Jump to content
House Price Crash Forum
Sign in to follow this  
AskFrank

Shared Equity For Selected People Rather Than Plots!

Recommended Posts

I said I wanted to buy a property using the shared equity scheme. They said Nah! They could only help 3 out of every 10 buyers that walked through their door...

Surely this is discrimination? Are they breaking any laws?

Of course it's up to them if they want to offer Shared Equity on 'selected plots' but surely saying only 3 lucky buyers will get help is not right?

Share this post


Link to post
Share on other sites
I said I wanted to buy a property using the shared equity scheme. They said Nah! They could only help 3 out of every 10 buyers that walked through their door...

Surely this is discrimination? Are they breaking any laws?

Of course it's up to them if they want to offer Shared Equity on 'selected plots' but surely saying only 3 lucky buyers will get help is not right?

All social housing is discrimination, by definition. Some get it, others just get to pay for it.

Share this post


Link to post
Share on other sites

Did you try wearing a wig and walking in again?

Were there criteria, I mean, did they mean that of 10 people who walk in, only 3 will qualify. e.g. I wouldn't qualify because you need to be on the council list for a lot of them. Then there's a top earnings limit (I'd qualify under that). Then you need to be mortgageable.

Was he suggesting it's names out of hats, or just that only 3/10 people would qualify under the criteria?

The one that annoys me for a lot of them is that "this is the only way you'd be able to afford to buy a property", yet a quick scan through listings would often mean that people within their earnings criteria would actually have had a choice. It's all baloney.

Share this post


Link to post
Share on other sites
Did you try wearing a wig and walking in again?

Were there criteria, I mean, did they mean that of 10 people who walk in, only 3 will qualify. e.g. I wouldn't qualify because you need to be on the council list for a lot of them. Then there's a top earnings limit (I'd qualify under that). Then you need to be mortgageable.

Was he suggesting it's names out of hats, or just that only 3/10 people would qualify under the criteria?

The one that annoys me for a lot of them is that "this is the only way you'd be able to afford to buy a property", yet a quick scan through listings would often mean that people within their earnings criteria would actually have had a choice. It's all baloney.

:lol: Actually, I'm considering getting some friends to give them a call to see if any have any luck!

There is no criteria as such. Just that you must use their mortgage advisers and take your mortgage out with them using one of these special shared equity scheme deals. We have been given the clear by their mortgage advisor's and 'activated' as they have put it.

It's simply a case of being one of the lucky 3 through the door at the right time. I think they have reached their quota at present, hence 7 regular buyers need to buy before they let another 3 have shared equity.

I understand they don't want to overstretch this deal, but to select people on a luck basis or possibly the sales executives select on a personal favourite basis, is extremely unfair.

I know a lot of builders advertise selected plots which to me appears a lot more fairer.

Share this post


Link to post
Share on other sites
:lol: Actually, I'm considering getting some friends to give them a call to see if any have any luck!

There is no criteria as such. Just that you must use their mortgage advisers and take your mortgage out with them using one of these special shared equity scheme deals. We have been given the clear by their mortgage advisor's and 'activated' as they have put it.

It's simply a case of being one of the lucky 3 through the door at the right time. I think they have reached their quota at present, hence 7 regular buyers need to buy before they let another 3 have shared equity.

I understand they don't want to overstretch this deal, but to select people on a luck basis or possibly the sales executives select on a personal favourite basis, is extremely unfair.

I know a lot of builders advertise selected plots which to me appears a lot more fairer.

If it is Open Market Homebuy, they have reached their quota for the whole year now. You need to go back next April.

Share this post


Link to post
Share on other sites

Sorry to be a spoilsport

But shared equity is a complete mugs game IMO.

If my kids asked my advice on this I would tell them to avoid these schemes like the plague.

All they are doing is making properties that are overpriced 'affordable' by only selling you part of it.

Share this post


Link to post
Share on other sites
If it is Open Market Homebuy, they have reached their quota for the whole year now. You need to go back next April.

No it's not Open Market Homebuy.

So someone else could walk in at the right time and buy the exact same property using this scheme. I am so angry - I am tempted to take this to the press.

Share this post


Link to post
Share on other sites
Sorry to be a spoilsport

But shared equity is a complete mugs game IMO.

If my kids asked my advice on this I would tell them to avoid these schemes like the plague.

All they are doing is making properties that are overpriced 'affordable' by only selling you part of it.

It's not for everyone but I think it is smallminded to suggest that it's a mug's game without knowing individual people's circumstances.

Share this post


Link to post
Share on other sites

I've never worked out who qualifies for social or shared equity housing whether its part of a development or as part of a housing trust... in my experience it ranges from the simply lower paid FTB doing nothing "social" for their job to a chief constable taking on a very expensive london flat... it seems there are so many dodges etc and it also appears theres no real value gain that its all a very very strange area.

Share this post


Link to post
Share on other sites
I've never worked out who qualifies for social or shared equity housing whether its part of a development or as part of a housing trust... in my experience it ranges from the simply lower paid FTB doing nothing "social" for their job to a chief constable taking on a very expensive london flat... it seems there are so many dodges etc and it also appears theres no real value gain that its all a very very strange area.

