Share to buy - right time to buy?

Mimi89

I've been offered a 25% share to buy flat in London due to completion this autumn (I'm buying alone but will by living with my boyfriend). With all this heat in the property market, I'm now nervous to proceed. I'm 27 and planning to buy somewhere bigger with my bf out of London by the time we're 32 with the 'benefit' of already being on a property ladder.

Two questions I've got:

Are the Share to buy properties just as vunrable as the private market if there was a crash? usually the housing association help sell your property first to first time buyers before it goes onto the private market - I'm wondering if this protects me more if there was a crash.

Second:
I'm (hoping) to get a 75% LTV as I'm under the impression this will lower my interest rates considerably more than having say 80%LTV.. is this the case?

Thanks in advance :cool:

Cakeguts

Start with the first question and think it through. If there is a crash the value of your property will go down in line with all other properties. So assuming your property goes down in value by 10% you want the housing association to sell the property at the same price you bought it at to a first time buyer so asking them to pay 10% more than it is worth? Why would anyone pay that? Why should a housing association absorb your loss of value?

Second question. What did your mortgage provider say?

The reason why you buy a house is because you want to live in something you own? No one can predict what will happen to house prices in the future. At the moment it looks from your question as if you are trying to bet on the difference between the price of a house in London and some imaginary future place that you might want to live in.

New properties have a premium on them because they are new. Like cars that drop in value as soon as they leave the show room. As soon as a property is no longer new and has been lived in it becomes the same as any other non new property on the market. So depending on how much premium there is on your new home by the time you are 32 your share could be either worth less than you paid for it or have just got to that level or more it depends on what the prices do but new properties tend to go down when they are second hand. So factor that in. While you are factoring that in remember that sometimes the rest of the country doesn't follow the London price increases so depending on the area you are buying in now and the imaginary area outside London you might find that you are in the same position finance wise as you would be if you just moved out of London now.

Buy a house to live in not to help you finance another property somewhere else in the future.