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LittleSteroid

Part Buy/part Rent

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Hi guys. Need help. Again :D

What is better for me?

Option 1:

I've found the house for 150k. That's all me and my wife can do with 25k deposit. We dont want to pay more than 650 quid a month. This means 30 years mortgage at circa 4.5%. After 30 years house is mine and I spent over 100k in interest alone. I saved little or no money for my retirement and I am f****d.

Option 2:

I've found house I like under part buy/part rent scheme (local authority). Same price but I only need mortgage for 75k. That's 50k over 10 years at lower interest (4%). My monthly payment will be the same, 650 quid (520 mortgage + rent 130). After 10 years I own 50% of the house and only pay 130 a month to housing association. For the next 20 years I am going to save 500 pounds at 4% interest. My investment will be worth circa 190k. So at an age of 60, I can buy all the remaining shares, own 100% of my house and spend what's left for my retirement. Even thou I spent extra 30k on renting my place for 20 years it seems to be a better choice.

So why would I go for option 1? What am I missing? Surely there must be something. Help! :unsure:

Edited by LittleSteroid

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This means 30 years mortgage at circa 4.5%.

Please be aware that interest rates could very well be north of 7% in the next ten years, although I think they may not rise for a year or two. Also, your disposable income will be depressed through taxation and inflation.

I know I'm not addressing your main point, its just that you seemed to have a lot of certainty in the current economic conditions holding for the long term, which they wont.

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Hi guys. Need help. Again :D

What is better for me?

Option 1:

I've found the house for 150k. That's all me and my wife can do with 25k deposit. We dont want to pay more than 650 quid a month. This means 30 years mortgage at circa 4.5%. After 30 years house is mine and I spent over 100k in interest alone. I saved little or no money for my retirement and I am f****d.

Option 2:

I've found house I like under part buy/part rent scheme (local authority). Same price but I only need mortgage for 75k. That's 50k over 10 years at lower interest (4%). My monthly payment will be the same, 650 quid (520 mortgage + rent 130). After 10 years I own 50% of the house and only pay 130 a month to housing association. For the next 20 years I am going to save 500 pounds at 4% interest. My investment will be worth circa 190k. So at an age of 60, I can buy all the remaining shares, own 100% of my house and spend what's left for my retirement. Even thou I spent extra 30k on renting my place for 20 years it seems to be a better choice.

So why would I go for option 1? What am I missing? Surely there must be something. Help! :unsure:

Im a bit lost

" for the next 20 years I am going to save 500 pounds at 4% interest rate "

Is that you paying out less or taking money from your pocket and putting it aside ?

Also the rent form the HA will that rise ?

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Im a bit lost

" for the next 20 years I am going to save 500 pounds at 4% interest rate "

Is that you paying out less or taking money from your pocket and putting it aside ?

Also the rent form the HA will that rise ?

For 20 years I will save what I would otherwise spend on mortgage repayments.

As for the HA rent. Well thats the bugger. I dont know but they ment to be kept well below market rent.

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Please be aware that interest rates could very well be north of 7% in the next ten years, although I think they may not rise for a year or two. Also, your disposable income will be depressed through taxation and inflation.

I know I'm not addressing your main point, its just that you seemed to have a lot of certainty in the current economic conditions holding for the long term, which they wont.

I know, thats why 10 years fix at lower rate just seems to be the better option.

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Is the price of the other 50% fixed ?

Another question is this a house or a flat ? If it is a flat then there will be service charges.

And another the HA house if it was full buy being sold in the second hand market what would be the true value ? Sometimes these part rent part buy places do seem on the expensive side .

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Is the price of the other 50% fixed ?

Another question is this a house or a flat ? If it is a flat then there will be service charges.

And another the HA house if it was full buy being sold in the second hand market what would be the true value ? Sometimes these part rent part buy places do seem on the expensive side .

It's a house. And yes it seems to be 10k more than average house in the area. But I've heard there is a room for negotiations.

It's the rent I am worry about. How can they increase it? Inflation adjusted?

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It's a house. And yes it seems to be 10k more than average house in the area. But I've heard there is a room for negotiations.

It's the rent I am worry about. How can they increase it? Inflation adjusted?

Well there is 10k more to think about . If they were to drop 10k then so would the private house sale , if they don't then you are overpaying by 10k to start with. As for the rent ask before you sign on the dotted line if and how it can be raised .

And is the other 50% at a fixed price , if not who determins the value when you come to buy that part?

Edited by miko

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I suppose you had best consider if you see yourself living in the same geographical area in 30 years.

Like others have said, beware of the interest rates. There is only one direction they can go.

50% ownership, with the state having the other half of the booty is bad news. You still take all the risks and potentially get no reward as the goalpost can move at any point.

These schemes are only as good as the word of the present government sitting there in Westminster, and they have a five year lifespan, although I don't see this Blue/Yellow one lasting that long.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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