You are all barking up the wrong tree. I'm not talking about these government run schemes that are aimed at low earners or teachers, police, doctors and nurses.

There is a lot to gain from a shared equity scheme like this one, at the moment. You own 100% of the house, but the builder PAYS for 25% now. Hence you can get a good mortgage deal with at least 25% deposit and stump up your own deposit on top. Hence in our case, we are only looking for a mortgage for the 50%.

To us, this also makes sense in the current market. We are bears. We strongly believe prices have a lot further to fall, but we are also expecting, hence why I want to settle down now. If say in a couple of years house prices have fallen another 25% (which I believe they will - one way or another), what we owe the builder will also drop 25% (Builder pays 25% - 25% of that 25% = what we then owe). We can pay them back at any point. So as soon as it has dropped further, we will get in there and pay the rest.

Of course there is the risk, prices will rise massively. But houses are a risk full stop and if this scenario happened and we couldn't pay for it, we have 10 years within which to sell up and in effect our 75% will have gone up too - hence this is a win win situation for us to be honest.

Btw, I ain't no mug. I know what I am doing (or not being allowed to do!)

Share this post


Link to post
Share on other sites
Guest KingCharles1st

"To us, this also makes sense in the current market. We are bears. We strongly believe prices have a lot further to fall, but we are also expecting, hence why I want to settle down now. If say in a couple of years house prices have fallen another 25% (which I believe they will - one way or another), what we owe the builder will also drop 25% (Builder pays 25% - 25% of that 25% = what we then owe). We can pay them back at any point. So as soon as it has dropped further, we will get in there and pay the rest."

Interesting idea. But would the other party not put in a rider that said the "value" (in terms of £) 25% you owe THEM would have to be the same as taken out at the time of the original transaction?

Share this post


Link to post
Share on other sites
You are all barking up the wrong tree. I'm not talking about these government run schemes that are aimed at low earners or teachers, police, doctors and nurses.

There is a lot to gain from a shared equity scheme like this one, at the moment. You own 100% of the house, but the builder PAYS for 25% now. Hence you can get a good mortgage deal with at least 25% deposit and stump up your own deposit on top. Hence in our case, we are only looking for a mortgage for the 50%.

To us, this also makes sense in the current market. We are bears. We strongly believe prices have a lot further to fall, but we are also expecting, hence why I want to settle down now. If say in a couple of years house prices have fallen another 25% (which I believe they will - one way or another), what we owe the builder will also drop 25% (Builder pays 25% - 25% of that 25% = what we then owe). We can pay them back at any point. So as soon as it has dropped further, we will get in there and pay the rest.

Of course there is the risk, prices will rise massively. But houses are a risk full stop and if this scenario happened and we couldn't pay for it, we have 10 years within which to sell up and in effect our 75% will have gone up too - hence this is a win win situation for us to be honest.

Btw, I ain't no mug. I know what I am doing (or not being allowed to do!)

I suggest you re-read your T&Cs

you are suggesting a builder will sell you a new property at HIS valuation and LEND you 25% AND that if the valuatio goes down so does his LOAN...and yet you say he has no equity...

I suggest this is an instant equity scheme, ie an overvaluation....he gets what he expects up front with the added bonus of you having to stump up another 25% later.

Edited by Bloo Loo

Share this post


Link to post
Share on other sites
"To us, this also makes sense in the current market. We are bears. We strongly believe prices have a lot further to fall, but we are also expecting, hence why I want to settle down now. If say in a couple of years house prices have fallen another 25% (which I believe they will - one way or another), what we owe the builder will also drop 25% (Builder pays 25% - 25% of that 25% = what we then owe). We can pay them back at any point. So as soon as it has dropped further, we will get in there and pay the rest."

Interesting idea. But would the other party not put in a rider that said the "value" (in terms of £) 25% you owe THEM would have to be the same as taken out at the time of the original transaction?

I've read the T&Cs and if prices go down, we would owe 25% of that current value.

I don't think builders are THAT fussed are they? They don't really take out a loan to fund the 25% do they? I would guess it only costs them 25% to build the home in real terms anyway.

Share this post


Link to post
Share on other sites
I suggest this is an instant equity scheme, ie an overvaluation....he gets what he expects up front with the added bonus of you having to stump up another 25% later.

I think you are right, and perhaps this is the real reason we are not being given the shared equity deal now as I feel these properties have been very well priced in the current market and add to that the interest free loan for 10 years, the good mortgage rate we could get. I wouldn't call it a bad deal.

Share this post


Link to post
Share on other sites
I think you are right, and perhaps this is the real reason we are not being given the shared equity deal now as I feel these properties have been very well priced in the current market and add to that the interest free loan for 10 years, the good mortgage rate we could get. I wouldn't call it a bad deal.

sounds to me no-one is getting the deal. its a draw to get you onto the site and into a sales interview.

Share this post


Link to post
Share on other sites
When it's time to pay back the 25% who does the valuation?

