Help to Buy?

wotsthat

shortchanged wrote: »

So do you think they would get anywhere near these asking prices without all these schemes on offer?

Are the schemes inflationary? Yes I guess so but the big win for the builder is not the extra (if any) margin but the increase in transaction numbers.

shortchanged_2

HAMISH_MCTAVISH wrote: »

Do you think prices would be anywhere near this low if the mortgage market wasn't broken?

Well if you're talking about sensible lending then yes, most likely lower than now.

We are where we are today thanks to the loose lending of the previous decade and the government is doing it's utmost by every scheme possible to prop up prices at this level.

We know earnings are lower than a few years ago Hamish, so with sensible lending of 10%+ deposits and sensible income multiples and no schemes then house prices would not be as high as they are now.

HAMISH_MCTAVISH

shortchanged wrote: »

with sensible lending of 10%+ deposits and sensible income multiples and no schemes then house prices would not be as high as they are now.

Indeed.

They'd be higher.

shortchanged_2

HAMISH_MCTAVISH wrote: »

Indeed.

They'd be higher.

Of course they would be Hamish.

Thrugelmir

mikedaveross wrote: »

Any Idea of the fees a Developer/Lender would be paying to be part of such scheme? Is it per sale or a 'membership'?

My understanding from the blurb is developers get the whole complete 20% funding direct...

There's no fee on the Help to Buy scheme.

thedalmeny

Ok...

NewBuy used to cost the developer 'around' 4%, which is a big reason why they were reluctant to negotiate discounts on the scheme.

Help To Buy as far as i understand it does not cost the developer anything, this was confirmed by the new build company i purchased from.

On my new build property using 'Help To Buy' i got the following;

- 6% Discount
- Carpets
- Integrated fridge / freezer
- Turf
- Stamp Duty Paid (Halifax Offer through mortgage)

From reading other peoples experiences, it does appear now builders are reluctant to offer discounts due to it's popularity. You can understanding this, i mean why would they sell a property for less if they believed they could sell it for more due to demand?

I reserved my property 2 days after 'Help To Buy' was announced, thankfully.

Don't get caught up with what 'discounts' you get though, i looked at allot of new build property around the North West and some were grossly overpriced and some were comparative to open market house prices.. I think that's more important.

I seem to have gotten a price just below the going open market rate for a 5-10 mile radius. So i'm quite happy. Then again, i walked in prepared to reserve and had done a credit check and provisional 'Help To Buy' check with a broker (which the broker confirmed to the builders by phone) so they knew we were serious buyers. Made it very clear we'd reserve that day if we found the right house.

Another thing to remember is to check the scheme details, especially how Help To Buy is based on debt to earnings ratio. I personally have no debt and quite a high salary, thankfully my wife is only working part time min wage at the moment (Normally shes a full time teacher) and my bonuses were not included in the calculation. As i was literally on the edge where i'd of needed to borrow more to qualify.

HTB has been great for me, with our 15% deposit the best rate we'd of gotten would be 4.5%.. On 'Help To Buy' we got 3.59%, this for me is the biggest advantage. The scheme itself has saved me money, i'd of been spending around £5000 extra over a 2 year fixed term due to the higher mortgage rate.

Rik1087

Me and my partner also experienced the "lack of help" to buy syndrome from the developers.

Developers are in a very strong position, as they know if you walk away, there will be a queue out the door behind you ready to reserve your plot.

I dealt with Connells EA who were advertising the properties on the development and each time we put an offer forward, the developer rejected the offer stating their was no room for negotiation - Also they wouldnt consider any further offers from us until we confirmed we would be using their recommended brokers and their solicitors - Which we were clearly not happy to do.

In the end, i was getting so little sense from Connells, i contacted the developer direct to negotiate. We eventually agreed that i would use their brokers (Even though we had already had the AIP agreed via Connells broker/nationwide) - But we would be using our own Solicitors, and also negotiated 5k off the asking price.

In the grand scheme of things 5k wasnt alot, but as i put the developer on the spot, i believe he was quite startled with the conversation.

Overall though, through the correct channels, i very much doubt we would have received any discount - Luckily everything is included in this property, lawn, appliances, carpets etc.

At the end of the day, this scheme has been so popular, if you dont wish to bend to their commands, the developer knows full well, there will be another buyer right behind you, who will submit to asking price, broker, sols, request.

Fortunately, we have proceeded, and valuation has been completed at the agreed price, and now just a/w exchange of contracts.

The overwhelming feeling we had throughout the process though is the scheme itself is brilliant as long as you understand the pro's con's - But the developers our out to extract as much money as possible from all that use it.

grizzly1911

mikedaveross wrote: »

I wonder what the developer is 'losing' per Help to Buy sale then...surely not as much as the 5-10% lost in a lower offer?

Do specific Help to Buy mortgages have a higher interest rate/arrangement fee to recuperate the lender?

Excuse my pessimism, but I'm not entirely keen on the way the scheme insists a financial adviser assesses your situation & gives permission to the developer proceed, along with details of the maximum loan you can afford...

In the dim and distant past if you wanted a high LTV mortgage you had to buy a Mortgage Indemnity Guarantee (cost usually added to the mortgage) which was a more transparent way of doing business. At least you knew what the additional cost wa rather than being "wrapped" in the price.

Why shouldn't a bona fide agent check eligibility, credibility and affordability? There would be little point taking the laissez faire approach pre the crash especially when you are expecting a taxpayer "guarantee".

Hamish may be happy to lend against a pulse.

Graham_Devon

I just love the fact that people are happy they got some grass with their purchase!

I know it's the way things work, but it just amuses me. It's a bit like celebrating you got some tyres with your new car purchase!

On a secondary note, I didn't think they could force you to use their own financial advisors and solicitors anymore?

thedalmeny

Graham_Devon wrote: »

I just love the fact that people are happy they got some grass with their purchase!

I know it's the way things work, but it just amuses me. It's a bit like celebrating you got some tyres with your new car purchase!

On a secondary note, I didn't think they could force you to use their own financial advisors and solicitors anymore?

I don't think it's celebratory, purely an item which was included as part of a deal since rear turf is often seen as an additional cost...

They can't force you to use their broker or solicitors, i personally used the builders broker and my own solicitor. There is only a handful of mortgages for Help To Buy, so using the builders broker doesn't really make much difference..

You'll find most builders like you to use their broker because the broker will often ring the builder and confirm to them directly your eligibility for Help To Buy, if anything it can often work in your favor because a builder will be informed by a third party on your ability to proceed. In my experience this gave you more negotiating power, indicates to the builder you're a serious buyer and not purely window shopping.