Firstbuy Scheme Nightmare

Jamieh151

Hello All,

New member here I am struggling to get any clear advice in what would be the best thing for me to do next?

As briefly as possible my situation is-

I purchased a new build flat in Merseyside in 2010 from Taylor Wimpey using the firstbuy scheme.

The purchase price was £109,000
Deposit £5000
Mortgage £75000
Equity Loan from developer/Government- £30,000

Current mortgage balance - £65,000

We are also caught up in the 'leasehold scandal' with currently a doubling every 10 years ground rent.

We have our first child on the way so want to figure our way out of this mess. Currently the asking prices for comparable flats on the estate range between £75,000 - £85,000. And under the T&c's of the scheme we have to pay back 30% of the current market value.

Does anyone have experience of re-mortgaging to pay off the equity loan? And I’m not sure it would even be possible with the drop in value!!

Apologies for the incoherent post, Any advice would be very much welcome.

:money:

sal_III

I assume that by firstbuy scheme you mean Help To Buy equity loan.

You won't be able to remortgage without putting more money in, as currently you are in negative equity. Even at the most optimistic price of 85k you owe the mortgage lender 65k and the HTB agency 25.5k.

I remember reading somewhere that TW were working towards fixing the doubling ground rent leases and paying out compensations for the debacle, might be worth asking/reading about that as if you manage to remove the clause from your lease, this might restore the value of your property.

kingstreet

HTB Equity Loan only started in April 2013.

Before that, the shared equity forerunners were FirstBuy and HomeBuy Direct.

Target manages them all;-

https://www.myfirsthome.org.uk/

Jamieh151

Thank you for your replies.

Yes the firstbuy scheme was pre Help to buy and Target who administer the scheme are not much help.

Just as I feared! It's a bit of a catch 22 really as we dont want to pay into a depreciated asset but in the meanwhile the interest payments on the equity loan are racking up!

The so called ground rent assistance scheme offered by Taylor Wimpey is simply an offer to change the 10 year doubling lease to an RPI linked increase, so just swapping a onerous lease for a slightly less onerous one (And inserting a clause that we cannot sue them if we accept the offer!).

Thanks.