Help to buy equity loan - Anyone know about this?

JSP214

Member
Messages
131
So we went to look at a house today and for the first time ever we both loved it, it ticked every single box and subject to us getting the governments help to buy 20% equity loan it was affordable. Needless to say we were thrilled.

However, despite the property being a new build, (a help to buy requirement), it turns out that the builder has to register for this and as this property was a self build by the people who live next door they’re not registered for help to buy schemes and the deadline for registration was 31/07/20.

We could buy without the equity loan but it’d make it a lot more expensive and we’d need a 95% LTV mortgage and they appear to be like hens teeth at the moment.

Regrettably therefore I think we’ll have to pass on it, unless anyone on here knows of anyway round this?

I was wondering if smaller builders in this situation can sell their houses through a help to buy intermediary of some sort, who is already registered for the 2020 scheme? (The 2021 scheme is for first time buyers only so we wouldn’t fit the criteria).

Any suggestions gratefully received.
 

Oishi

Member
Messages
825
I'm over here in the US so my advice is suspect at best, but I would have the builder apply now for the help to buy scheme, and say that they missed the deadline because of the Covid lockdown. Couldn't hurt to try?
 

Swedish Paul

Member
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1,807
I wouldn’t buy any house built after 1990 that is in a terrace, town house, semi-detached, cos you can hear your neighbors farting. The standard of house building is so poor. Can’t understand how the building regs allow it.
 

JSP214

Member
Messages
131
I wouldn’t buy any house built after 1990 that is in a terrace, town house, semi-detached, cos you can hear your neighbors farting. The standard of house building is so poor. Can’t understand how the building regs allow it.
I agree with you entirely, the house we’ve looked at is detached.
 

nigw

Member
Messages
904
I don’t think there’s a way round it. You’ll struggle to get anything more than 80-85% LTV. I’d say your only other option, depending on how much you need to get 20% deposit together (you might only need 15% but you also need to allow for purchase costs), is to borrow it - either from family directly, or if you have someone in your family that would take out a personal unsecured loan and then lend you that (though they’d need to put in writing that they ‘gift’ you the money, to show the lender), and you meet the monthly repayments. Obviously you can’t take a loan out yourself as the mortgage company will be on to you.

All of the above is if you’re desperate to buy and if this place is a great deal. Otherwise I’d say wait and save for a while longer. Boris is talking about a new help to buy scheme, where the government would underwrite higher LTV mortgages. It’s also likely that house prices will at least level off, and will probably fall in some areas over the coming year.

We recently accepted an offer for one of our properties from a first time buyer who had a recent (since COVID) mortgage in principle on an assumed 85% LTV. They’ve now pulled out of the sale because their lender withdrew the mortgage offer and they can’t get one with anyone else. This end of the market does seem to be struggling.
 
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Ewan

Member
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6,757
Not sure of your location, but here in Dorset I’d say it’s not the time to buy, least of all with a high LTV. Prices have risen around 10-20% over the summer, but many suspect they will fall back again next Spring/Summer, depending on the severity of the potential recession.

A house near me was on the market at £2m all last year with no bids. They took it off for a few months and re-listed it this summer at the same price. Sold at £2.7m within a couple of days. Around here, any good sized house with some land is selling to London-leaving cash buyers within days.

I agree with the advice given above - maybe wait a few months to see what happens to the market and save hard (or borrow from a friend/relative) to increase your deposit.
 

nigw

Member
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904
Ps I know it’s not in the theme of a Maserati forum, but if you’re trying to buy a home and struggling to afford it, why have £20k (plus running costs) tied up in a 15 year old Maserati? I sound like my dad here, but you can always buy a better car when you can afford it without it affecting other aspects of your life. I sold my TVR and bought a cheap runaround when I got my first house.... it wasn’t a big deal, and wasn’t for that long.
 
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mjheathcote

Centenary Club
Messages
9,033
I wouldn’t buy any house built after 1990 that is in a terrace, town house, semi-detached, cos you can hear your neighbors farting. The standard of house building is so poor. Can’t understand how the building regs allow it.

The majority of the new builds around here are all town houses on three floors.
A single garage too small to fit any average sized car, and off road parking for one infront of the garage door.
Most are young families, with obvious parking issues, and very small gardens, and older buyers don't want 3 floors.
We aren't in a built up city/town it's just the builders can, and get more return packing them in. Three for one on ground surface area.
Detached houses with proper garages and parking are simply £££ as a result.
I do feel sorry for first/second time buyers, we managed to 'get in' before it got silly 20 years ago.
 

GeoffCapes

Member
Messages
14,000
This is my wife’s thing as she sells new builds.
If you want HTB then the builder has to be registered. You mentioned that the builder wasn’t registered. So effectively they have missed the boat and you won’t get HTB on that property.

She said that you won’t get another builder who is registered for HTB to register the property in their name as technically it’s fraud.

