Dream Start Scheme for first time buyers and key workers

bbc_2

Have started looking at a new build and have found the following new deal.

Own 100% of the home for 75% of the price.

Basically the buidling company retail 25% stake of the home for upto 10 years.

What do you think?

ManAtHome

I'd assume you'd have to purchase the b/s 25% after 10 years. Check out all the terms & conditions, I saw a news item which said that some of these 'key worker' schemes had restrictions on selling the property - could only sell to another 'key worker'.

This doesn't sound like a key worker thing though, just a way to defer some of the purchase price for a few years, presumably for a price...

helen21_2

Hi there

There was something about that on here recently, something to do with buying the 25% at a later date but at market value or buy it later at an agreed price now so if market falls you be stumped. Have tried to find the thread but maybe someone else will remember it.

helen21

meanmachine_2

Yeah, if the market falls 25% you still have to stump up the necessary, even though you could have bought 100% for 75% of the price if you'd waited a year or two (presuming prices go down).

I think you also have to buy this 25% stake at 2015 prices, which could be much higher than now.

It's a no-risk deal for the builder.


You're better off buying 100% with a discounted mortgage, or I/O.

bbc_2

IF I pay £75,000 for a £100,000 house I will owe £25,000

If the house value falls to £50,000 I will only owe £15,000

Its follows the market. You owe 25% of the current value whether it goes up or down.

Could be quite good for parents with children entering their early teens. Get on one of these schemes for a bigger house for 10 years until your children move out then sell up and down size

purple12

This is the Homebuy scheme. i am a keyworker and was looking into it as well. I was under the impression that it was a loan of up to 50,000 to cover 25% of the initial cost however there is no time limit on it and it is only repayable when you sell the house. So if you don't sell the house, you don't need to pay back. I know a few people who have done this and are extremely happy as basically it has made the difference of being able to afford somewhere to live in London and not. I, for example, could get a mortgage for about £140000 at the moment which wouldn't get me anything in London, however with the extra 35,000 I could find a place where I wanted to be.
The problem with the Homebuy scheme is that the housing associations have a pot of money to use towards this and when they run out, they can't allocate any more money towards it for the next financial year and Homebuy is VERY popular.
As for me, I have decided to go for one of the new-build shared ownership places for different reasons but I still think the Homebuy is a good scheme. There is lots of information around about in on the websites of different housing associations if you look around. I was sent quite a lot of information on all the different possibilities by the Metropolitan Housing Association (https://www.mho.co.uk) and Southern Housing Group too. They can answer all the particular questions you might have.

meanmachine_2

If you can get a £140K mortgage, why don't you just save up the 35K deposit?

Or is the extra cash on top of a deposit?

Either way, sounds like me - the taxpayer - has to cough up to keep an overinflated housing market overinflated.

Barmy.

purple12

Ouch.. well, you seem to be taking this a little personally! I don't see that I need to explain my situation to you but anyway, the 140000 would be including the deposit so the 35000 would be on top of that - the whole point of assisting keyworkers with housing is because they are on low incomes! If I could afford to buy outright I wouldn't qualify, which is the same as the Homebuy scheme. Your savings and earnings are taken into account and it is only those people who can't afford to buy on the market who are assisted.
And the point of the assistance is to ensure that people who provide a public service function at a generally low wage are able to stay in London. So if you use the hospitals, schools etc, you are benefiting from keyworker staff who need assistance to be able to afford housing in the south-east. But you don't really need me to explain this and I don't want to digress too much from the original viewpoint- however being asked directly about my own personal situation, I felt I needed to respond

meanmachine_2

You certainly don't need to explain yourself to me.

Punishing buy to letters and making other tax changes that actually bring prices down to an affordable level, and make property less attractive investment wise (SIPPS for instance) would be a lot better than having to give certain people a leg up.

Believe me, as a FTBer I feel your pain.

KayEdwards

Just wondering if anyone knows why...

I work for a charity - Marie Curie who nurse patients on behalf of the NHS (and paid for proportionally by the NHS) but am not eligible for a keyworker house unless I change employer to the NHS directly. Charity employees, however valid and useful the role we do is to the NHS, are not allowed assistance with housing.

Any thoughts as to a way round this?

GingeG

meanmachine wrote:

You certainly don't need to explain yourself to me.

Punishing buy to letters and making other tax changes that actually bring prices down to an affordable level, and make property less attractive investment wise (SIPPS for instance) would be a lot better than having to give certain people a leg up.

Believe me, as a FTBer I feel your pain.

MM

I have read your posts lots recently and all I see is pure blinded vitriol towards the market!

I was a FTB till recently now I owe a swift 200k (I put down 30k deposit)

However \I am only paying 200 or so pounds more than I was in rent!! But I will own the property in about 20 years (I am overpaying)

Rent is Dead money !!!!!! get a grip and buy somewhere you madman buty a flat in Scotland wher it is still rising and rent it out. But stop sitting there pontificating about how the market will fall when clearly it is not!

There is a shortage of homes in the uk and basic economics will explain the supply versus demand law to you.