Has anyone used HomeNow?

[Deleted User]

GDB2222 said:

From the example on their website, they may be charging above market rents. £17k pa rent on a £300k property. Since the deal they offer is specific to you and the property that you choose, it’s not possible to say whether it is definitely a good or a bad deal. 

You are currently paying under £600 a month for a tiny flat.  You are thinking of using this company for a larger flat, paying almost double the rent, in the hope that you will get 30% of any rise in price after 5 years.  Say the property increases by £20k, you will get under £7k.  I could be a lot less depending on whether 'profit' is calculated after they take off whatever fees they feel like taking off.  And what house can you buy with a deposit of £7k, whilst you have the joy of paying double the rent you are paying now (you will need to save more of a deposit), if you are struggling now, how are you going to manage when paying double rent?) 

It just seems to be a way of making life more difficult for you.

If you go on the debt free wannabe board, with a list of outgoings and income, they may be able to help you cut some costs and save more without taking risks like this company offers. 

Remember, they are doing this for a reason.., to make money whatever way they can.  The frequent name changes are significant.  They are trying to make tracking what they do over time difficult.  That's the biggest red flag of all.

Stardustjunkie

deannatrois said:

GDB2222 said:

From the example on their website, they may be charging above market rents. £17k pa rent on a £300k property. Since the deal they offer is specific to you and the property that you choose, it’s not possible to say whether it is definitely a good or a bad deal. 

You are currently paying under £600 a month for a tiny flat.  You are thinking of using this company for a larger flat, paying almost double the rent, in the hope that you will get 30% of any rise in price after 5 years.  Say the property increases by £20k, you will get under £7k.  I could be a lot less depending on whether 'profit' is calculated after they take off whatever fees they feel like taking off.  And what house can you buy with a deposit of £7k, whilst you have the joy of paying double the rent you are paying now (you will need to save more of a deposit), if you are struggling now, how are you going to manage when paying double rent?) 

It just seems to be a way of making life more difficult for you.

If you go on the debt free wannabe board, with a list of outgoings and income, they may be able to help you cut some costs and save more without taking risks like this company offers. 

Remember, they are doing this for a reason.., to make money whatever way they can.  The frequent name changes are significant.  They are trying to make tracking what they do over time difficult.  That's the biggest red flag of all.

Thank you. We don’t struggle at the moment at all, we save a healthy amount every month but we’re paying for our wedding, clearing a couple of small debts and saving for a mortgage. We take on extra work whenever we get the opportunity and we both have decent jobs for the area. Unfortunately rents in the area are extortionate, second highest area next to London from what I have researched. In order to start a family we would need to move anyway, so it’s whether or not there’s a risk moving with HomeNow or renting somewhere more expensive - we’d be in the same financial situation either way.

i will definitely check out the debt free board you suggested, thank you. 

daveyjp

Working some maths on the proposal it looks like the system has a few flaws, but not for the company.

Assume 80% LTV ratio.
Rent payment is 5% of value.

2020 House price £200,000.  Deposit required to buy £40,000.  Annual rent £10,000.

2025 house value £220,000.  Deposit required £44,000.  Rise in value £20,000.  30% is £6,000.  Shortfall for deposit £38,000.  Total rent paid £50,000.  So £50,000 has 'saved' you £2,000 on the mortgage deposit required.

2025 house value £250,000.  Deposit required £50,000.  Rise in value £50,000. £15,000 towards deposit, deposit shortfall £35,000.  

Imagine things go crazy.  Sounds OK knowing you are in for 30% of the increase.

2025 house value £400,000.  Deposit £80,000.  Rise in value £200,000.  £60,000 towards deposit, only £20,000 short.  However you also need the income to service a £320,000 mortgage which will be far more than £10k a year rent you were paying.

Could you afford it?

SpiderLegs

Yes It’s difficult to work out a scenario where this is a better long term prospect than just continuing to rent cheaply and save a bigger deposit.
 

Even on the OP’s low guesstimate of 1000/mth rent on this 270k house that’s 24k extra they’ve spent. In order to recoup that from this HPI the property needs to increase by 80k.
Nearly 30% hpi over five years in current climate? Hmm.

plus of course you are locked in, so you’ve got no choice other than to sit out that five year AST and buy the property if you want to get back that extra rent you’ve paid.

