Barratt shared equity deals

beecher2

ssmith.73 wrote: »

Is it possible to work these schemes to your advantage?

I had considered this as an option on a 2 bed flat. The plan was to let out the 2nd bedroom, and if I managed to let for 5 years, the rental income would cover around 80% of the equity loan (less and property value increase), thereby negating a lot of the negative equity risk.

I know there is the possiblility of not being able to let out the room for a proportion of the 5 years and circumstances might change where I might not want to let it out, but the alternative at present is to rent/houseshare to try to save a bigger deposit to buy outright and in turn losing the rent I pay to someone else.

I appreciate this may be a little simplistic, and if anyone spots anything obvious please let me know.

Many of these schemes don't allow you to rent out a room.

Glasgow12

brit1234 wrote: »

Yes but the rent you pay is far less than the 20% overpayed for shared equity and then you have the interest costs of the loan on top. That is if prices stay static but they are falling so your loses will be more.

Whats wrong with taking the time to save a deposit nowadays all of a sudden? Its the I want now, property speculation, can't be bothered to save attitude that led to this economic crisis.

I can only speak for myself. it's not a case of not wanting to save but when you are paying out rent and day to day costs the amount you can save can be limited. I have been saving hard and the intention was to but the property we rent however the landlord wants more than i would pay for the property and term of letting has reduced by half to halfing the extra time to save more on the deposit. just a lot of wee things that have a knock on effect.

for me buying now through one of these schemes is more about getting some stability for my daughter and not moving her around once she starts school next year. renting does not give you stability. I do agree with you that this 'i want it now' thinking has had a huge impact and people are not in the saving mode.

Muhasib

glasgow g12 - I hope you will read the posts on the other link as there are people posting on there who have the opposite view to Brit1234, Poppy10 and rewired.

Check out other schemes for shared equity such as 'Firstbuy' (not sure if its called different in Scotland), as they will have different terms and conditions.

Obviously compare the price of any new property to an equivalent size of 2nd hand property. There are shared equity properties that are now worth more than the initial selling price which I don't see Brit1234 has acknowledged or that there is no definitive proof they have been overvalued (you will have to have it valued as part of your mortgage valuation anyway) . If you end up paying less on mortgage than rent to live somewhere new and can even paint your own colour on the walls(trivial but nice i know) then it is worth looking at further.

Take a balanced view and don't let Brit1234 put you off looking into the implications of the scheme further.

brit1234

muhasib wrote: »

Obviously compare the price of any new property to an equivalent size of 2nd hand property. There are shared equity properties that are now worth more than the initial selling price which I don't see Brit1234 has acknowledged or that there is no definitive proof they have been overvalued (you will have to have it valued as part of your mortgage valuation anyway) . If you end up paying less on mortgage than rent to live somewhere new and can even paint your own colour on the walls(trivial but nice i know) then it is worth looking at.

Got any links to these so called properties? :rotfl:

By the way can you tell me why they use there own mortgage brokers and surveyors? That's not fishy at all.

How many providers supply these mortgages? If it is so good why can I count them on one hand with out using all my fingers?

It's nice to have your own home but it also nice not to be trapped in negative equity and able to move to a bigger home when your family grows.