Help to Buy - Do you regret it?

Miranda25

amnez said:

No regret.

I think Help to Buy gets a bad rap on here but it’s a great solution for many people who would otherwise not be able to get on the ladder. I believe the key is financial responsibility/discipline which is an individual quality. To use myself as an example; I took the lowest possible loan amount and worked out the numbers with an intention of paying it off by the end of the 5 year period. So I still have a ‘house deposit’ fund paid into a high interest account to grow my payment. Any house price decline would be to my advantage; and if there is house price increase I would be participating in that based on the amount of personal equity I contributed. Seems fair to me.

I also think the new build hate in the U.K. is a bit shortsighted. Granted there are disadvantages with leaseholds and service charge but for some the benefits outweigh. I wanted to buy off a developer as a first time buyer because I didn’t want to deal with a chain; wanted a brand new place that hadn’t been lived in and didn’t want to fork out money for structural redecoration. I also don’t want to deal with building upkeep even though I have a small terrace garden and really wanted a 2 bed 2 bath.

As for the premium, it’s up to buyers to negotiate pricing down, especially if you’re not looking at a forever home. Don’t compromise on that and buy for list price however much you want the place; there’ll always be another. It doesn’t help to live in a society that advocates home ownership (and really you don’t truly own till you’ve paid off your mortgage)  as soon as possible but criticises every form of government support provided to the youth.

Best of luck with your prospective purchase.

Amnez,
Is it possible to negotiate prices on new builds? I thought they are fixed and we should stick to their price list?

With HTB properties what happened after 5 years time? I will start to pay interest but can I still try to pay off equity part (40% in London) in addition to mortgage element? Or I will pay only interest after 5 years time and equity part will be paid only on selling of a property? Thanks.

getmore4less

Of course you can make offers on houses. 
For many the number crunch of a 95% mortgage against a 75%HTB on 80% frees up a lot of cash in 5 years which if saved or used for overpayment gives an exit strategy.

Worth the risk over continuing to rent and save slowly.

For some it might mean skipping a move by getting somewhere bigger. 

PJBRFC

Miranda25 said:

amnez said:

No regret.

I think Help to Buy gets a bad rap on here but it’s a great solution for many people who would otherwise not be able to get on the ladder. I believe the key is financial responsibility/discipline which is an individual quality. To use myself as an example; I took the lowest possible loan amount and worked out the numbers with an intention of paying it off by the end of the 5 year period. So I still have a ‘house deposit’ fund paid into a high interest account to grow my payment. Any house price decline would be to my advantage; and if there is house price increase I would be participating in that based on the amount of personal equity I contributed. Seems fair to me.

I also think the new build hate in the U.K. is a bit shortsighted. Granted there are disadvantages with leaseholds and service charge but for some the benefits outweigh. I wanted to buy off a developer as a first time buyer because I didn’t want to deal with a chain; wanted a brand new place that hadn’t been lived in and didn’t want to fork out money for structural redecoration. I also don’t want to deal with building upkeep even though I have a small terrace garden and really wanted a 2 bed 2 bath.

As for the premium, it’s up to buyers to negotiate pricing down, especially if you’re not looking at a forever home. Don’t compromise on that and buy for list price however much you want the place; there’ll always be another. It doesn’t help to live in a society that advocates home ownership (and really you don’t truly own till you’ve paid off your mortgage)  as soon as possible but criticises every form of government support provided to the youth.

Best of luck with your prospective purchase.

Amnez,
Is it possible to negotiate prices on new builds? I thought they are fixed and we should stick to their price list?

With HTB properties what happened after 5 years time? I will start to pay interest but can I still try to pay off equity part (40% in London) in addition to mortgage element? Or I will pay only interest after 5 years time and equity part will be paid only on selling of a property? Thanks.

They will only insist on you paying the interest after 5 years. You can decide to pay some of the loan off but it has to be done in lumps of at least 10% if I remember correctly. You do not have to sell to pay it off. 

The simplest way to pay it off without selling would be by remortgaging, hoping you've built up some equity in the first 5 years. 

willz45

It worked for us but without a crystal ball there is no way of ever knowing!!

we used it to get in the property ladder and always knew we weren’t buying our forever home so it was a gamble and it paid off. We sold our house for 25k more than we bought it for and the valuation office agreed. We had to incorporate the 80k we borrowed into our new mortgage but I’m happy with that as I know I’m paying the debt off as opposed to just servicing it. It in the 5 years you can pay it off then great alternatively if you sell and can pay it off at that time then also great. I don’t have regrets but it all worked out for me, as others have mentioned it didn’t work for them so there is no way of ever knowing 

Miranda25

willz45 said:

It worked for us but without a crystal ball there is no way of ever knowing!!

we used it to get in the property ladder and always knew we weren’t buying our forever home so it was a gamble and it paid off. We sold our house for 25k more than we bought it for and the valuation office agreed. We had to incorporate the 80k we borrowed into our new mortgage but I’m happy with that as I know I’m paying the debt off as opposed to just servicing it. It in the 5 years you can pay it off then great alternatively if you sell and can pay it off at that time then also great. I don’t have regrets but it all worked out for me, as others have mentioned it didn’t work for them so there is no way of ever knowing 

I think you are right, it is gambling with HTB scheme.
It would be helpful if people mention areas where they had HTB property. Then other people who thinks about using HTB may try to see some patterns in what areas luck and where is loss :-)
Or if it is not location then what factors contribute that for some people HTB worked and for some people did not work?

There is another thread that HTB is overvalued for some people:
https://forums.moneysavingexpert.com/discussion/6165852/help-to-buy-overvalued#latest

willz45

Miranda25 said:

willz45 said:

It worked for us but without a crystal ball there is no way of ever knowing!!

we used it to get in the property ladder and always knew we weren’t buying our forever home so it was a gamble and it paid off. We sold our house for 25k more than we bought it for and the valuation office agreed. We had to incorporate the 80k we borrowed into our new mortgage but I’m happy with that as I know I’m paying the debt off as opposed to just servicing it. It in the 5 years you can pay it off then great alternatively if you sell and can pay it off at that time then also great. I don’t have regrets but it all worked out for me, as others have mentioned it didn’t work for them so there is no way of ever knowing 

I think you are right, it is gambling with HTB scheme.
It would be helpful if people mention areas where they had HTB property. Then other people who thinks about using HTB may try to see some patterns in what areas luck and where is loss :-)
Or if it is not location then what factors contribute that for some people HTB worked and for some people did not work?

There is another thread that HTB is overvalued for some people:
https://forums.moneysavingexpert.com/discussion/6165852/help-to-buy-overvalued#latest

This was in Hertfordshire and we sold just before the pandemic, we found our dream house so I accepted a lower offer than I probably would have just to purchase the new house. It was valued at between 50-75k more than what we bought it for mid 2016

bucksbloke

No regrets, bought our first HtB property at the bottom of the market in 2013. Sold for 100k more than we bought it for 6.5 years later. Paid back 20k more than we borrowed. Cleared all of our debts and put down a large deposit on an even bigger house. So thankful for this scheme. I don't think it it good for short term use - but houses prices grew 33% over the time period we lived in our old house.