First time buyer looking for advice on buying in London (is "Help to Buy" recommended?)

Me and my GF don't have a place to live and are thinking of either renting or buying. 
I make 90k a year, and she's on roughly 27k. We've barely any savings.

Looking at the renting market is just depressing, the amount you pay, and what you get for that money is just ridiculous.

It seems like it'd be better to just get a mortgage and at least the money going out will be used to build up some equity.

I am thinking of applying to a Help To Buy scheme before it runs out in October. The homes offered seem to be decent. And the ability to borrow 40% without any interest for 5 years will ease the mortgage repayments and allow us to build up more equity in that time.

After the 5 years though it seems like it starts to become financially burdensome due to interest, and the loan tracking property value, so I am thinking perhaps a remortgage to pay off the equity loan may be in order.

We may also have trouble scrapping together the 5% down payment by October but I'm sure we'll manage something.

What do you guys think? Is Help to Buy a good way to go? Will paying off the equity loan be a pain? Am I right in thinking that I'll be able to pay it off, or at least reduce it with a remortgage? Would I be better off just getting a 95% mortgage? Any other advice?

Comments

  • rdraheim
    rdraheim Posts: 11
    Name Dropper First Post
    Forumite
    We looked at this extensively as we're (as a couple) located in the two markets that only London beats for price/m2.

    We find the rules governing HTB too onerous for our tastes. Never getting to 100% equity. Not being able to modify property easily, etc... Having a monthly fee hanging over your head that's not within your control, etc...

    You should have more than enough income to buy in London Outer Suburbs (@110k/year).

    As foreigners that have lived in several European capital cities find London prices kinda !!!!!! for the quality, so you're not alone. Also, having a dump in London seems like a right of passage for those that don't go abroad.
  • kingstreet
    kingstreet Posts: 38,690
    First Anniversary Name Dropper Photogenic First Post
    Forumite
    rdraheim said:
    We looked at this extensively as we're (as a couple) located in the two markets that only London beats for price/m2.

    We find the rules governing HTB too onerous for our tastes. Never getting to 100% equity. Not being able to modify property easily, etc... Having a monthly fee hanging over your head that's not within your control, etc...

    You should have more than enough income to buy in London Outer Suburbs (@110k/year).

    As foreigners that have lived in several European capital cities find London prices kinda !!!!!! for the quality, so you're not alone. Also, having a dump in London seems like a right of passage for those that don't go abroad.
    That's shared ownership. The OP is talking about the equity loan scheme.

    Our wonderful Government decided to call everything 'Help To Buy' which was really the opposite of helpful!
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • rdraheim
    rdraheim Posts: 11
    Name Dropper First Post
    Forumite
    You're right! I apologise. Please disregard me in general!
  • kingstreet
    kingstreet Posts: 38,690
    First Anniversary Name Dropper Photogenic First Post
    Forumite
    rdraheim said:
    You're right! I apologise. Please disregard me in general!
    TBH your error is understandable as ISA, Equity Loan and Shared Ownership were all tagged HTB by HMG.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards