Homebuy/Part Ownership Scheme

[Gerrard]

I’m considering joining the “real world” and getting my own place rather than staying on base, and having run some very basic numbers, I’m considering the Homebuy/part ownership scheme, especially as I come under the Key Worker thing as well.

A brief overview of my circumstances. I would be looking at a flat in Reading, probably in the region of £150,000 (seems to be the going rate for 1 bedroom flats there). I’d be able to put down £10,000 deposit, possibly stretching to £12,500 and still leave me enough capital (around £4000 say, an arbitary figure TBH) to sort out other stuff. My plan would be to go for the smallest amount of a share (say 25-30%), meaning I would need around £40,000. With the deposit, that would give me a LTV rate of 25%, and hopefully a better chance at a good mortgage. Playing around with a basic figures (eg like on
this property ), it seems like rate at which rent is charged on the un-owned equity isn’t too bad, and would allow me to be more flexible financially later on down the line rather than tied into a bigger mortgage. I realise that it’s more dead money, but the difference between that and the larger interest on a larger mortgage repayment isn’t too big.

So I was wondering what experience people had of schemes like this (I believe of few people here are on something similar) and what advice they would give me? Also, slightly getting ahead of myself here, but is it worth having full surveys on flats as they anything really major (eg structurally) wouldn’t necessarily affect me?

Cheers.

[Salazaar]

I did it earlier this year

You might have to correct me but I understood that the scheme which enables you to buy on the open market were wound up last year. What remains, Homebuy, is a scheme where you part buy from a selection of specially built new builds, or those that have been sold back in to the scheme.

Catalyst run the Homebuy scheme in our area, so you'll need to register with them first:

http://www.catalysthomebuy.co.uk/

They'll also be able to provide a lot of information.

And you'll also need to be on the local housing list for wherever you want to move.

I also found it very useful going to an independent financial advisor who specialised in Homebuy, who took his commission through the scheme and the mortgage he sold me. He made the whole process a great deal smoother.

PM/IM me later and I'll tell you everything I can about my experience with it.

(Whoops, didn't follow your link, I see you've already found catalyst )

[Guy]

I would be interested to have a dig around at this, co-incidentally being another local to you 2!

I really should have a good read about this, but tbh I havent really known where to start.

Oh also Gerrard, if you were ever in the market for a lodger, I might have an idea where you could find one.

[Salazaar]

Sorry, I put the wrong link in, it should be:

http://www.catalysthomebuy.co.uk/

I went to one of the shows first and spoke to their reps first. They went through my basic options, showed me what homes they had in the scheme and some that were about to be built and gave me a list of IFAs who specialised in the scheme.

I can't emphasise enough how useful a good advisor was, there are precious few lenders who'll lend on the scheme and things can get tricky compared to a normal mortgage.

[Gerrard]

Catalyst run the Homebuy scheme in our area, so you'll need to register with them first:

http://www.catalysthomebuy.co.uk/

They'll also be able to provide a lot of information.

And you'll also need to be on the local housing list for wherever you want to move.

I also found it very useful going to an independent financial advisor who specialised in Homebuy, who took his commission through the scheme and the mortgage he sold me. He made the whole process a great deal smoother.

Thanks for the advice; I've registered with them now. I don't understand the "local housing list" part. Do I have to my name on the list for a council house, even though I don't need one? A financial advisor does sound like a good idea though and will be something else to look into.

I would be interested to have a dig around at this, co-incidentally being another local to you 2!

I really should have a good read about this, but tbh I havent really known where to start.

Oh also Gerrard, if you were ever in the market for a lodger, I might have an idea where you could find one.

Well, it's certainly something to think about! However, if you/we were serious it might be better to both apply for a joint martgage or something for a bigger share in a bigger place? Probably get quite complicated quite quickly, but there would be less "dead money" going around. Incidentally, the place I linked to originally is the sort of area I was looking at; I don't have to commute through Reading and BT broadband checker reckons 15Mbs is available there! (Yes, that's my priorities!)

I went to one of the shows first and spoke to their reps first. They went through my basic options, showed me what homes they had in the scheme and some that were about to be built and gave me a list of IFAs who specialised in the scheme.

I can't emphasise enough how useful a good advisor was, there are precious few lenders who'll lend on the scheme and things can get tricky compared to a normal mortgage.

Unfortunately, having just checked their website, their doesn't seem to be any events at the moment. Must admit, I'm only looking at info at the moment anyway since I'll be gong on a 3 week holiday at the end of August so there's no immediate rush.

[Salazaar]

Do I have to my name on the list for a council house, even though I don't need one?

That's exactly what you have to do. It's because the scheme is government backed, you have to be approved and they'll only let you apply for the size of house they think you need i.e. a one bedroom place in you case (and mine). It also helps if you've got local links; grown up there, have family, local job and the like, but that's not so important on this scheme.

[Guy]

Well, it's certainly something to think about! However, if you/we were serious it might be better to both apply for a joint martgage or something for a bigger share in a bigger place? Probably get quite complicated quite quickly, but there would be less "dead money" going around. Incidentally, the place I linked to originally is the sort of area I was looking at; I don't have to commute through Reading and BT broadband checker reckons 15Mbs is available there! (Yes, that's my priorities!)

