Advice required - First time London buyer, HTB, Shared Ownership..

blittleboy

Hi all,

I'm starting to look at getting onto the property ladder and would appreciate some advice from yourselves. My main issue that I can see is that although I earn a reasonable amount for my age (roughly £58,000), the size of mortgage that I am likely to be offered is going to end up nowhere near the amount required to buy a property in or around London, leaving me with a huge gap that I need to fill with the deposit (I currently have appx. £30,000 available).

With this in mind I have been researching into some of the various schemes (Help to Buy, Shared Ownership) to see whether these might help my situation.

What I was really after was some frank advice surrounding the schemes. They both sound great on paper, but does anyone have any experience when it actually comes to for example paying off the loan? Are the repayments affordable? Is it actually likely that you will be able to pay off the loan when you sell the property? From what I could work out it seemed that it would be more likely that you would fall into negative equity.

I'm just trying to work out what my options are - if none of these schemes are really feasible in the long term then I may need to just consider waiting it out and continuing to save for a much bigger deposit while I attempt to find a partner to split the cost with!!

Thanks
Ben

brit1234

Both in my eyes are scams to get the builders more money. I have studied them both and there are some really big draw backs.

Help to buy with the equity loan can put you in negative equity very easily if you believe house prices are inflated and looking like falling which they are doing in many parts of London and its spreading. Then you have to pay interest on the equity loan after 5 years which is a timebomb for many owners desperate enough to use this scheme. The only real winner is the builder who can charge a higher price under the scheme.

Shared ownership is a turd pool of badness. Lots of extra charges through out the life time of the ownership. Hard to resale, many restrictive conditions, service charges and rents going up above inflation. Again only the builder wins.

Tour on a good wage, just keep saving that deposit and buy normally. Prices are finally starting to come down due to a huge range of issues from higher buy to let costs, hugely reduced cash from foreign investors, stamp duty changes and mortgage tightening here now and more coming in.

Rich2808

When you say in and around London would you include areas like Sutton, Romford, Bexley and Barking - you could buy outright in those areas. Not glamorous - but then the nicer places are way beyond what any normal person can afford.

Help to buy - yes but what happens after 5 years. New builds in much of London are crazily overpriced even relative to the mad market.

Shared ownership - well it gets you security if tenure and potentially a bigger property in a nicer area. If housing is the priority rather than this being an investment it's an option. But not ideal.

Both are designed to make developers and housing associations wealthy - not first time buyers.