Housing and Help to Buy

[YorkshireMartin]

Hello all,

Political discussion is against the rules so I do not wish to start a debate on the rights and wrongs of the Help to Buy scheme as a policy, so if you do want to discuss, please lets not get into party political stuff. It's more about the in's and out's of the scheme itself. I am interested to see if anyone thinks that the scheme offers a good deal.

A bit of background. I went to Selby today to visit a friend who lives on an enormous new estate developed by one of the nations largest builders. Off to one side of the estate was a smaller section of larger homes, with a different builders name on the board. My friend later told me that they were actually the same developer, but that they used one brand for "luxury" new homes and the other for their regular homes. Hmm, ok then.

As we walked we passed a sign which grandly advertised special offers on new homes. How interesting I thought, perhaps it's a black friday close out sale :lol:

As it turned out, the special offers in question were not special offers at all (surprise surprise), and were actually just the government backed help to buy scheme.

So, does anyone think these schemes are a good deal? If so, in what circumstances.

Cheers.

 

[RogerS]

You're asking two questions, I think.

1) Is there any difference between houses on one side of the road and those on the other side of the road, as it were. Leaving aside obvious things like size and number of rooms, the answer is 'very little'. Building Regs will apply equally to both. The main difference will be in the fittings, bathroom stuff, kitchens etc

2) Does it make economic sense from a personal perspective. I have no idea. I've not looked into it.

 

[Fatboy]

Overall I'm in agreement. It has helped some people who otherwise wouldn't have been able to get on the market; the equity loan deal is probably the best one to look at. The NewBuy scheme for new homes is now closed to new applications. For young families trying to get a foothold its been good, although not as many people have taken it up as the Government thought.

As far as kickstarting the housing market its failed; as soon as the deals end the market will go back to where it was unless buyers can somehow magic up a bigger deposit from somewhere. More of a shunt along the road a few yards than a kickstart.

I should add that in my opinion some of the properties offered seem to be overpriced compared with similar properties not in the deal, around this area anyway

 

[BearTricks]

I'm in my 20s and renting so I'm probably somewhere in the target market. From what I've looked in to it seems to be more rhetoric than substance which, having worked in government, doesn't surprise me.

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[mind_the_goat]

Interesting that the developers are pushing the HTB scheme. It would, I guess, be quite easy for the developers to bump up the price a few % knowing that the HTB will make it sound a much better deal.
I'm sure that happened with the boiler scrapage scheme and solar panel subsidies. So the scheme could well be a good deal for the developers.

 

[Sporky McGuffin]

1) Is there any difference between houses on one side of the road and those on the other side of the road, as it were. Leaving aside obvious things like size and number of rooms, the answer is 'very little'.

But aren't the size and number of rooms pretty fundamental to the price of a property? Much easier to put in a new kitchen, for example, than an extension - or to make each room a bit bigger.

I'm concerned that the help-to-buy scheme will just end up further fueling house prices, which are already pretty ludicrous, especially in the South. It'd be better to give businesses tax or rate breaks for having their offices much further from London.

 

[RogerS]

1) Is there any difference between houses on one side of the road and those on the other side of the road, as it were. Leaving aside obvious things like size and number of rooms, the answer is 'very little'.

But aren't the size and number of rooms pretty fundamental to the price of a property? Much easier to put in a new kitchen, for example, than an extension - or to make each room a bit bigger.

....

That's what I was referring to when I said 'leaving aside obvious things.....'. Of course, the size and number of rooms will make a difference to the price but very often a starter home will have the same number and size of rooms as a 'non-starter' or whatever you want to call it but the kitchen will be rock-bottom in terms of price/quality etc. As will the other fixtures and fittings as that is the only area where they can bring the cost down.

 

[themackay]

I came to the conclusion the developer was the one who gained the most from an article I read not long after these deals first came out

 

[artie]

I had to google "Help to Buy scheme" to find out what it was.

Back in the 80s we had the "co-ownership scheme" whereby you could buy a percentage of a house and the co-ownership body, I can't remember its exact name, would buy the rest and rent it to you at a reduced rent. I was married with two pre school children and needing, but couldn't afford a house, so I went for it. There were many bits of red tape attached, one being the maximum price being £25000.

I know it's barely believable that a 1050 sq ft house with four bedrooms could be bought for that sum, but this was 1984.

All in all it worked out for me, OK. We bought out the co-ownership body after a few years and sold it in 1994 for £40,000 and moved to a larger house with garden and outbuildings in the country.

Only thing I noticed, our house which I suspect was built specially to "fit" the co-ownership scheme, appreciated about £15000 in ten years. Other houses less than 2 miles away which sold for £26,500 in 1984 and did not qualify for "The co-ownership" deal were selling for £65,000 in 1994.