If you are selling the property, it's 25% of whatever you sell it for. No valuation is required other than the one from the local Estate Agent.

If you want to buy whilst still living there, they organise 3 independent valuations.

Share this post


Link to post
Share on other sites
sounds to me no-one is getting the deal. its a draw to get you onto the site and into a sales interview.

Are they legally allowed to do that?

I think that's breaking the law if they do not actually allow people to use the scheme. I have contacted their head office and waiting for their response.

Share this post


Link to post
Share on other sites
If you are selling the property, it's 25% of whatever you sell it for. No valuation is required other than the one from the local Estate Agent.

If you want to buy whilst still living there, they organise 3 independent valuations.

course, you could do the deal in your name, transfer the whole house to wifes name, keep it discreet, about 6 months into the ownership.

she now has 100%.

3 years from now, YOU go bankrupt.

IF its not their equity, you shaft them proper.

somehow, i doubt it.

Share this post


Link to post
Share on other sites
It's not for everyone but I think it is smallminded to suggest that it's a mug's game without knowing individual people's circumstances.

Well I did apologise in advance

And I added 'in my opinion'

I also said that this is what I would advise my own children and I gave my reasons.

I just assumed that people might want a range of opinions and that is why they ask questions.

At the end of the day they will make their own minds up anyway.

In my opinion shared equity schemes are just a clever device for selling overpriced property.

If an individual ends up defaulting and the property is in negative equity, does the minority owner take their share of the loss or are they guaranteed their 25% of any equity, then the individual takes the entire hit of any loss.

If this is the case it's just a one way bet, heads I win, tails you lose.

Share this post


Link to post
Share on other sites
Are they legally allowed to do that?

I think that's breaking the law if they do not actually allow people to use the scheme. I have contacted their head office and waiting for their response.

who is it?...some web research is called for.

Share this post


Link to post
Share on other sites
In my opinion shared equity schemes are just a clever device for selling overpriced property.

If an individual ends up defaulting and the property is in negative equity, does the minority owner take their share of the loss or are they guaranteed their 25% of any equity, then the individual takes the entire hit of any loss.

Agreed.

They are not guaranteed their 25%. If prices fall, their percentage also falls.

Edited by Mr G

Share this post


Link to post
Share on other sites
Guest KingCharles1st

I sat down and read this thread again after carbohydrates.

Price of house example 200K

Builder "lends" 25% deposit to you so you can pay builder 25% deposit- ok- lets run wit hthis great idea for now.

So you can now get (through the builder's mortgage "specialist") a mortgage on a house that now "may" be priced correctly- or god forbid- overvalued.

Good- and you are correct- this is the hook- that if you raise a decent mortgage deposit- it appears that you are now really forging ahead- good stuff eh...

But when you sell, firstly, CAN YOU SELL unless mortgage company says yes? but you sell when the market has reclaimed it's current levels of stupidity (that's up to you) so you sell a (originally valued)200K house for 200k 5-10 years down the line, thereby making no profit on this wonderful purchase, when in fact you could have not been locked in and possibly rented instead, or bought the same house further down the line when it has dropped another 25K.

So lets see, to be slightly more cynical, they are looking to dump a 150K house on you- for 150K. they then MAKE YOU use THEIR mortgage specialist- who WILL give them a backhander for the pleasure of doing the business. so that may be 10K.

WHEN you sell, you give them back 25% of the house value- which (if by amazing good fortune) is now 180K- then you py them 45K.

WOW- :rolleyes:

Share this post


Link to post
Share on other sites
Agreed.

They are not guaranteed their 25%. If prices fall, their percentage also falls.

Then that might explain why they now seem reluctant to do these deals?

Or perhaps they are holding out for the 'recovery' when they will be able to increase the price and still have people queueing up to buy?

Seems to me they will only offer these deals if they are going to make money out of them, which means somewhere along the line you will lose money.

Perhaps I am just too cynical.

However, when I took out my first home loan many years ago, I insisted on a 25 year repayment mortgage and everyone told me I was a fool for not having an endowment because it would pay my loan off in 10 years.

Well I actually paid paid off my repayment mortage in less than 10 years and what happened to everyone who took out endowment mortgages?

:blink:

Share this post


Link to post
Share on other sites
Price of house example 200K

Builder "lends" 25% deposit to you so you can pay builder 25% deposit- ok- lets run wit hthis great idea for now.

<snip>

So lets see, to be slightly more cynical, they are looking to dump a 150K house on you- for 150K. they then MAKE YOU use THEIR mortgage specialist- who WILL give them a backhander for the pleasure of doing the business. so that may be 10K.

WHEN you sell, you give them back 25% of the house value- which (if by amazing good fortune) is now 180K- then you py them 45K.

WOW- :rolleyes:

Dude, what you are criticising has nothing to do with the concept of shared equity.

Buying a 150k house for 200k is stupid however you finance it.

Using a mortgage specialist tied to your EA is stupid all the time.

Shared equity in the right circumstances i.e. to buy a 100k house that is "worth" 100k or more when you can only afford 50k but there are no houses for sale at 50k.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   285 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.