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Dream Big: The New Route Into A 10X Salary Property Nightmare

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Tomorrow's Times has an article about a start-up (Unmortgage.com) that "helps" you buy a home worth ten times your salary.

http://www.thetimes.co.uk/article/dream-big-the-new-route-into-property-76x5mlt8g

Based on the salary of a prospective homeowner and the area in which he or she wants to live, Unmortgage.com will offer a budget for a new home of up to ten times your income.

You need to find 5 per cent of the value of a property you wish to buy and Unmortgage.com will pay the rest of the purchase price. This means that you own 5 per cent of the property and will need to pay a monthly sum to Unmortgage.com to live there. Your monthly payments can be increased to up your stake in the property

Your rent will increase year by year in line with the Retail Prices Index (RPI) or 3 per cent, whichever is greater.

As well as the 5 per cent deposit you will also pay 5 per cent of all other purchase costs, which include the survey, conveyancing and stamp duty.

An individual with a £50,000 income and a deposit of £25,000 would be eligible to find a property to purchase in Clapham, southwest London, of £450,000. The deposit required would be £22,500 and purchase costs would be £950.

​Seems more like a very expensive way of renting than a sensible way of purchasing a home to me.

For Unmortgage it looks like a pretty good deal, as even if the buyer continually overpays to build up their stake in the property, the 3% minimum annual increase in the rent means that the rent they charge is likely to carry on increasing year on year (for some reason the quoted example overlooks this).

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That sounds remarkably like Gentoo's Genie Home Purchase Plan scheme that they killed back in March...

http://www.insidehousing.co.uk/gentoo-scraps-genie-scheme/7014311.article

and a marketing story about it from 2 years ago http://www.mirror.co.uk/news/uk-news/john-prescott-genie-home-purchase-4176222

But yep its basically an islamic mortgage type scheme packaged differently...

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It's worse than renting ....lol... do they take a 95% share of maintenance costs or is the mug 'owner' just a glorified caretaker saddled with the liability of maintenance ... the financially illiterate population deserve these charlatans...

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It's worse than renting ....lol... do they take a 95% share of maintenance costs or is the mug 'owner' just a glorified caretaker saddled with the liability of maintenance ... the financially illiterate population deserve these charlatans...

Was wondering the exact same thing - if it's "rent" then surely the person you pay "rent" to picks up the bill when the boiler goes pop or the roof starts leaking...

ETA sorry just seen it's called a "monthly sum" :blink:

Edited by funinhounslow

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It's worse than renting ....lol... do they take a 95% share of maintenance costs or is the mug 'owner' just a glorified caretaker saddled with the liability of maintenance ... the financially illiterate population deserve these charlatans...

Even IF the "landlord" pays, imagine the hassle of having to contact them everytime you wanted to do a bit of DIY or a simple repair. They'd act like an insurance company, by default likely countering anything you request.

I also wonder what happens when house prices fall? Surely the "landlord" will want to sell - do you have any say as a 5% stakeholder (ha!)?

I've got an idea! Make house prices affordable - then you don't have daft schemes like this.

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Even IF the "landlord" pays, imagine the hassle of having to contact them everytime you wanted to do a bit of DIY or a simple repair. They'd act like an insurance company, by default likely countering anything you request.

I also wonder what happens when house prices fall? Surely the "landlord" will want to sell - do you have any say as a 5% stakeholder (ha!)?

I've got an idea! Make house prices affordable - then you don't have daft schemes like this.

Sadly leverage at 10x will make property even more unaffordable not less... it's a sad day for homeowners and the banksters can pop the bubbly tonight

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Is that rent increase of three percent per year compounded? So long as your wages do the same it's party time :s

Yep it's compounded. It was the reason why I turned down the chance to write the software that ran genie, if you ever stopped getting pay rises you are instantly screwed. I'm sure people on here will say that I have weird morals but meh, I'm not party to any disasters created by the scheme so can always sleep at night.