 

[Craigus]

I'm an Architect and work 80% of the time with good sized developers on higher end housing schemes. I also happen to be in my 20's and rent.

Developers lump these "help to buy" houses in with all other forms of social or 'council' housing, they don't distinguish them. They are not interested in them, all of their efforts go into making the regular open market houses the best. That means the open market houses get the best spots on the site (this can increase prices by up to 20-30% if you have the best plot as opposed to one with no view and near the social housing) they also get all the same fittings as any other social housing would, as cheap as possible. In terms of build quality, they will all be the same in terms of thermal insulation etc as the building regulations and other legislation give minimum requirements, that to be honest are never really improved on regardless of the house.

I understand what these schemes are trying to do, namely to get people like me on the housing ladder, but generally speaking if you are someone in your 20's - 30's and are in a position to start thinking about buying somewhere, you are generally going to be aware enough of how money works to know that the best way to do this is to save and do it off your own back.

The fact that not as many people are getting involved in these schemes as the government thought is evidence of this. All of my friends who have bought have done it themselves, sometimes with a helping hand from family to get the deposit together (which we sadly don't have the luxury of having financial help in this way), they have looked into the schemes but have been a lot more complicated than advertised in terms of percentages of ownership etc.

Buying a house is complicated enough, without having the government own part of your house!!

 

[Bodgers]

I bought on the Homebuy scheme just over 5 years ago.

Although the scheme isn't bad per-se, generally they do exist to support house prices and house builder's profit margins. We could probably have negotiated the price down further on our house if we were buying through the normal route.

We recently bought the majority of the 25% we didn't own, and it came out in our favour as the valuation on our home came down from 180k to 160k, so the remaining portion we were buying was cheaper. Doesn't bode well if we want to sell though. We don't plan to move, so not a problem at the moment.



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[Bodgers]

I'm an Architect and work 80% of the time with good sized developers on higher end housing schemes. I also happen to be in my 20's and rent.

Developers lump these "help to buy" houses in with all other forms of social or 'council' housing, they don't distinguish them. They are not interested in them, all of their efforts go into making the regular open market houses the best. That means the open market houses get the best spots on the site (this can increase prices by up to 20-30% if you have the best plot as opposed to one with no view and near the social housing) they also get all the same fittings as any other social housing would, as cheap as possible. In terms of build quality, they will all be the same in terms of thermal insulation etc as the building regulations and other legislation give minimum requirements, that to be honest are never really improved on regardless of the house.

I understand what these schemes are trying to do, namely to get people like me on the housing ladder, but generally speaking if you are someone in your 20's - 30's and are in a position to start thinking about buying somewhere, you are generally going to be aware enough of how money works to know that the best way to do this is to save and do it off your own back.

The fact that not as many people are getting involved in these schemes as the government thought is evidence of this. All of my friends who have bought have done it themselves, sometimes with a helping hand from family to get the deposit together (which we sadly don't have the luxury of having financial help in this way), they have looked into the schemes but have been a lot more complicated than advertised in terms of percentages of ownership etc.

Buying a house is complicated enough, without having the government own part of your house!!

This isn't always the case. The social housing on our site is actually closer to the open market stuff.

On Homebuy/help to buy schemes you should be getting the pick of any house that hasn't been bought up for social housing. I could have bought my house either as a normal sale or through Homebuy. I had the choice.

The reality is, if you are on a new build site, you have to put up with the full blend of social/owner occupier/rented/etc. This is government policy, apparently to avoid large ghetto building...whilst it may achieve that, it does tend to lead to friction.

Usually these schemes involve a split between the builder and the agency on the part you don't own - the purchase wasn't too complex if you are using representation that knows the system.


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[RogerS]

.... This is government policy, apparently to avoid large ghetto building...whilst it may achieve that, it does tend to lead to friction.

....

I couldn't agree with you more. Bloody daft idea as anyone with a grain of sense could have told them.

 

[Phil Pascoe]

The schemes work against full price buyers. If someone has say ten houses built that he can sell for £200,000 and he is told he has to sell five as "affordable" at £150,000, all he's going to do is price the other five at £250,000. This seems to be happening to all medium to large developments, so they have no competition - they all do it.

 

[Bodgers]

The schemes work against full price buyers. If someone has say ten houses built that he can sell for £200,000 and he is told he has to sell five as "affordable" at £150,000, all he's going to do is price the other five at £250,000. This seems to be happening to all medium to large developments, so they have no competition - they all do it.

Not sure I agree with that.

New builds still have to compete with the local market. Not many places a 200k house can be sold for 250k, even with the attraction (to some people) of it being 'new'.



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[Craigus]

This isn't always the case. The social housing on our site is actually closer to the open market stuff.

Well it has to be near to some open market stuff obviously, but these will generally be the smaller and less expensive properties that are in close proximity.

