Boost for home-buyers as county developer offers support

“thomas1996 - absolutely right - part buy is for those working locally, wishing to stay put - but you would expect that won't you? Government subsidy is not for the fickle - but encouraging longer term stability - if you sell early expect a loss as you will have to sell it back to the housing Co and they in turn sell it to someone else that is in need - so a slow market.”

“NibNobs,

I can't help you with that sorry - I hadn't really looked at Cheltenham prices, as it's not my area, but having just done so, one word springs to mind - overpriced. The local wage cannot sustain the current prices. I know GCHQ is a big local employer, but most of the workers will be on less than £20k a year.

As you say there are no new 2 bed houses in Cheltenham for that price. I guess that is why places like Bishops Cleeve and Walton Cardiff in Tewkesbury became popular.

I imagine the Cotswold towns are even more overpriced. If you grew up in Moreton in Marsh, I expect you can forget about buying a house there.

Hopefully people do not take up these shared equity schemes and developers start to reduce prices instead. There have been big falls in prices in the USA, Spain, Portugal, Ireland and Japan has been falling for about 15 years, despite the fact it is also an overcrowded Island. Prices here will fall here and the longer they try and delay it, the bigger the crash we will have.”

“dontyaknow,
If you know where I could buy a brand new Bovis home for £150,000 in Cheltenham - please let me know. Add another £40-50k I'd say. For the 1st time buyer the mortgage would then be £1200+ per month and as you say that's what many people locally who work in retail working for £7.00 per hour (or less) take home per year. Add to that the 3x monthly utility bills, broadband, council tax, running a car, monthly food costs, car & house insurances, tv licence etc etc - a first time buyer will need to earn £2,000 take home a month to have a chance of buying a house. Heaven forbid should the couple want a child and fall back on one £15k salary!”

“The main hindrance for first time buyers is the actual price of properties. In many towns throughout the county a basic 2 bedroom house can cost £150k, which is completely unaffordable in a county where the average wage is about £15k.

These schemes are little more than the house builders attempts at keeping the market over inflated and should be outlawed by Governments and not encouraged. It annoys me that they use my taxes to keep house prices out of my reach.

honslknjklyt - if you don't qualify for these scams, you should count yourself lucky. People are already coming un stuck on them, and they will really struggle when they come to sell up. In 10 - 15 years, these sorts of schemes will be the new 'miss selling' scandle.

Additionally don't be fooled into comparing rental prices with monthly mortgage payments at current interest rates. Once rates are back up to normal levels, renting will be cheaper, if it isn't already anyway. Look at any house with a 10% deposit, at 5% interest rate and find a similar rental - the rental will be cheaper, but as you say, after 25 years you will have paid off a mortgage. Your friend did very well to find one cheaper than his flat - he must have found a motivated seller. 99% of houses up for sale at the moment are just 'kite flyers' or chancers with obscene prices.”

“honslknjklyt - I believe Social housing was started for exactly the reasons you set out. It was their so that working families could save up to buy a house. It was not meant as a permanent residence.
Council housing was never originally meant for the poor, it was to used to help get the average working family onto the housing ladder.”

“The problem with these part-bu/shared ownership schemes are:

1. If you want to move it's much more complicated to get out of the scheme as you have not one but TWO loans secured on the property.

2. If the couple entering into the scheme split up and one of them wants to move out, they are BOTH liable for the loans/debt. And what if the couple want nothing to do with each other? What if one can't afford to 'buy the other one out'? They have to sell and the problem is then 1. and 2.

I wouldn't touch shared ownership/part-buy simply because you cannot rely on a relationship lasting the typical 25 to 30 year length of the 2 mortgages.”

“A lot of these schemes only apply to social housing, whereas many don't qualify for that. It is these that are left on the scrap heap, paying high rents with nothing to show for it in the end. I know someone who has left a one bedroomed flat, private accomodation and now has a mortgage for a 3 bed house and the mortgage on the house is cheaper than what he was paying rent and in the end, he will own that house.

It is so hard to save up thousands of pounds deposit when paying high rents. The money just does not stretch to live for now and save for tomorrow.”

“The main hindrance to first time buyers is - getting the deposit and then the mortgage. Whilst a 15% part buy would help, they still have to get the 5% deposit and mortgage for the other 80%.

Private developers would get their pound of flesh and taking such schemes might reduce flexibility - say haggling over the price for instance.

Similar part ownership coupled with social rents are available from social housing Cos - often in the same estates as private developments and similar houses - these are substantially cheaper - for example a 25 0r 40% shared buy would be far easier for a first time buyer with some saving. Check if there are similar deals at the Bovis estates from the local social housing Co.”