One thing about a mortgage is that unless interest rates go sky high generally your repayments reduce relative to your income /inflation. On these schemes the opposite occurs and that's before you look at the utterly insane level of borrowing

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That sounds remarkably like Gentoo's Genie Home Purchase Plan scheme that they killed back in March...http://www.insidehousing.co.uk/gentoo-scraps-genie-scheme/7014311.articleand a marketing story about it from 2 years ago http://www.mirror.co.uk/news/uk-news/john-prescott-genie-home-purchase-4176222But yep its basically an islamic mortgage type scheme packaged differently...

John Presscott thought its a great.

Any finance approved by a ship waiter is good enough for me....

180k for a house in Sunderland ffs.

950 a month for 30 fcking years.... with little wage inflation....,

Innumerate fcktard.

Edited by spyguy

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John Presscott thought its a great.

Any finance approved by a ship waiter is good enough for me....

180k for a house in Sunderland ffs.

950 a month for 30 fcking years.... with little wage inflation....,

Innumerate fcktard.

Prescott is an inbred cretin

Oh how I laughed when he discovered on Who Do You Think You Are that his great grandfather married fcked and had four further children with his own daughter - the fcking hill-billy

My favourite tale is when Heseltine would snap his fingers in the House of Commons bar at him "Two gin and tonics steward"

Did i tell you I loathe prescott?

Edited by knock out johnny

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Pathfinder.

Need I quote a more stupid policy to regenerate the north....demolish thousands of perfectly good houses so that prices rise and credit flows into the economy.

Yeah and increasing new build per acre dwelling density to rabbit hutch dimensions

The cnt should be under investigation

cnt

Edited by knock out johnny

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This sounds like something similar to an Islamic mortgage?

You won't get 10x on an Islamic mortgage. It's usually a lot less than a conventional. The setup does look similar thou, no idea how they offer 10x. I suspect it's intentionally limited to a few postcodes and properties that they can confidently take off you and resell or rent when you fail to keep up with payments.

Edited by AvoidDebt

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Islamic finance is a doddle. Just roll up the interedt and get them to pay it back.

Just bung an imam a bung and bottle of whisky to ok it.

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There's something not quite right about that website http://unmortgage.com/#/calculator

It limits the property to very specific areas - is it a cover for a new homes builder to start to unload their glut of unsellable newbuilds?

That would make sense, I cannot think of another plausible reason for launching the scheme at this point in a property price cycle.

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Genie was limited to the NE.

There really nit a short of property. Theres loads for sale, lots better and cheaper than the article.

Also, in the examole, the payment goes up as they own more of the house. Anyone like to explain that?

If ut walks like a scam, quacks like a scam thaen its a scam

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It's worse than renting ....lol... do they take a 95% share of maintenance costs or is the mug 'owner' just a glorified caretaker saddled with the liability of maintenance ... the financially illiterate population deserve these charlatans...

Bingo! but imagine the looks of pride when you tell your friends and family that you are on the propertiee ladder! :P

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Sure this scheme is a sure-fire loser, but there's one interesting thing about it. No new money creation. Instead of a bank lending the 95% needed to match the buyer's 5% into existence, it (supposedly) comes from pre-existing cash supplied by investors.

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Your rent will increase year by year in line with the Retail Prices Index (RPI) or 3 per cent, whichever is greater.

As rents have apparently been pretty static over recent years that condition seems to get round that. Rpi All Items is currently 1.8%.

As the owner/renter is living there they might still be liable for the full council tax and full maintenance charge (depending of course on the exact conditions which don't seem to spring out at you on the website).

Edited by billybong

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As rents have apparently been pretty static over recent years that condition seems to get round that. Rpi All Items is currently 1.8%.

As the owner/renter is living there they might still be liable for the full council tax and full maintenance charge (depending of course on the exact conditions which don't seem to spring out at you on the website).

Not in London they haven't

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