Oh, plus you’ve got to pay rent insurance on top to protect the company.

And I bet there’s a nice fat up front fee to be paid for them to assess the property you expect them to buy for you. What happens when they tell you it’s not suitable, or it gets sold to someone else?

And i bet they won’t be paying for anything other than on the cheap emergency repairs while you’re paying them an extortionate rental rate.

seems like a great way for a property Investment company to make money by mitigating their risks and a crap way for someone to spend even more money on rent while committing to buying a house that they may not want in five years time. 

GDB2222

You mentioned that you are saving for a wedding. My wife and I have been married for over 40 years and we have never once regretted having an incredibly cheap wedding. We spent the money on our house, instead. 

AnotherJoe

Stardustjunkie said:

I feel like I know nothing, and I work as a marketing manager for an international private healthcare company. Facebook ads don’t scream scam to me, they’re a really effective form of advertising if done correctly. GoDaddy doesn’t scream red flag either.

I am taking all of this on board though and it’s making me think about things differently. Please keep sharing concerns/red flags or experiences. Thank you. 

Finance ads on facebook should. OK if they are selling cosmetics, cat litter or cute baby toys. But There have been so many finance scams on Facebook that the default should be, "it's a scam".
FB you may recall didn't give a stuff about the scammers using dragons den and Martin Lewis's names and faces on their ads until they took legal action against FB. Like Google they don't care who makes the ad or how dodgy it is, or how much their customers get ripped off, since they get their money up front. 

GDB2222

SpiderLegs said:

Yes It’s difficult to work out a scenario where this is a better long term prospect than just continuing to rent cheaply and save a bigger deposit.
 

Even on the OP’s low guesstimate of 1000/mth rent on this 270k house that’s 24k extra they’ve spent. In order to recoup that from this HPI the property needs to increase by 80k.
Nearly 30% hpi over five years in current climate? Hmm.

plus of course you are locked in, so you’ve got no choice other than to sit out that five year AST and buy the property if you want to get back that extra rent you’ve paid.

Oh, plus you’ve got to pay rent insurance on top to protect the company.

And I bet there’s a nice fat up front fee to be paid for them to assess the property you expect them to buy for you. What happens when they tell you it’s not suitable, or it gets sold to someone else?

And i bet they won’t be paying for anything other than on the cheap emergency repairs while you’re paying them an extortionate rental rate.

seems like a great way for a property Investment company to make money by mitigating their risks and a crap way for someone to spend even more money on rent while committing to buying a house that they may not want in five years time. 

That’s not quite right, as you are ignoring that the OP will be living in a much nicer home for the five years. It sounds like where they are now is a bit too 'edgy' for them and unsatisfactory to start a family. So, really a fairer comparison would be renting somewhere better, which would obviously cost more than they are currently paying.


I agree that the maths is straightforward. In order to end up with a 10% deposit from this scheme, the property value has to go up around 30%. I’m not convinced that will happen, but this forum is filled with people convinced that prices can only keep spiralling upwards. 

The 5 year AST is a two edged sword. Lots of renters complain that they don’t have security, but on the other hand rentals are Usually incredibly flexible compared to ownership.

SpiderLegs

GDB2222 said:

SpiderLegs said:

Yes It’s difficult to work out a scenario where this is a better long term prospect than just continuing to rent cheaply and save a bigger deposit.
 

Even on the OP’s low guesstimate of 1000/mth rent on this 270k house that’s 24k extra they’ve spent. In order to recoup that from this HPI the property needs to increase by 80k.
Nearly 30% hpi over five years in current climate? Hmm.

plus of course you are locked in, so you’ve got no choice other than to sit out that five year AST and buy the property if you want to get back that extra rent you’ve paid.

Oh, plus you’ve got to pay rent insurance on top to protect the company.

And I bet there’s a nice fat up front fee to be paid for them to assess the property you expect them to buy for you. What happens when they tell you it’s not suitable, or it gets sold to someone else?

