Some people don’t have many options and never will. For low earners and those in expensive areas who really cannot move, SO or Help to Buy might really be the only option. I agree that this group have limited or no choice and so making comparisons doesn’t help them ....but going into it with eyes wide open as to future costs is still good. AND, I think that for some in this category, SO or Help to Buy lures them into buying bigger and more expensive property than needed or advisable. Yes, the monthly payments on 3 bed might mean they meet the eligibility and can afford it monthly but they will be paying for fat longer and far more overall than if they bought the 2 bed (which essentially is what they can afford long term) with lower payments now and overall. Having the bigger property which SO makes look affordable for even low income might mean less pension contributions or savings for future. It’s about being lured into the bigger, newer, shinier thing than really your income allows....making it look affordable now, but financial implications come further down the line. So due diligence is needed to see the long term implications of different sizes and prices, not just the headline price you’ll pay next month.
For others, I think some find SO or a help to But is only option because due diligence about finances wasn’t done early in life ....so now there are less choices, but that didn’t need to be the case. Reasons why people in their 30s with 2 kids find they haven’t got a deposit to buy without SO when they earn good money, can include earlier choices such as living long term in expensive rentals instead of moving out and living cheaper and saving. Or it can be having children young so household income is low. Or it can be living the single life for many years with lots of travelling, running up debts etc. Essentially people with good incomes can choose to save and go without for a while, building their deposit, or living it up today and finding their choices later are much more restricted.
I know it all sounds dull and harsh. I know lots of people will never earn much and lots didn’t save early because they just weren’t thinking about boring adult things and that sometimes things happen that are unplanned.
Who gets the choices? It’s those from backgrounds which mean parents find a deposit or lead them into high paying jobs, and those who are financially savvy.
In my view SO and Help to Buy do enable home ownership for some who couldn’t have it otherwise. But lots also take it who could have avoided it with a bit of forethought and being more realistic about what they can actually afford. The schemes benefit developers and HAs and like all schemes where you don’t pay upfront, you pay more overall and attract those least able to pay more.
Clearly, it absolutely can be right for lots of people. But others might do well to look further than their pleasant surprise when they’re told they can have a 4 bed house at £x per month. They should consider the overall cost and if perhaps the overall cost of the 2 bed or 3 bed is more affordable long term and not think that somehow every family should have and own a 3 or 4 bed regardless of finances. I’m a bit more of a believer in havjj in by what you can afford. Most of us borrow via mortgage because paying it all upfront isn’t possible, but schemes which allow you to buy with barely any deposit but then commit you to long term cost don’t always seem in people’s best interests. Minimum deposits are not unreasonable.