First-time buyers may be the losers in shared equity scheme

brit1234

Property developers have been ones to gain from government scheme aimed at buyers on low incomes, claims think tank

Thousands of homeowners may have overpaid for new flats bought using government shared equity schemes, according to a report.

http://www.guardian.co.uk/money/2011/dec/28/firsttimebuyers-property?newsfeed=true

LondonMoneySpendingExpert

Interesting article, although the last paragraph shows that.in Hartlepool HomeBuy owners did better then those who bought the ougright. Any comments Brit or Geof?

brit1234

LondonMoneySpendingExpert wrote: »

Interesting article, although the last paragraph shows that.in Hartlepool HomeBuy owners did better then those who bought the ougright. Any comments Brit or Geof?

That was one individual property, I am pretty sure for the majority shared equity is worse. As the Guardian calls it Shared equity equals negative equity.

They don't really mention the time bomb effect of the loan repayments when they kick in but its nice to see a report clearly stating that shared equity is to benefit the builders only not the buyers.

dawyldthing

i'm sorry, but no s++t sherlock! The only people that benefit from it are the builders as no one normally would afford these prices until their 60s!

brit1234

Below is a BBC tv report on the dangers of shared equity in 2008 with Estate agents and the Law Society saying they are just there to benefit builders and keep prices high.

Its also has the dodgy builders federation spouting the same rubbish as in the Guardian article above.



The Law Society says schemes offered by housebuilders to help first-time buyers could leave them unable to trade up when they come to sell. Shared equity deals are on the increase as developers try to shift thousands of homes in the property market slump.

Video: http://news.bbc.co.uk/1/hi/business/7613781.stm

dawyldthing wrote: »

i'm sorry, but no s++t sherlock! The only people that benefit from it are the builders as no one normally would afford these prices until their 60s!

Every other day you have a new MSE member thinking shared equity is a good deal, there are plenty of guliable /desperate people out there.

LondonMoneySpendingExpert

brit1234 wrote: »

That was one individual property, I am pretty sure for the majority shared equity is worse. As the Guardian calls it Shared equity equals negative equity.

They don't really mention the time bomb effect of the loan repayments when they kick in but its nice to see a report clearly stating that shared equity is to benefit the builders only not the buyers.

Sorry but i think you should read the paragraph again as its one example for one area not property!
"One development that allowed first-time buyers to purchase a home using a HomeBuy Direct shared equity loan is Bellway Homes' Southbeach estate in Hartlepool, where new homes are still available priced at £72,500 to £190,500. In July 2008, one new terraced home in the development sold for £117,000, but by June 2011 it had resold at just £92,000 – a drop of 21.4% in less than three years.

However, this is less than the average house price fall of 28.3% in Hartlepool recorded by the Land Registry over the same period."

LondonMoneySpendingExpert

brit1234 wrote: »

Below is a BBC tv report on the dangers of shared equity in 2008 with Estate agents and the Law Society saying they are just there to benefit builders and keep prices high.

Its also has the dodgy builders federation spouting the same rubbish as in the Guardian article above.



The Law Society says schemes offered by housebuilders to help first-time buyers could leave them unable to trade up when they come to sell. Shared equity deals are on the increase as developers try to shift thousands of homes in the property market slump.

Video: http://news.bbc.co.uk/1/hi/business/7613781.stm





Every other day you have a new MSE member thinking shared equity is a good deal, there are plenty of guliable /desperate people out there.

Brit i replied back to a post of yours the other day. Why are most of your points from 2008? Alot changes in 3 yrs

piggeh

Anyone buying a new property - shared equity, outright, first time buyers, or 3rd time buyers - will all see negative equity the moment they buy a new build. You're paying for the fact it's brand new. As the article points out, just like a car showroom. This hasn't got anything to do with the shared equity scheme though, I don't know why they include it in the article.

brit1234

LondonMoneySpendingExpert wrote: »

Brit i replied back to a post of yours the other day. Why are most of your points from 2008? Alot changes in 3 yrs

The guardian article was today, the same warnings came out 3 years ago when this started ie 2008. In 3 years nothing has changed if you compare both, it seems shared ownership then and now is a scam to keep prices high and then and now the house builders lobby group surprise surprise deny the reports it is a scam.

Running_Horse

The best thing government could do for the housing market is leave well alone, and let property find its true level. It's not like housebuilders have delivered the homes this country needs; quite the opposite, as soon as prices fall they starve the market. So why in these tough financial times they continue to get handouts of public money is beyond me. Tax their landbanks and let smaller builders do what the big boys cannot.

pioneer22

Who cares a home is to live in and all houses would of been new at some point... New homes will have a premium attached but houses will do whatever the market will do. Anyway if your smart you can add value to the house anyway and increase its value without relying on the market.

Happy to own my own house.