Help to buy London!

[uokhun25]

Hello!

Anyone done the help to buy in London??

Basically we have 30k saved - want to stay in our area - property prices are crazy (London)

we are living in a lovely rented apartment for £1300 a month - saving about £1k a month between us in the Lifetime ISA!

We want to buy fairly soon - like next year as we are keen to start a family asap! Getting kind of stressed looking at what we can afford - with 30k we basically can only get something worth about 300k - not a lot on offer for that price and anything that is available is a tiny 1 bed - not ideal with a baby!!

Shared ownership and help to buy are options that could work for us - am leaning towards the help to buy equity loan from the gov rather than shared ownership (monthly repayments higher on the shared ownership and bugs me that you are still paying a fairly high rent on the percentage you do not own!)

help to buy is a hefty enough loan to be getting off the gov - but it would mean we can get a 2bed in a nice new build -monthly repayments are about 900£ which is £400 less than we pay now - so we could overpay the mortgage / save up towards paying back the equity loan!

London is not forever for us we will likely be moving back to Ireland by the time 1st child starts school -so we could just sell up before the interest starts being charged on the loan - the other option is to re-mortgage at that point and borrow more / release equity to pay back the gov as well!

Buying right out is just not really looking viable for a long time and its holding us back from starting a family!

Anyone any success stories of the help to buy?? it's got a lot of a bad press - but I can see the positives!!

right now we are paying 1300 to someone elses mortgage - thats £15,600 a year - so over 5 years we would have paid in 78k towards owning our own property !!

Would just love some peoples opinions / real life experiences!

THANKS x

Can you rent it out with either option? I think that's important as it gives you flexibility with either option.

@AJPTaylor technically not with the SO - but we could have a lodger to live with us in the spare room for a bit once we continue to live in the property - which we would!

Help to buy - as far as I know form what I have researched you can rent it out - as we would actually own the full property - with the SO housing association own some of the property so you are not supposed to be renting it out!

Yes, you could sell after 5 years but lots of tales on MN about people struggling to sell houses for years. I guess if that's your only option, the risk might be worth it.

Just research what selling entails for both Help to Buy and SO. There are lots of restrictions around that too. I think (if I remember correctly) that with one of them, the association has the first option to market it at a price of their choosing and you have to sell at whatever price they set if they find a buyer. Also, for one of them, the money you get back is not a percentage of the house value, it's exactly what you put in. So if you put in 30k and that's originally 10% of the value, when you sell you just get 30k back even if the value of the property has risen and 10% is now worth 50k, IYSWIM.

Both schemes can be good if that's really the only option available to you but there's no beating a traditional mortgage.

I think its worth the risk - its either leave London right now and live somewhere new that neither of us want to live in!

Throw money away on rent for another few years and try raise a baby in a 1bed and be unable to save

OR get a scheme and hopefully get more money than we put in back, what we put in back or even if we just get enough back for a deposit for another place when we move home then thats actually fine tbh - this is not a forever home - we will get that later when we know where we want to live!

Thanks for all the info all

Second hand SO! And staircase up as much as you can.

Do you know the names of existing housing associations (RSL) in your area who might have existing SO blocks. The council housing department could probably tell you. They will know what is available.

Flat prices in London are sinking fast. I would not buy new build now. Indeed it might be worth wandering into a few estate agents and ask if they have properties open to low offers from well qualified buyers. There will be people who really need to move and might be willing to give you a bargain.

My step son just bought HTB
You can’t rent it out although a lodger isn’t a problem
The way I see it NB are 20 percent overpriced
The moment you buy if you tried to sell straight away it it’s unlikely you would get the same price you would probably have to sell if at 20 percent less
If the price goes up so does the equity Loan
If it’ goes down same thing happens but your in the position of probably negative equity so can’t sell anyway
My SS bought a house at 360k
Exactly the same style house being sold now is on the market for 345 because it’s no longer a new build

We did HTB ( not in London but SE), worked really well for us.

Bought at 250k with 12.5k deposit. Sold for £305k 5 years later and walked away with 80+k. Our mortgage payments were £300-£400 a month less than a comparable property in the same area. I can't see much that would have worked out better to be honest.

We were obviously lucky that house prices went up. We also overpaid our mortgage where we could to create some leeway and bought a 3 bed so that if the it came to it we could stay there reasonably long term without being overcrowded.

As with all of these things they will work our well for some and less well for others and there is always an element of risk. Key I think is to research the market and check the recent sold house prices for comparative secondhand properties to make sure you're not paying too much over the odds in the first place and try to have a plan in place.

Good luck!

right now we are paying 1300 to someone elses mortgage - thats £15,600 a year - so over 5 years we would have paid in 78k towards owning our own property !!

technically not with the SO - but we could have a lodger to live with us in the spare room for a bit once we continue to live in the property - which we would!

Do you see the irony here ?

I dont rent and I don't rent out , but I bloody hate the 'paying someone elses mortgage' line .
You are paying for a commodity or service . The owner is taking a huge risk buying and maintaining the house and hoping they won't have tenants from Hell who trash the house. won't leave or leave without paying.
And while you live there , the owner isn't using the house .

But yes , get a Lodger and ........they can help pay your mortgage .

@70isaLimitNotaTarget lolz calm down - I don't really know why you bothered to comment with nothing helpful to add - just to slag me off! I've rented for years, loved renting tbh and have looked after this flat like it's my own - I never had a deposit before or even close - so I had no choice and feel I was lucky to be able to live in a nice place that I couldn't afford to buy in - couldn't have done that without renting.

Now I'm in a position to buy with a scheme and yes I will get a lodger to help me pay my mortgage if needed but hopefully I wouldn't need to!

I am just saying that it feels silly to keep renting when I could now buy and be putting my 1300 a month towards owning a place instead of another persons mortgage...

Lolz there really was no need for the attack!