As was mentioned. Liquidate assets to get the difference if you can. Including the Maser. You can always get another.
 

mjheathcote

Centenary Club
Messages
9,033
Ps I know it’s not in the theme of a Maserati forum, but if you’re trying to buy a home and struggling to afford it, why have £20k (plus running costs) tied up in a 15 year old Maserati? I sound like my dad here, but you can always buy a better car when you can afford it without it affecting other aspects of your life. I sold my TVR and bought a cheap runaround when I got my first house.... it wasn’t a big deal, and wasn’t for that long.

We did the same, we both sold our daily drivers and bought a £400 Fiat Panda from the auctions,
Although back then our first house, a grade 2 listed Weavers Cottage with parking and a garage, was only £56K!
So selling a few older cars soon helped with the deposit.
House prices are so high now selling a car might not make much difference.
Was speaking to a colleague only last week, he was looking to move and was seeking a mortgage of over £300k over a term of 35 years to be able to afford it. He was struggling as being hourly paid and due to covid the overtime hours he needed wasn't there.
 

Simon1963

Member
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819
I agree sell costly assets if it’s the house you really want. I only ever bought one new build and all the other houses I’ve bought have needed at least cosmetic restoration. If you can do the work yourself over a period of time you’ll get more house and garage for your money. It’s a tricky market at the moment and I’d be very nervous of going to my limit on a house.
 

lifes2short

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5,821
the only advice i will give you is "buy the worst house in the best area" you cant change an area, new build fetch a premium and as said by others are mostly poor quality built, try and buy traditionally built brick/mortar
 
Messages
6,001
My take is wait. Stamp duty may be reintroduced in March?
House prices in my area have factored in this Stamp duty holiday and have increased proportionally
and little negotiation or bargaining takes place
Come March when duty is re imposed I suspect prices will fall to accommodate the duty. Te market will stagnate (at best)
Meanwhile do as others have suggested sell your Maser etc and get the deposit ready. Also in that time of 5 months other things may have altered (or not). Never buy in a hurry and buy a home not a house
All my opinion of course
 

Nayf

Member
Messages
2,734
I bought with H2B. Now my experiences might be different to you but if in any way possible I’d avoid it.

1. You can’t ‘overpay’ like a normal loan. It’s the full amount or your usual monthly rate.

2. The amount repayable is based on what the house is worth rather than the original loan. So my £120k house is now £170k (apparently) so I pay back more.

3. if you haven’t cleared the loan, then it’s deducted from your sale when you move on

4. if you buy another house you can’t then let out the H2B house for three or five years (can’t remember which).

That was the case the last I checked.
 

lifes2short

Member
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5,821
2. The amount repayable is based on what the house is worth rather than the original loan. So my £120k house is now £170k (apparently) so I pay back more.

really, feck me that's a p1ss take, defo one good reason to give it a wide berth,
 

nigw

Member
Messages
904
really, feck me that's a p1ss take, defo one good reason to give it a wide berth,

It’s not a pisstake in the slightest! It’s equity-share to help people that want to buy, and who at that time don’t have the luxury of giving it a wide berth.

I don’t think it’s unreasonable at all for people to pay the correct value to buy the share of a property that they don’t own, if it has gone up in value (i.e. the equity share). The counter is of course also true.... if the value of the property falls under the equity share, you pay back less than the original value.

People in the UK are so programmed to believe the purpose or at least default of property is to make you wealthier. These schemes are to enable people to buy a home.
 

flexwing

Member
Messages
256
Hello all. Just had a read over the Government's web site regarding this product. Similar to Scottish scheme I am familiar with.
There are two types of support for purchasers. Equity loan and shared ownership.
The equity loan involves the Gov't taking an equity stake in your home. You dont pay interest for 5 years then it goes up to something like 1.25%.
So, the 25% stake is essentially a share in the property although you in law actually own the property 100%. This is unlike shared ownership where the ownership is actually split and you pay a occupancy charge(rent) on the balance.
Ths whole point of these schemes is to share the cost of purchase and also share in the benefit of price growth. Of course this works both ways and if the value plummets then you dont take the whole hit. This did in fact happen during the financial crash and many housing associations were hit bad.
These schemes do not involve the Gov't giving you free money as such.
Also, certainly in Scotland, housing associations act as agents and you might find a way in which you can use one of them to assist you in buying the house. The web site makes reference to agents in England as well.
Hope this makes sense.
 

nigw

Member
Messages
904
In Scotland the “First Home Fund” ended on 2nd October I think, apparently due to the high number of applications. I think the help to buy (applicable to new builds only) is still running unchanged though.
 

lifes2short

Member
Messages
5,821
It’s not a pisstake in the slightest! It’s equity-share to help people that want to buy, and who at that time don’t have the luxury of giving it a wide berth.

I don’t think it’s unreasonable at all for people to pay the correct value to buy the share of a property that they don’t own, if it has gone up in value (i.e. the equity share). The counter is of course also true.... if the value of the property falls under the equity share, you pay back less than the original value.

People in the UK are so programmed to believe the purpose or at least default of property is to make you wealthier. These schemes are to enable people to buy a home.

every day is a school day, i know nowt about it, however, from Nayf's post it does seem a bit of a p1ss take to me and is simply my opinion, if properly explained to green buyers then fine but how many are simply going in to it with eyes wide shut i wonder