Is help to buy actually worth it?

seradane

buel wrote: »

Sorry, I should rephrase it as - do you only pay the interest on a mortgage for the first five years or so?

Depends entirely whether the mortgage is interest-only or repayment.

buel

It’s repayment but still I thought the first few years were paying the interest only?

[Deleted User]

All payments are a mix of capital and interest.

ethank

I made a 100k profit over six years and paid £17k back to HTB. At that time I just could not have done it on my own. It gave me a leg up and made a lovely home really affordable.

ryankirkpatrick2

Nobody knows until the help to buy scheme closes. If house prices stay the same or rise and you have repaid your 20% then its great but, if the house prices fall then you end up in a house that you've overpaid for or in negative equity. To me it seems that builders have been taking complete advantage of the scheme and inflating prices in line with the extra 20% and they will fall off when the scheme changes in April next year. Every sales office you walk into has signs and posters up about the help to buy scheme, ask yourself if they would be so bothered about it if it weren't lining their pockets so much? Its easy to find a house on rightmove built and sold by a developer in 2012 (before the scheme was introduced) and compare it to the same house built by the same developer now and see that the scheme has bumped the price for the EXACT SAME house massively.Try searching for Redrow houses sold in 2012 and compare the same house to a new one being sold now and get back to me.....

sal_III

ryankirkpatrick2 wrote: »

Nobody knows until the help to buy scheme closes. If house prices stay the same or rise and you have repaid your 20% then its great but, if the house prices fall then you end up in a house that you've overpaid for or in negative equity. To me it seems that builders have been taking complete advantage of the scheme and inflating prices in line with the extra 20% and they will fall off when the scheme changes in April next year. Every sales office you walk into has signs and posters up about the help to buy scheme, ask yourself if they would be so bothered about it if it weren't lining their pockets so much? Its easy to find a house on rightmove built and sold by a developer in 2012 (before the scheme was introduced) and compare it to the same house built by the same developer now and see that the scheme has bumped the price for the EXACT SAME house massively.Try searching for Redrow houses sold in 2012 and compare the same house to a new one being sold now and get back to me.....

There is no doubt that HTB equity loan propped the housing market and helped the property prices rise. But it wasn't the only factor. Looking at old listings is useless, we all know the prices have gone up significantly since 2012, but it's more due to ever supply vs. demand and rampant speculations of foreign investors, than HTB alone.

If house prices fall you are actually better off with the HTB, since you have to repay less. No such luxury of you bought "old build" or new build without HTB.

ryankirkpatrick2

You wouldn't be better off if you paid £320,000 for a house that was only worth £280,000. You would be in negative equity.

kingstreet

ryankirkpatrick2 wrote: »

Its easy to find a house on rightmove built and sold by a developer in 2012 (before the scheme was introduced)

Prior to HTB, FirstBuy and HomeBuy Direct were forerunner shared equity products offered on newbuilds. The concept didn't start in 2013.

sal_III

ryankirkpatrick2 wrote: »

You wouldn't be better off if you paid £320,000 for a house that was only worth £280,000. You would be in negative equity.

A house is worth as much as someone is prepared to pay for it.

If I paid £320k at the time and the bank agreed that it's value was £320k hence suitable security - then the house was worth £320k

You don't seem to understand what negative equity means - hint it's not when your property value is less than what you paid for it. It's when your property value is less than the money you still owe in relation to it.

janoire

I have had my initial application for over 55’s help to buy scheme . Now what do I do? Where do I look for houses/flats, no mortgage yet - where do I go to see if I can get one. I need step by step help please.