Shared equity scheme

dontshootthemessenger

Fergie73 wrote: »

That Persimmon thing looks like very bad news for the buyer.

For one thing, if the builder is doing it because they can't find buyers willing or able to pay their full £133,000 *market price* then the house is over-priced. If the only people who can afford to buy it can only afford £99,000 then that is it's market value, not 75% of it's market value!

If you sell the house, you have to pay back 25% of the market value. If you also can't find anyone willing or able to pay £133,000 and have to take less, there is no way Persimmon is going to change it's definition of market value downward, so you end up paying them 30-odd grand, minimum, no matter what the sale actually achieves. Hence, you could be left with a loss.

If you don't sell up, they ask you to pay back the 25% of market value after 10 years. They don't say how this is calculated, or by whom. So you're left with a financial obligation of, minimum again, 30-odd grand in 2017 but they could ask anything they wanted. If house prices rise substantially - say it's worth £300,000 in 2017 - that leaves you with an even bigger obligation because it's 25% of whatever they say it's worth.

Seems to me that the buyer is taking all of the risk while the builder can't possibly lose and is palming off unsellable property onto people. And as for once in a lifetime opportunity, do you really think with those can't-lose figures the builders will be restricting this kind of deal in the future?

Sorry to be negative, but I wouldn't touch it with a ten-foot pole. Renting may seem like dead money, but at least there's no financial risk involved. With buying there is risk, but they're known risks that you can take into account. This looks like the worst of all worlds.

Agreed. This promotion is a desperate scam to dupe even more desperate punters into a lifetime of financial slavery and misery. Please don't fall for it. In a year or two, this sort of property will likely be reselling at a substantial discount. The property ladder is about to turn into a property snake and (according to the IMF) it's a long way down. Why don't you enjoy the freedom afforded by renting for a while, save yourself a nice deposit, and buy somewhere you can actually afford in a year or two.

johnny_storm

If you buy now, you will be buying when property is at its most expensive.

Renting is not a waste of money, say for instance you rent for one year and this costs you £6000. Say during this time your ideal house falls to £80k, you saved yourself £14k. When you factor in interest rates over the life of the mortage you probably save yourself three times that much.

Please do not believe vested interests, like Estate Agents, Building societies etc. Prices are only going one way, and its down, probably sharply and within the next 12 months.

Good luck whatever you decide.

Pez2

What are the terms of the deal?

If the value of the property were to decrease to £66K say, would the other shareholder still have a 33% stake in the equity (i.e. £22k), or does their stake remain fixed at £31.5k?

Frags

Fergie- Firstly there was no mention of £133K so not sure where u have got htis from??? The market value is £97,500 which is very very low indeeed for this neck of the woods, secondly it isnt a case of them not being able to find buyers, this is through an Affordable housing scheme and is specificly for people witha low income, this is a legitamate company being dealt with through the council to help people who dont have a home to call there own (violins please lol). This property is on a 999 year lease hold so they cant make me sell after 10 years or so.

Remember i am not buying directly from the builder i am buying through an affordable housing scheme in conjunction with the council, these flats are only availbale to a very limited amount of people, it isnt some get rich quick scheme it to genuinly help housing problems, i appreciate the developer is gaining money from this of course they are they wouldnt do it other wise.

The mortgage on this property is over £150 less a month than renting.

Gav p, i have a 67% stake, their 33% stays the same.

dolce_vita

You may be interested to know that this thread is also being discussed on another internet forum.

See HERE

Be warned though, the posters there are not quite as sympathetic as we are on this forum.

Frags

All i can say dolce is what a bunch of nasty T***s, they should spend more time helping people out with their finance issues and less time slagging people off!! People like that make my blood boil!!!!

dolce_vita

There's a lot of crackpots on that site that's for sure.

Frags

Nothing like kicking a girl when she is down hey!!

johnny_storm

dolce_vita wrote: »

Be warned though, the posters there are not quite as sympathetic as we are on this forum.

Isnt it better to give someone advice not to make a mistake, then offer sympathy after its gone wrong? I know which Id prefer.

Actually I think its a great forum to read through and form your own opinion.

dolce_vita

johnny_storm wrote: »

Isnt it better to give someone advice not to make a mistake, then offer sympathy after its gone wrong? I know which Id prefer.

Actually I think its a great forum to read through and form your own opinion.

Couldn't agree more.

Perhaps sympathy wasn't the word I was looking for.
Not as,........accomodating?

There are some f*ckwits on there though and all the dyslexia stuff on the thread is pathetic.