On Homebuy/help to buy schemes you should be getting the pick of any house that hasn't been bought up for social housing. I could have bought my house either as a normal sale or through Homebuy. I had the choice.

The reality is, if you are on a new build site, you have to put up with the full blend of social/owner occupier/rented/etc. This is government policy, apparently to avoid large ghetto building...whilst it may achieve that, it does tend to lead to friction.

I'm pretty sure that you can't just choose whichever house you want and then decide to go with help to buy. There are allocated plots that are chosen at an early stage before a spade is put in the ground by the developer, and these will be grouped together near to all the other social housing.

Although the Local Authorities all say they like the social housing to be integrated and 'pepper potted' throughout the site, the reality is quite the opposite. Developers know that having a 5 bed house next to social housing will drive the price whey down, so they group them all together in the least desirable location and put all the expensive stuff as far away as possible, Generally.

 

[YorkshireMartin]

I'm pretty sure that you can't just choose whichever house you want and then decide to go with help to buy. There are allocated plots that are chosen at an early stage before a spade is put in the ground by the developer, and these will be grouped together near to all the other social housing.

Although the Local Authorities all say they like the social housing to be integrated and 'pepper potted' throughout the site, the reality is quite the opposite. Developers know that having a 5 bed house next to social housing will drive the price whey down, so they group them all together in the least desirable location and put all the expensive stuff as far away as possible, Generally.

That does seem to be the case. It did say on the sign that Help to Buy was only available on "selected" plots.

Consensus seems to be that this scheme is a bit of a lame duck, as evidenced by the lack of uptake. I think what we really need is mortgage interest rate controls like half the countries in Europe. A 30 year 3% fixed rate mortgage with 10% deposit on primary residences would really help matters and I think we're one of the few countries where it's impossible to get a lifetime fix at a decent rate, if at all.

I have to say, if you're a youngster and stuck in this mess, you do have my sympathies.

 

[Bodgers]

This isn't always the case. The social housing on our site is actually closer to the open market stuff.

Well it has to be near to some open market stuff obviously, but these will generally be the smaller and less expensive properties that are in close proximity.

On Homebuy/help to buy schemes you should be getting the pick of any house that hasn't been bought up for social housing. I could have bought my house either as a normal sale or through Homebuy. I had the choice.

The reality is, if you are on a new build site, you have to put up with the full blend of social/owner occupier/rented/etc. This is government policy, apparently to avoid large ghetto building...whilst it may achieve that, it does tend to lead to friction.

I'm pretty sure that you can't just choose whichever house you want and then decide to go with help to buy. There are allocated plots that are chosen at an early stage before a spade is put in the ground by the developer, and these will be grouped together near to all the other social housing.

Although the Local Authorities all say they like the social housing to be integrated and 'pepper potted' throughout the site, the reality is quite the opposite. Developers know that having a 5 bed house next to social housing will drive the price whey down, so they group them all together in the least desirable location and put all the expensive stuff as far away as possible, Generally.

We have some of the most expensive house types in the development directly opposite the social housing. So I disagree.

You CAN choose how houses that are available for sale. This is a fact not peculiar to our development. I guy that I work with is currently evaluating the current Homebuy/help to buy purchase method vs traditional purchase on a 4 bed detached in a town 30 miles away from where I live by a different developer.

We were shown a map of the site by the developer when we bought ours. The only allocated housing was the housing association rental houses and a handful of housing association ones that were for sale at 50% market value and could only be bought and sold through them at 50% valuation.

I think you are confusing the local housing association offerings with the assisted purchase (Homebuy/help to buy etc) schemes. These schemes are a way to finance a new build house, it isn't restricted to specific houses - in fact it is in a developer's interest to flog a house via any way it can.

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[Phil Pascoe]

The schemes work against full price buyers. If someone has say ten houses built that he can sell for £200,000 and he is told he has to sell five as "affordable" at £150,000, all he's going to do is price the other five at £250,000. This seems to be happening to all medium to large developments, so they have no competition - they all do it.

Not sure I agree with that.

New builds still have to compete with the local market. Not many places a 200k house can be sold for 250k, even with the attraction (to some people) of it being 'new'.



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Around here nearly all house building is on multiple sites nearly always involving some houses having conditions put on them, so to a large extent one overpriced house only has to compete with another over priced house. What the developer/landowner hopes to make on the whole, they will try to get one way or another.

 

[xraymtb]

We looked at it in our new estate last year, it is/was available on any plot subject to the maximum prices of the scheme.

One sticking point is the valuation of the property - if the surveyor undervalues in comparison to the builder then you are out of luck as the help scheme only covers a percentage and you can't 'top up' so unless the builder accepts a lower sale price, you can't use the scheme.