NewBuy costs more than renting

brit1234

NewBuy costs more than renting

Analysis from Hometrack has revealed that NewBuy product rates are so high it costs consumers 25% more than renting.

Hometrack’s latest Insight Paper takes an in-depth look at the new build housing market.

The paper looked at the prospects for NewBuy and compared the cost of purchasing a new home under NewBuy to the cost of renting or buying via a shared equity product such as FirstBuy.

Outside London Hometrack said NewBuy is not as attractive a proposition as a similar equity loan based scheme and that on (a national) average financing a NewBuy purchase is more than 25% the cost of renting.

Richard Donnell, director of research at Hometrack, said: “NewBuy is the latest government initiative to kickstart the housing market.
“However Hometrack’s analysis shows that with mortgage rates averaging around 5% (compared to typically 3.5%), the weekly repayment costs are higher than those of an equity scheme such as FirstBuy or renting.

“This will ultimately impact on the attractiveness of the product relative to other choices.

Rest of story:
http://www.mortgageintroducer.com/mortgages/243398/5/Industry_in_depth/NewBuy_costs_more_than_renting.htm

JonnyBravo

Good news then!
The last thing us landlords want is loads of renters turning into purchasers. After all reduced demand = reduced rent.

(I know you'll be pleased for us too brit )

The-Joker

brit1234 wrote: »

NewBuy costs more than renting

Analysis from Hometrack has revealed that NewBuy product rates are so high it costs consumers 25% more than renting.

Hometrack’s latest Insight Paper takes an in-depth look at the new build housing market.

The paper looked at the prospects for NewBuy and compared the cost of purchasing a new home under NewBuy to the cost of renting or buying via a shared equity product such as FirstBuy.

Outside London Hometrack said NewBuy is not as attractive a proposition as a similar equity loan based scheme and that on (a national) average financing a NewBuy purchase is more than 25% the cost of renting.

Richard Donnell, director of research at Hometrack, said: “NewBuy is the latest government initiative to kickstart the housing market.
“However Hometrack’s analysis shows that with mortgage rates averaging around 5% (compared to typically 3.5%), the weekly repayment costs are higher than those of an equity scheme such as FirstBuy or renting.

“This will ultimately impact on the attractiveness of the product relative to other choices.

Rest of story:
http://www.mortgageintroducer.com/mortgages/243398/5/Industry_in_depth/NewBuy_costs_more_than_renting.htm

They must be desperate to sell these quick, everyone knows they will be lower value next year and even lower in years to come.

At least renting you can pay 25% less than buying a newbuy and get someone else to put flooring down and sort out all the little things with a new build. Then buy it at the bottom when they get repossessed when rate return to normal in a couple of years.

The-Joker

JonnyBravo wrote: »

Good news then!
The last thing us landlords want is loads of renters turning into purchasers. After all reduced demand = reduced rent.

(I know you'll be pleased for us too brit )

I never thought I would ever agree with a perma propbull but yes I agree with you, one way or another there will be less demand all round from now on. Especially next year when the benefit cuts and caps come in. But yes watch unemployment keep going up and wages keep falling.

brit1234

JonnyBravo wrote: »

Good news then!
The last thing us landlords want is loads of renters turning into purchasers. After all reduced demand = reduced rent.

(I know you'll be pleased for us too brit )

Jonny as I always said its better for the landlord to take the equity hit rather than a ftb on a newbuild in a falling market.;)

On a serious note I can't see an advantage on buying in this market over renting at the moment.

FTBFun

Brit, your thread title is a bit disingenous as it actually says:

“However Hometrack’s analysis shows that with mortgage rates averaging around 5% (compared to typically 3.5%), the weekly repayment costs are higher than those of an equity scheme such as FirstBuy or renting.

So although this particular version of shared ownership may not be that attractive, some other schemes aren't.

brit1234

FTBFun wrote: »

Brit, your thread title is a bit disingenous as it actually says:



So although this particular version of shared ownership may not be that attractive, some other schemes aren't.

You must forget that these other schemes have extra payments:

Shared equity has a big equity loan to be paid back 5-10 years after purchase.

Shared ownership has rents rising faster than rpi and a whole host of cost for every thing. Also you don't own the property but lease it.

chucky

brit1234 wrote: »

NewBuy costs more than renting

I wouldn't be surprised at all. All of these schemes; shared ownership, equity partnerships, shared equity that are used to buy property are for those people that can't afford to get on the housing ladder in the first place. It's making them pay a premium for them to own their own home.

I wouldn't touch them with a very long barge pole and feel sorry for the people that have, one way or another they'll make you pay.

dave4545454

JonnyBravo wrote: »

Good news then!
The last thing us landlords want is loads of renters turning into purchasers. After all reduced demand = reduced rent.

(I know you'll be pleased for us too brit )

so why are some people on here always desperate to try and encourage people to buy their own home?

heathcote123

chucky wrote: »

I wouldn't be surprised at all. All of these schemes; shared ownership, equity partnerships, shared equity that are used to buy property are for those people that can't afford to get on the housing ladder in the first place. It's making them pay a premium for them to own their own home.

I wouldn't touch them with a very long barge pole and feel sorry for the people that have, one way or another they'll make you pay.

Yes they certainly do. I'm paying £120 pcm on 90k of equity. !!!!!!!s.

Niv

dave4545454 wrote: »

so why are some people on here always desperate to try and encourage people to buy their own home?

I would guess that those that are encouraging people to buy are not landlords? Its not rocket science to work that out...