Homebuy Scheme

[CheGuevara]

Anyone here done it?

My wife and I have got buying or first home on our minds, so that we can get busy with starting a family. We can afford the mortgage on good size place in our area, but it's saving the deposit in a short span of time that's the killer. And then I stumbled across the homebuy scheme...

There's a house a block away from where we live now that's 5br and has a double garage (I'm in love!). The problem is that from what I've read, they allow you one extra bedroom over your current needs. Well that'd make for a tiny 2br place and not worth our time. As-is we rent a 3br and find it a bit cramped. We hope to knock out a couple of kidlets in short order and have a pretty large family overseas (a total of 5 parents, 7 siblings, plus inlaws and neices/nephews that we need space for so they can visit (especially once kidlets arrive). We're also desperate for some home office space.

Anyhow I'm just wondering if anyone has any experience with the scheme and knows if they're reasonably flexible in considering those sorts of needs, or if it's strictly by the book?

[Mr Speirs]

I think it's strictly by the book. The scheme does look really good and something I will consider down the line. Worth phoning up though?

[CheGuevara]

I've rung the devlopers to arrange to see the place, and they're going to get a rep to ring us up. Was hoping to get a rough expectation before speaking to them though. I suppose it depends on how they define our current needs. From my perspective I need more space than we already have, and that's before adding mini-me's.

Here's the place we have an eye on:

http://www.redrow.co.uk/assets/uploaded/documents/450_webburnatoakleyvale_floorplan.pdf

[martianskippy]

spooky.. I've just closed a Homebuy info page, opened the forum and stumbled upon your post... ;)
Let us know how you get on with the scheme as it is definitely something me and my lovely other half would consider

[hindle8907]

Interesting thanks i think me and my partner will be interested in this too.

[CheGuevara]

A rep from Homebuy Direct is supposed to ring us this eve, so if I get any useful info I'll post it up. I'm not optomistic about our chances of qualifying for a place suitably large, but I'll definitely put my best case to them :)

[dyzio]

Is that scheme for England only? Or have I looked at a wrong website?

[CheGuevara]

Is that scheme for England only? Or have I looked at a wrong website?

Not sure, but I'm looking here:

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/index.htm

And specifically at this scheme:

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_171504

[CheGuevara]

Right some positive news. Just got off the phone with the guy, who it turns out is a mortgage broker or something (I'll have his exact role when he emails me some forms) with experience in this scheme and of course with these developers.

He did a quick estimate and figures we should easily qualify for more than the amount we need. A quick check shows a rate of 4.89% fixed for 2 years (better than I had assumed). He say's there's only about 3 lenders participating in the scheme (RBS, Halifax I think, and one other I've forgotten).

On the subject of space/requirements: I told him our situation - married, wanting to start a family right away (min 2 kids), need a home office, plus a spare room for the plethora of visiting family (they'd have no excuse now!). He said there is some wiggle room for those sorts of situations -it's not strictly a case of "married couple currently with zero kids qualify's only for a 2br or 3br..."

This could happen quite quickly really! And we thought it'd be end of the year before we had saved enough for a decent deposit on a much cheaper/smaller home. Roll-on double garage! :D :D

[Ed]

Roll-on double garage! :D :D

...for the double pram:D

[CheGuevara]

...for the double pram:D

Hahaha -will probably be true -twins run in my wife's family...

[Stuuk1]

Is the home-buy a half buy/ have rent scheme? If so.... Its what ive done

[CheGuevara]

Is the home-buy a half buy/ have rent scheme? If so.... Its what ive done

I think there are variations, but the one here is just a free (for 5 years) and then cheap (starts at 1.75% in year 6) loan for up to 30% of the price of the house. The loan is made by both the govt and the developer who share an equity stake in the home, although you hold the title to the home.

[metalmonkey]

Anyone else done this?

I really don't want to buy a new build, my rental place is a new build about 10 years old the quality can only be described as sub standard this place has pretty much no isnulation I can hear the neighbours fart and hear the fridge in lounge:rolleyes:

Has anyone sold a house on the equity loan scheme, does that make the sale process more complex espically if you are in a chain?

Can you buy a place on the open market?

I wouldn't live in London as most of the key buyers stuff seems to flat in blocks, so on top of everything you pay a service charge which I'm not keen on. I have frineds who have to pay a service charge its a lot more money not too metion when they decide work needs doing and they $1000 (my pound sign doesn't work) from each person to pay for it.

The part buy/rent scheme I wouldn't use, I have heard not much good about that at all.

