Help to Buy Registration

Willem-de-Blois

I am about to Register for Help to Buy South and Bath & NE Somerset Council to see what options will be open to me regarding a shared-ownership or affordable housing purchase from the local Registered Social Landlord/ Developer.

Before I submit my personal, employment and financial details, can anyone tell me what information Help to Buy is looking for and any potential dealbreakers that could crop up?

Willem-de-Blois

I called the RSL who is selling/ leasing the shared ownership properties where I currently live.


The answer to my question is probably moot as despite saving a considerable amount of money for a deposit, I am slightly over the 40% net income to be spent on the property which is deemed to basis of affordability.


All this to buy a mere 35% of the property.

ethank

If you are going through Shared Ownership - they have to consider your housing need as part of the process.
You wont be able to buy a 3 bed, if you are on your own, if there are people with more need for a 3 bed.

If you can afford it, my philosophy is that better to buy something you own, than something that you part own.

ethank

Have you thought of buying through one of the other Help to Buy schemes - https://www.gov.uk/affordable-home-ownership-schemes/overview

Willem-de-Blois

ethank wrote: »

If you are going through Shared Ownership - they have to consider your housing need as part of the process.
You wont be able to buy a 3 bed, if you are on your own, if there are people with more need for a 3 bed.

If you can afford it, my philosophy is that better to buy something you own, than something that you part own.

I agree with your philosophy as if I am going to make the effort to get out of the ever deepening rental trap, I should completely leave paying rents.


I have however the realities of wanting to remain living in Bath to consider.

Willem-de-Blois

ethank wrote: »

Have you thought of buying through one of the other Help to Buy schemes - https://www.gov.uk/affordable-home-ownership-schemes/overview

Thanks for this, this narrows down my options a bit.


Is HomeBuy Direct still in existence (interest free government loan of up to 20% of the property price for 10 years)?

Kevie192

If you have a low income, as this post would suggest, you are going to be even more susceptible to movement in interest rates etc. and with the new affordability rules if you can't afford to buy 35% of a house you are really going to struggle to buy 100% of a house unless you drastically increase your income.

Renting is a great option for people on a low income. You get to enjoy a reasonably static rent payment and don't have unsuspected bills from the boiler breaking etc. Don't get caught in the trap of this country's collective thought that you MUST own property to be successful in life.

Willem-de-Blois

Kevie192 wrote: »

If you have a low income, as this post would suggest, you are going to be even more susceptible to movement in interest rates etc. and with the new affordability rules if you can't afford to buy 35% of a house you are really going to struggle to buy 100% of a house unless you drastically increase your income.

Renting is a great option for people on a low income. You get to enjoy a reasonably static rent payment and don't have unsuspected bills from the boiler breaking etc. Don't get caught in the trap of this country's collective thought that you MUST own property to be successful in life.

Hello Kevie,


I am on £24000 pa gross and I have savings of around £52k.


Yet 35% of a property near where I currently live is just beyond me. This is apparently because the services charges nearly equate to the monthly rent of the 65%.


I could easily find a lodger to rent an extra room but understandably Help to Buy can only take me current income into account.


Elsewhere, the usual asking price for a 1 or 2 bedroom flat is around £160k.

Kevie192

Willem-de-Blois wrote: »

Hello Kevie,

I am on £24000 pa gross and I have savings of around £52k.

Yet 35% of a property near where I currently live is just beyond me. This is apparently because the services charges nearly equate to the monthly rent of the 65%.

I could easily find a lodger to rent an extra room but understandably Help to Buy can only take me current income into account.

Elsewhere, the usual asking price for a 1 or 2 bedroom flat is around £160k.

There are 24 flats in Bath for sale with an asking price of under £160k on Rightmove.

With savings of £52k, you could put down at least £45k of that I would guess. That leaves you with £115k mortgage at most which online calculators would suggest you can afford on your income.

Problem solved

Willem-de-Blois

Thanks for taking the time to look. If I can get away with it, I'd like a 2-bedroom flat to future-proof a bit.


I have seen something of interest for £190k. Would a 20% government equity loan work to bring this figure to £152k? With the £45k deposit that you suggest, the mortgage would be based on £107k.


Is this a reasonable starting point to visit the estate agent with given my current salary?

kingstreet

Is it a newbuild?

HTB - Equity Loan is newbuild only.

Lenders factor 3% or 4% of the loan into affordability and ground rent and service charges also reduce the amount you can borrow.

A salary of £24k means a maximum mortgage of £120,000. If you then have the above charges taken into account, say £240 per month, your maximum mortgage falls to £95,820.

You need to work with lender affordability calculators to establish what you can borrow based on your personal circumstances, or ask an independent broker to do it for you.