And i bet they won’t be paying for anything other than on the cheap emergency repairs while you’re paying them an extortionate rental rate.

seems like a great way for a property Investment company to make money by mitigating their risks and a crap way for someone to spend even more money on rent while committing to buying a house that they may not want in five years time. 

That’s not quite right, as you are ignoring that the OP will be living in a much nicer home for the five years. It sounds like where they are now is a bit too 'edgy' for them and unsatisfactory to start a family. So, really a fairer comparison would be renting somewhere better, which would obviously cost more than they are currently paying.


I agree that the maths is straightforward. In order to end up with a 10% deposit from this scheme, the property value has to go up around 30%. I’m not convinced that will happen, but this forum is filled with people convinced that prices can only keep spiralling upwards. 

The 5 year AST is a two edged sword. Lots of renters complain that they don’t have security, but on the other hand rentals are Usually incredibly flexible compared to ownership.

Yes I am ignoring the fact they get a nicer home for five years because they can do that now without using this scheme.

and since the aim for the OP is to be able to buy a property, the question is does this scheme represent a better way to do that than their current scenario. I kind of pointed that out in my first sentence.

GDB2222

SpiderLegs said:

GDB2222 said:

SpiderLegs said:

Yes It’s difficult to work out a scenario where this is a better long term prospect than just continuing to rent cheaply and save a bigger deposit.
 

Even on the OP’s low guesstimate of 1000/mth rent on this 270k house that’s 24k extra they’ve spent. In order to recoup that from this HPI the property needs to increase by 80k.
Nearly 30% hpi over five years in current climate? Hmm.

plus of course you are locked in, so you’ve got no choice other than to sit out that five year AST and buy the property if you want to get back that extra rent you’ve paid.

Oh, plus you’ve got to pay rent insurance on top to protect the company.

And I bet there’s a nice fat up front fee to be paid for them to assess the property you expect them to buy for you. What happens when they tell you it’s not suitable, or it gets sold to someone else?

And i bet they won’t be paying for anything other than on the cheap emergency repairs while you’re paying them an extortionate rental rate.

seems like a great way for a property Investment company to make money by mitigating their risks and a crap way for someone to spend even more money on rent while committing to buying a house that they may not want in five years time. 

That’s not quite right, as you are ignoring that the OP will be living in a much nicer home for the five years. It sounds like where they are now is a bit too 'edgy' for them and unsatisfactory to start a family. So, really a fairer comparison would be renting somewhere better, which would obviously cost more than they are currently paying.


I agree that the maths is straightforward. In order to end up with a 10% deposit from this scheme, the property value has to go up around 30%. I’m not convinced that will happen, but this forum is filled with people convinced that prices can only keep spiralling upwards. 

The 5 year AST is a two edged sword. Lots of renters complain that they don’t have security, but on the other hand rentals are Usually incredibly flexible compared to ownership.

Yes I am ignoring the fact they get a nicer home for five years because they can do that now without using this scheme.

and since the aim for the OP is to be able to buy a property, the question is does this scheme represent a better way to do that than their current scenario. I kind of pointed that out in my first sentence.

I think we are largely in agreement. Whether this works for the OP depends on detailed calculations of the alternatives. Those alternatives could include staying where they are, or moving somewhere more expensive.  

In any case, they’ll need to study the terms on offer very, very thoroughly. Given that they’ll be taking on a pretty long term lease they probably need legal advice, and they may want their own survey. 

I only commented at all because of the people who said that this must be a scam. I don’t think it is, but it still needs detailed evaluation to see whether it is worthwhile for the OP. 

Stardustjunkie

Thank you all, I really appreciate your comments. I’m recovering from an op at the moment so once I’m feeling a bit more with it, I will read through everyone’s comments in more depth, especially those including figures, and work out what would be more advantageous long term. Whatever happens, we need to move before we start a family, staying here just isn’t possible in late pregnancy and with a child.

I saw a comment about a cheaper wedding. We are having a small wedding and we’ve been very fortunate that our parents have generously contributed so we are only paying for half of it. It’s not a big fancy wedding but it does add up! Our goal is to not accumulate any debt for it.