[Stu]

I think there are variations, but the one here is just a free (for 5 years) and then cheap (starts at 1.75% in year 6) loan for up to 30% of the price of the house.
I'm glad I struggled to buy my own house ](*,)

[hindle8907]

ok guys well me and my partner have been renting a £650 apartment for the last 2 years,
So when i saw the post i had a look into the scheme and gave them a ring we have been and looked at few properties and we are interested in one, we are first time buyers and are awaiting a call back from a financial advisor to discus the mortagage options and repayments,
seeming as we are only in our early 20's well im 21 my OH is 22 do you think getting a mortgage over 30-35 years is a bad idea ? because i don't think we can afford to get it over 25 years on our current income

Cheers Ant.

[CheGuevara]

Can you buy a place on the open market?


I believe they had allocated part of the funds for open-market purchases, but it seems it's been over-subscribed. AFAIK know it's just new builds.

[Quedos]

ok guys well me and my partner have been renting a £650 apartment for the last 2 years,
So when i saw the post i had a look into the scheme and gave them a ring we have been and looked at few properties and we are interested in one, we are first time buyers and are awaiting a call back from a financial advisor to discus the mortagage options and repayments,
seeming as we are only in our early 20's well im 21 my OH is 22 do you think getting a mortgage over 30-35 years is a bad idea ? because i don't think we can afford to get it over 25 years on our current income

Cheers Ant.

basically yes its a bad idea - if you can afford £650 a month rent then you'll be able to afford a decent mortgage over a 25 yr term. and you always have the options to pay in more if you can. You can be mortagage free by 46! then pump it all into a good pension.
To rent my place is about £450-550pcm mortgage is £272 + 83 council tax but best to talk to your advisor i would go for as short a time as possible

[CheGuevara]

do you think getting a mortgage over 30-35 years is a bad idea ? because i don't think we can afford to get it over 25 years on our current income.

I suppose if you did that for a few years while waiting for your incomes to rise it wouldn't be too bad, and then shorten the term when you can. Otherwise I'd probably look at a cheaper place. The general guideline I've read is absolutely no more than 30% of your gross household income.

Make sure you give yourself enough leeway for a rise in interest rates as well.

Usually the payments don't climb all that much if you drop the term by 5 years or so, but the differenct in the amount of interest you pay over the long term can be staggering. I know a couple back home who bought some really large homes a few years back on the "Never, Never Plan" - 40 year mortgages with little or no deposit. I'm sure they will have paid for the houses a few times over when (if) they pay them off. :rolleyes:

[454697819]

Borrow over a short period as possible.

Our mortgage is fookin huge and I occasionally regret it.

[hindle8907]

can you change the period afterwards ?

[CheGuevara]

can you change the period afterwards ?

Can't say I know in detail how it works here, but generally you take out a mortgage with terms set for a fixed period of time (1,2,5 years etc even though the mortgage may paid over 25 years). When that expires you can negotiate new terms or find another lender.

Find yourself a mortgage broker (independant of the banks) who can give you the gory details and make some recommendations on what you can afford to borrow.

[hindle8907]

cheers for the advice guys me and heather my partner have just left a 500 pounds reservation fee on a house on the home buy scheme,
A big thanks to the OP for brining this scheme to my attention we was just about to sign another 12 months Rent contract.
the house is a 3 story town house and is a amazing its not built yet but we have been in one thats the same layout. but this means we get to pick everything :) just waiting for the application to complete on the home buy scheme but we have been told its very unlikely we will get denied so whoooowhooooo :D

[CheGuevara]

cheers for the advice guys me and heather my partner have just left a 500 pounds reservation fee on a house on the home buy scheme,
A big thanks to the OP for brining this scheme to my attention we was just about to sign another 12 months Rent contract.
the house is a 3 story town house and is a amazing its not built yet but we have been in one thats the same layout. but this means we get to pick everything :) just waiting for the application to complete on the home buy scheme but we have been told its very unlikely we will get denied so whoooowhooooo :D

I got our application in on Friday (or rather sent it to our mortgage broker who is dealing with it for us). He says it's usually in the 8-10 day range before we get an answer back. I feel confident that we'll get approved, it's just a question of the size of the place they'll let us have.

Let us know when you find out, and I'll do the same. Did you haggle the price down on the house at all?

Point of interest -our developer (Redrow) stated that they couldn't accept a deposit until after we had approval from Homebuy...

[hindle8907]

I got our application in on Friday (or rather sent it to our mortgage broker who is dealing with it for us). He says it's usually in the 8-10 day range before we get an answer back. I feel confident that we'll get approved, it's just a question of the size of the place they'll let us have.

