Should I go for Help To Buy?

[Norris63203]

There is a new house I like that is £180,000

I have £75,000 for a deposit. And my salary is £20,000 a year. So they would probably let me have a house that cost £150,000.
I'm about £30,000 short. But help to buy would give me the extra 30,000 to make it possible.

BUT...

If the value of the house goes up then I have to pay the government back more money. I am told that it is a risk. But is it a risk worth taking?

I do feel in a hurry to move out of my parents because I'm 28 and time is going on. My Dad had a house at 19! I also can't wait to have my own garden.

Firstly. Do you need to buy a £180,000 house? From that price, I’m assuming you’re in a relatively cheap part of the UK; could you get on the property ladder with a cheaper house on the open market (maybe one which requires work, which you could carry out over time) or a flat which didn’t require you to use the HTB scheme? HTB has an absolutely valid place in the market if it’s the only means by which you’re likely to afford to buy anywhere in the medium to long term because you have little chance of ever saving enough of a deposit or earning a high enough salary to get the mortgage you need for an outright purchase. Whether it’s the best option for you depends why you’re considering it. If it’s mainly so you can get something you perceive as being better and newer than you could afford outright on the open market, then you do have to factor in that it’s also an expensive way.

If buying somewhere on the open market isn’t an option at all then it’s a decent consideration. Yes, you would eventually need to repay a percentage of any value gain, but it’s in line with what you borrowed. For example, if you borrow £30,000 through HTB for a £180,000 property, if the property gains £50,000 in value by the time you wish to sell / exit the HTB scheme, you’d owe 15% of the increase in value of the original loan, or £7,500. It’s not a “risk” - you always know what you’d have to repay, the percentage is fixed, and you would still be able to keep the larger proportion of the profit.

I thought help to buy was best for people with barely any deposit. You have a massive deposit (compared to anyone I know) you should be in a better position to shop around for a better deal for you. Or buy a cheaper house outright and rent it out for a profit for a while as more income