AndyKent
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Registered: 3rd Sep 05
User status: Offline
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I know from looking into the schemes that I don't rate them one bit.
Remember that most shared ownership schemes are on brand new housing estates where the developers don't want to take less profit than originally planned for. In recent times they've realised that they can't get away with offering a two bed flat for over 100k - the stuff just doesn't sell. Instead they stick them up on 50% share for £50k making it appear cheaper. Effectively you're buying at old prices though.
If there was no shared ownership, the developers would have to drop prices to a sensible level but with it they can keep prices up. How far that went would depend on how what was properly affordable to first time buyers - all this 'help you onto the ladder' is crap, they just want to sell their property for as much as possible, even if it means only selling 50% of it now.
As for negative equity, its irrelevant really. The market goes where it goes, if that drop people into negative equity it just proves that they bought at the wrong time (not really their fault though).
Problem is, people can't wait to move out, but don't want to save for it either..........
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
User status: Online
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I agree with Andy, SO is just a way to continue paying too much.
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A2H GO
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Registered: 14th Sep 04
Location: Stoke
User status: Offline
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You are talking about and ideal world that will never exist though, its like saying, without car finance schemes cars prices would have to drop to a more affordable level, i would love for house prices to be affordable for FTB's but if your a FTB now what option have you got?
The truth is that SO is is avaliable, people will never stop opting for the scheme as long as its avaliable so from a goverment point of view its working. This in effect leaves FTB's two options, to save up a stupid amount for a deposit(unless they are lucky enough to have parents/grandparents to gift them some) or opt for the schemes.
People who buy on these schemes, as they are generally on new builds, know they are going to pay over the odds for the property, as with all new builds but at least its a step on the ladder. We paid £115,000 in total for our new build on SO, we had 2 seperate valuations done, one came in at £115,000 and another at £121,000. It would have taken me another 2-3 years to save up a deposit to mortgage the full 100% to start with, in which time i will have paid 15% of my mortgage off and with any luck the vaule of the house will have risen.
Like with most government initives in the economy, what benefits one person is more than likely going to disadvantage another.
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AndyKent
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Registered: 3rd Sep 05
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How old are you mate?
Those valuations are useless tbh. All they do is look at the prices paid for properties nearby, and if they've been done on SO they're bound to be the same as what you paid. As worthless as the paper they're written on. Fact is that if people can't afford the full price, then its too expensive, full stop.
What FTBs should do is boycott the schemes. As soon as more people wake up and realise that its a scam, the sooner prices will be forced to drop. If prices were lower you wouldn't need such a hefty deposit and everyones a winner.
The other problem is that people just don't want to wait. You mentioned about saving up £12,000 - I can't see the problem. When my parents bought their first house they had saved 30% of its value in the previous 3 years to be able to very comfortably afford it. Why can't we do the same now?
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A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
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Im 23 Andy, i totaly understand what your saying and i think your right, people including me dont want to wait. Wages hav not increased over the years in line with house prices, you say your parents saved 30% of their house price in 3 years, for me this would have been £33,000, i worked out it would take me neary 8 years to save that on my wage. I also don't think enough FTB's know how the schemes affect house prices and so it will never get boycotted. I paid £115,000 for my house, i initially bought a 25% share, paid put down a 25% deposit(5% paid by the builder) therefore needing a £6000 deposit. Less than 4 months later i remortgaged for the full 100%, which means i in effect have a 100% mortgage with a £6000 deposit, which is 95% loan to value, which in this market is unheard of. Not to mention gettin £7k knocked off the house price, fitted carpets and an alarm fitted as part of the deal.
[Edited on 17-06-2009 by CorsAsh-Sport]
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AndyKent
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Registered: 3rd Sep 05
User status: Offline
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Yeh, I do realise wages haven't gone with prices, but in three years I could fairly easily do 15k, and would imagine a lot of people could too if they really put their mind to it. That would be a decent deposit amount and is what I'm going for.
I agree though, not enough people take a lot of time to work it out, or indeed want to wait - totally up to them I suppose.
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