Let us know when you find out, and I'll do the same. Did you haggle the price down on the house at all?

Point of interest -our developer (Redrow) stated that they couldn't accept a deposit until after we had approval from Homebuy...


Yeah we only got 2500 off but we got carpets throughout and Lineo in the onsweet,family bathroom, downstairs bog and kitchen.
so its about 5 grand really.

i cant belive we have to pay 150 quid for a TV Ariel though and there is no lawn ither you have to pay for that :smt094

but i dont think they will drop the price much because of the scheme did you manage to get much off ?

[CheGuevara]

We haven't gotten to the negotiating stage yet, but the house is complete with flooring etc and ready to move in at it's listed price. I'll try and haggle hard though -worst they'll do is say no and I'l need to up the offer.

I woulnd't worry too much about the lawn. If the stuff they use around here is anything to go by, I'd rather select my own and do it right. I used to harvest and install turf when I was in my teens and it's really not difficult. Like anything the big effort is in the prep -making sure the srface is smooth and level. Rent yourself a landscaping rake (wide) and do the best job you can manage. Don't stretch out the turf (it'll shrink anyhow and this wil just make the resulting gaps worse), make sure to butt the joints up nice and snug, and then be sure it doesn't get a chance to dry out while it's developing roots (for a good few weeks).

£150 for an aerial though... might be cheaper to just get a Sky dish, or a freeview dish?

[CheGuevara]

BTW - I messaged Ed on the form here a question here about using a solicitor when buying a home. This is the sort of thing he doesu and there are many checks thatr would never have crossed my mind. Might be worth dropping him a line if you haven't found one yet.

[Drew Carey]

Quick Q, did you guys still need to find 5% deposit?

[hindle8907]

Quick Q, did you guys still need to find 5% deposit?

yeah mate i did.

[Drew Carey]

Cool.....that was what we needed to save. Until we then realised that the properties that are available round our way are mostly 2 bed apartments or small houses. We need somewhere bigger. So will take longer to save etc and find right place. At which point the scheme will probably have ended. So a bit more renting for us yet. lol

[CheGuevara]

Quick Q, did you guys still need to find 5% deposit?

Yep we've been told that's the prerequisite, although 5% of the mortgage amount, not the total price of the house (ie not including the bit that Homebuy is contributing).

[Drew Carey]

Yep we've been told that's the prerequisite, although 5% of the mortgage amount, not the total price of the house (ie not including the bit that Homebuy is contributing).

Apparently it is now.....but when they first started the scheme you could do it with zero deposit. Hence there was a real appeal to doing it. That was what the government wanted, so that people who couldn't save, but could afford it, could get on the ladder.

The mortgage companies decided after a while to request the deposit. Hence why the take up of Homebuy has decreased substantially. Still a cracking deal though. Hopefully when we have the saved up amount, they are still doing it, otherwise we continue saving till we get enough to buy without homebuy.

Or, can do one of the builders shared equity schemes....as they all tend to do their own version, just that the amount you borrow tends to cost a little more and if you sell, you not only pay them back, but also pay them the equity share of any profit. So not as good as the govt scheme.

[Sosha]

Maybe being thick but Home Buy sort of sounds like a good scheme for maintaining artificially high property prices.

A Sort of Oops we've priced our population out of the property market so no one's buying anything. Let's not let market forces sort this out though - think of the stamp duty loss - let's prop up the current property prices. (?)

Not saying it's a bad scheme just that it shouldn't need to exist.


Homes are for living in Dammit.

And Breathe

[CheGuevara]

if you sell, you not only pay them back, but also pay them the equity share of any profit. So not as good as the govt scheme.

As I understand it (reading the Homebuy Direct website) this is true of the Homebuy Direct scheme as well. I'm sure of course this is the developers incentive to kick in their share of the money (split with the gov't up to the 30% total). On the flipside, if prices fall and you sell, they take a hit on their equity share -so your upside is limited based on what you're contributing, but the risk is shared as well.

[Viney]

Is this one of the part buy part rent schemes?

3 people at work have all got out of thiers as its a bleedin nightmare and not as good as it looks on paper. All i know that the terms that you are bound under are quite restictive, and when/if you come to sell, there is all manner of legal stuff that you have to get round. To quote caroline " The only thing thats good about it, is thier marketing department"

[Stuuk1]

Anyone else done this?

