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dave

Housing Trust 25% Cash Towards New House

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Friend of mine has been renting from the Guiness Trust in Nottingham. Renting a flat that could easily fetch twice the rent he is paying as it is in the town centre. He only pays £300 for two bedroom flat. There is a massive waiting list for these properties. There is no right to buy on these properties, but they do offer cash incentives for anyone wishing to move onto there own home.

Previously this was set at 10k, he told me they have just changed this to 25% of the purchase value. I am presuming you need to be renting for a certain amount of years for this to apply. He was worried about the downturn in the market, now he does not care. Found a very nice place in Arnold, Nottingham for 175k, fully furnished. He knows the seller, he also knows there is room for bargaining.

Does anybody know about these cash incentives, are there any clauses / downfalls?

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Friend of mine has been renting from the Guiness Trust in Nottingham. Renting a flat that could easily fetch twice the rent he is paying as it is in the town centre. He only pays £300 for two bedroom flat. There is a massive waiting list for these properties. There is no right to buy on these properties, but they do offer cash incentives for anyone wishing to move onto there own home.

Previously this was set at 10k, he told me they have just changed this to 25% of the purchase value. I am presuming you need to be renting for a certain amount of years for this to apply. He was worried about the downturn in the market, now he does not care. Found a very nice place in Arnold, Nottingham for 175k, fully furnished. He knows the seller, he also knows there is room for bargaining.

Does anybody know about these cash incentives, are there any clauses / downfalls?

This is the last desperate gasp just before the maket down turns.

They were offered in the last House price boom/crash.

I have mentioned before on this forum about 'house blocking' a similar thing to 'bed blocking'.

Basically there are people sat in council/HA housing that would/could buy on the open market under normal circumstances but they are priced out.

At the same time waiting lists for council/HA property are increasing through normal demand and because debt etc is increasing. This means many people who would not normally have applied for council/HA housing now have too.

Cash incentives shift the backlog.

I seem to recall they were about £1000 last time (but don't quote me on that)...I think they covered all the fees (legal, surveyor, moving etc). The idea being that you could just move and pay a mortgage instead of rent without incurring all the associated removal costs.

I see these incentives as a critical measure in the housing market and I have been watching for this very thing. . IMO they mark the transition period when debt and over stretching starts to bite but hasn't yet fed through to the media/officialy figures etc ....

If these incentives spread out to all local councils then get your tin hat ...the crash has arrived.

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How do these work?

I assume they are not just giving away 25% of the cost in the form of cash!? If it is a loan, the "assistance" will be secured on the property. Do they take a second charge ranking behind the bank/building society funding the other 70-75%? Or is it a loan which has some uplift based on future value? The former removes your flexibility to move/refinance/upgrade (esp if markets correct) - the latter reduces your equity upside while leaving you exposed downwards.

I know someone who had two lenders secured on their house - it was not pretty when he got into financial difficulties. I would avoid it. The incentives have a cost.

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How do these work?

I assume they are not just giving away 25% of the cost in the form of cash!? If it is a loan, the "assistance" will be secured on the property. Do they take a second charge ranking behind the bank/building society funding the other 70-75%? Or is it a loan which has some uplift based on future value? The former removes your flexibility to move/refinance/upgrade (esp if markets correct) - the latter reduces your equity upside while leaving you exposed downwards.

I know someone who had two lenders secured on their house - it was not pretty when he got into financial difficulties. I would avoid it. The incentives have a cost.

It depends on the details. This could be one of two different things.

1) It is an open market share buy. You find a house on the open market...you buy 75% of it and the HA buy the other 25%. Note: this is different from traditional shared ownership when the HA build the house and then sell part of it to you.

2) It's a chash incentive. Last time they just gave you the cash. Cheaper than building new homes/putting people up in BB's etc etc.

If it is (2) then it really is desperation.

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This is the last desperate gasp just before the maket down turns.

They were offered in the last House price boom/crash.

...

If these incentives spread out to all local councils then get your tin hat ...the crash has arrived.

Isn't this precisely what the goverment did with the last budget where they are offering that for a higher interest rate the bank and the goverment will shareown 30% of the cost of the house (with first call on the money in the event of a fall in the house price). Its dodgy as shite and effectively its just a way of wrapping up extended lending multiples in a warm fuzzy "social initiative" with no risk to either banks or the government.

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It depends on the details. This could be one of two different things.

1) It is an open market share buy. You find a house on the open market...you buy 75% of it and the HA buy the other 25%. Note: this is different from traditional shared ownership when the HA build the house and then sell part of it to you.

2) It's a chash incentive. Last time they just gave you the cash. Cheaper than building new homes/putting people up in BB's etc etc.

If it is (2) then it really is desperation.

Just found out more details. The HA (Guiness Trust) own 25% of your house. But apparently the debt gets cleared when you die. There is no interim rent to pay. If you sell the house again, then the HA will get 25% of the house sale. Very good if you do not plan to move again. Friend is more than happy with the arrangement, but has to wait until October to find if there application is succesfull. There is only a limited amount of money allocated. Have been told there chances are good.

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  • 301 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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