Help to Buy Scheme - should we?

Sparky67

We are relocating for work reasons from the northernmost part of the north midlands to the south coast and obviously property prices are somewhat different down here.

We are selling our 4 bed detached, but won't get a garden shed for what that is worth where we are now. We are therefore having to look at having to increasing the mortgage by £100,000 - £120,000 ( basically doubling it) to get a 2 or 3 bed property. Technically we should have no issue borrowing that amount, but I think we would struggle with the repayments, and I don't want to spend the rest of our working life worrying about meeting the mortgage and not being able to afford anything else (we are late 40s and the children have now flown the nest). I want to have a bit of a cushion for little extras like a holiday once in a while...

We have been looking at the Help to Buy scheme on a new build property, as that means we could afford something reasonable without over-committing ourselves? Are these good/bad/indifferent? I have had a shared ownership property in the past which is sort of a similar thing and that was good for me at the time... Can you get any mortgage on the market with Help to Buy or are you restricted?

Any advice would be gratefully received.

ed67812

We have talked about HTB and would use it if we found the right house. My question for you would be what is your end-game plan to pay off the 20% equity loan. You are worried about spending your working life to meet the repayments on a normal mortgage but won't you spend your working life worrying about having to pay off the equity loan?


I know a lot of people are really against HTB but I personally think that there might be situations where it makes sense; like everything, it depends on circumstances.


One thing I have noticed is that I'm sure HTB new builds are being deliberately overpriced in some cases as people are being suckered in by the headline figure of 80% of the full price.

jacko74

I do wish people would use the full and proper title for HTB... It's actually called a Help Builders to Sell Overpriced Newbuilds Loan.

kingstreet

In many areas, newbuild prices are being driven by demand and the release price is trying to reflect where prices will be when the property is finished in perhaps six to eight months' time; not provide potential buyers with a "hedge" against general price increases they can use to sell on.

One of our sites in Milton Keynes sees potential buyers queuing outside from Thursday for property being released on Saturday. It's worse than the Harrods sale where people used to sleep outside.

FWIW property sold on the site two years ago is commanding prices similar to the newbuilds on the later section of the development.

Jon_B_2

kingstreet wrote: »

FWIW property sold on the site two years ago is commanding prices similar to the newbuilds on the later section of the development.

Shhh. Don't want to damage those pre-conceptions from the new build haters that everyone pays a massive premium.

alchemist.1

The help to buy /new build houses has generally been more expensive. This is the trade off with trying to get on the property ladder without a good deposit.

Not something i'm interested in but i can see why people go down this route as long as they have their eyes open when buying the property and they are aware that when they look to sell there will be price differential.

ethank

I know a lot of the big lenders in this market will now only provide a HTB mortgage to first time buyers, so use a HTB specialist broker to assist you with finding a suitable mortgage.