I really don't want to buy a new build, my rental place is a new build about 10 years old the quality can only be described as sub standard this place has pretty much no isnulation I can hear the neighbours fart and hear the fridge in lounge:rolleyes:

Has anyone sold a house on the equity loan scheme, does that make the sale process more complex espically if you are in a chain?

Can you buy a place on the open market?

I wouldn't live in London as most of the key buyers stuff seems to flat in blocks, so on top of everything you pay a service charge which I'm not keen on. I have frineds who have to pay a service charge its a lot more
money not too metion when they decide work needs doing and they $1000 (my pound sign doesn't work) from each person to pay for it.

The part buy/rent scheme I wouldn't use, I have heard not much good about that at all.


New builds arent so bad, just find a little about the building first before you buy it! The new build flats I live in is part of a 'first time buyers' scheme. I saw the flats while they were being built, and noticed the walls were thick concrete.

I moved in 3 years ago now, and dont hear anything. My bedroom even butts up to the lift!

Although I did hear an amazing argument from a flat above me the other night... but it was good entertainment so im not complaining!

I have a mortgage for half the price of the flat. The company 'Moat Housing' have the other half. I will start paying rent on the 4th year I have lived here at 1% of what I borrowed from them, 5th year 2% and 6th year 3% (it is then capped at 3%).

It will work out quite expensive for me when it reaches them 3% but I hope to have sold it and moved on by then (which is what its about, the scheme simply gets you on the property ladder).

I'd say I made a good move in buying it. Not many people manage to buy a place at 20 years old.

[CheGuevara]

Is this one of the part buy part rent schemes?

Not really, itr's more a case of the govt and the developer pool together to lend you up to 30% of the purchase price. It's interest free for the first 5 years and nominal interest (but indexed to the RPI) after that. You have 25 years to pay them off and you can start after year one.

[metalmonkey]

cheers for the advice guys me and heather my partner have just left a 500 pounds reservation fee on a house on the home buy scheme,
A big thanks to the OP for brining this scheme to my attention we was just about to sign another 12 months Rent contract.
the house is a 3 story town house and is a amazing its not built yet but we have been in one thats the same layout. but this means we get to pick everything :) just waiting for the application to complete on the home buy scheme but we have been told its very unlikely we will get denied so whoooowhooooo :D

Would be interested to know what has happened with this now? Is all sorted out and you moving to the new place? Is it a part buy, part rent scheme? I spoke to a mortage adviser about that, she told me that they are not what they are meant to be. As in even as a key worker they are hard to get as they money is there, she has only seen less than five of these go through it...It seems there is never money there for them.

I rent 3 floored town house right now, it gets very cold down stairs though this winter has been brutal and still is! Who is building the houses, lets hope its not Barrets.

[hindle8907]

In the end we didn't get accepted for the 3 Bed town house we was looking at, we are only allowed a 2 bed as we have no kids (Stupid) and also we only got accepted for 84 Grand, we needed 103 to get the house we wanted, so we are going to have to save up and buy outright .

It was the part buy scheme we as looking at.

[G]

In the end we didn't get accepted for the 3 Bed town house we was looking at, we are only allowed a 2 bed as we have no kids (Stupid) and also we only got accepted for 84 Grand, we needed 103 to get the house we wanted, so we are going to have to save up and buy outright .

It was the part buy scheme we as looking at.

I personally think you are much better off doing this. These shared equity scheme are nothing but trouble, we have friends that have bought house this way and they are extremely tied in and completely regret doing it.

Buy what you can afford or dont bother. You'll be glad you did down the line when you start trying to move on and sell the home.

The annoying thing around my area is that when you go to a new development over 50% of the properties are on the homebuy scheme, we always get told they are not available to you unless you are a first time buyer even if you have the cash ready and available to buy it...yet hardly anyone can get accpeted on the schemes... it seems they dont want to sell houses.

[metalmonkey]

I take it the 108k was the part buy value of the house? What was the full cost of it?

Alot of the flats that get sold in London atm are on this same scheme, makes you wonder what happens when they are gonna try and sell them...I have heard about them limting the size of the place you can buy as well. My view on buying is the best and biggest you can afford. This moving house business isn't cheap, so why settle for something your gonna need to sell in a few years! Oh these flats have a mega montly charge as well, so I think they are bad valaue for money.

The house that I rent is a new build Barrets home, the quality is **** and that putting it lightly, they are cold, build of the same cheese used to make SV's how ever my bike is a lot better built than this house. Its falling apart. My folks house is new build older than this, but built to a much higher standard.

I don't want to buy in London, one I can't afford it:rolleyes: second it smells and is full of rude people so I think its time to get out. However best made plans and all don't always happen!