Oh I am quite serious, just an idea to bouce around.
Like you said always the potential for less dead money, and having things split rather than taking the hit all on your own. No idea how it would work with having more than 1 person/can you get or do a joint ownership scheme with someone other than a partner/wife etc (and no I'm not going to fill that role )

Well good broadband is a must, a proper shower, and ample parking. Those are pretty much my only requirements.

[Gerrard]

Oh I am quite serious, just an idea to bouce around.
Like you said always the potential for less dead money, and having things split rather than taking the hit all on your own. No idea how it would work with having more than 1 person/can you get or do a joint ownership scheme with someone other than a partner/wife etc (and no I'm not going to fill that role )

Well good broadband is a must, a proper shower, and ample parking. Those are pretty much my only requirements.

Good Broadband: Shoud be. I don't think Reading is quite the blackhole Basingstoke is.
Proper Shower: I guess shouldn't be a problem to fit one if need be! But otherwise completely agree.
Ample Parking: Might be a sticking point with a flat. I would guess one space is the minimum and two is you're lucky. Three or four might mean using the visitor bays permanently.

I believe you can get joint mortgages on a shared ownership as my step-sister and her boyfriend did one, and they weren't offically joined in any way.

I guess you would want to be near a good road for ease of access? My Mum actually brought up a good point that I would probably be commuting the other way to everyone else (out of the city and away from London), so it might not be such a big concern for me as I first thought. Still, I would probably replace the ST220!

[Guy]

Good Broadband: Shoud be. I don't think Reading is quite the blackhole Basingstoke is.
Proper Shower: I guess shouldn't be a problem to fit one if need be! But otherwise completely agree.
Ample Parking: Might be a sticking point with a flat. I would guess one space is the minimum and two is you're lucky. Three or four might mean using the visitor bays permanently.

I believe you can get joint mortgages on a shared ownership as my step-sister and her boyfriend did one, and they weren't offically joined in any way.

I guess you would want to be near a good road for ease of access? My Mum actually brought up a good point that I would probably be commuting the other way to everyone else (out of the city and away from London), so it might not be such a big concern for me as I first thought. Still, I would probably replace the ST220!

Basingstoke isnt that bad these days, just as long as its a respectable connection its all good.

Well when I say ample parking, as long as there is a dedicated space thats fine, and as long as its not miles away, then yeah I could deal with that. 1 proper space to park the daily is all I would ask!
Meh I'm sure I can still steal friends/families garages/driveways/space

Erm main route/road isnt 'too' much of an issue, as long as its no more than 20/25 miles away from the office then it would be do-able.

Get rid of the 220? Hmmm if your being the anti commuter, then nice clear run, no traffic to get stuck in, so there not that bad on fuels.

[Gerrard]

Where is the office? Also, I can get some money from work if I commute in, so should hopefully offset (unlikely to cover) fuel costs.

[petercook7]

part ownership is a con, the places they sell are just show boxes, thin wall etc... the list goes on.

[Guy]

Where is the office? Also, I can get some money from work if I commute in, so should hopefully offset (unlikely to cover) fuel costs.

Hook, well near as makes no difference.

[Kumagoro]

I have started reading about this sort of thing and noticed this on one website

Cost of House £90,000 £200,000
Cost of 50% share £45,000 £100,000
Typical mortgage cost £76.00 p.w. £168.00 p.w.
Typical rent £50.00 p.w. £110.00 p.w.
Total you pay £126.00 p.w. £278.00 p.w.

Please Note: The rent, but not the mortgage, is eligible for Housing Benefit subject to your income.

Now for those on Housing benefit thats seems like a good opportunity

[Gerrard]

part ownership is a con, the places they sell are just show boxes, thin wall etc... the list goes on.

Well, I've spent the last couple of hours reading MoneySavingExpert forums, and there are a few who agree with you. With regards to thin walls etc, that's pretty much what I'm living in now, and is one of the reasons I wouldn't mind getting out of here. Still, no harm in looking and researching the possibilities for now. I'm off on holiday at the end of the month, so I'm not planning on rushing into anything yet.

[petercook7]

Well, I've spent the last couple of hours reading MoneySavingExpert forums, and there are a few who agree with you. With regards to thin walls etc, that's pretty much what I'm living in now, and is one of the reasons I wouldn't mind getting out of here. Still, no harm in looking and researching the possibilities for now. I'm off on holiday at the end of the month, so I'm not planning on rushing into anything yet.

When you buy a place you need to get your mate to take a music player and ask if he can go next door and play it, thats one of the best tests you can do to see the noise levels.

[malfunction]

Do you know Reading well? From what you've said I'm assuming you are and have been working there a while but based on the locations currently on the catalyst home buy site, and my possibly out of date knowledge of Reading, I would say that I wouldn't live near Oxford Road if you paid me... TA base, knocking shops and multiple tales of mugging when I was looking to buy in the area (admittedly ~8 years ago).