prices fall you do not pay less. Check with developer.

You need to know what happens if you don't/can't pay off the equity loan. Is there interest payable? At what rate? From what point? Check with developer.

Last point, same as Richard. We can insure against you losing your job, health, dying, practically everything. The only thing you can't cover is relationship breakdown. At this stage, buy on your own if you can. It'll make things a lot simpler if the worst does happen.

Good luck.

chiki1

with £13k already saved for a a deposit and a joint income of £37k and with youth on your side, i'd say wait a couple of years and buy your own place outright. you would be nuts to use this scheme. also, maybe wait untiil you're married to someone, or a bit older. 21 is awfully young to be committing so much so soon.

i'm pro-shared equity too so you're not getting an opinion from someone who is against the scheme in general. to me, it sounds like you're in a good position to buy a nice place within the next 5 years if you're able to put money aside. given your age, i'd do that. why buiy a place at only 21?? your girlfiend is still in uni too. forget it.

AFCJ_2

Many thanks for all the replies guys, each one is much appreciated

Sorry it's a brief reply but i'm busy at work but I wanted to give a quick one, as far as I know this is not a shared equity scheme, the house is 100% ours ? The 10% is almost an interest free loan until we pay it off, I assume BloorHomes just hope the value increases within 10 years so they make a significant profit there.

If we decide to sell within 10 years, we just have to give back 10% of the sale price to BloorHomes themselves.

Moglet

It will be shared equity which is different to shared ownership. The developer will place a second charge on the property. Make sure you're aware of all the details about when the loan is to be repaid. It's normally on sale and transfer but can also be on redemption of the first charge so that affects you remortgaging to a new lender.

Also be aware that only a few lenders offer shared equity mortgages.

Good luck.

Richard_Webster

As far as I can understand it OP would be getting a mortgage of around £103,000 form a bank or building society.

If the property is only worth say £110,000 when he comes to sell and he still owes say £100,000 to the 1st mortgage lender then Bloor would want £11,000 and he would be left with nothing - £13K savings down plughole.

Has OP made sure that the flat is actually worth £128,950 when comparing with similar slightly older flats just because it is new doesn't mean that in 5 years time it will sell for more than a similar 15 year old flat. If he could buy a 10 year old flat now for £110,000 he is wasting his money.