Help to Buy


Help to buy has now been going for a few months and there has been a surge in the market since the start of the Summer holidays.  The help to buy scheme provided by some banks and building societies enables purchasers to obtain a 95% loan. But are the two related?

We are now approaching the Christmas period and traditionally November and December are the best times to buy a house.  The number of potential purchasers reduce as people’s attention moves towards Christmas and in past years we have seen larger gaps between asking prices and purchase prices at this time of year.  Of course, you need to make sure the property is a sensible purchase and that’s where our home surveys come in.

Firstly, any significant repairs could mean that you are left out of pocket as soon as you move in.  This can leave you in negative equity very easily.  For example, on a £200,000 purchase with a help to buy loan of £190,000, there is only £10,000 of equity available to you.  Should you be paying £5,000 too much and then a bill for £5,000 comes in (for example due to damp or poor electrics), that £10,000 equity has just been swallowed up.  In 2008 we saw many people with £100% (or 110%) loans unable to sell their property as the sale figure would not clear their mortgage.

Whilst help to buy is certainly going to help purchasers obtain the mortgage and buy the house they want, it is important to consider the purchase and get professional advice.

For more information on Help to Buy, see:

http://www.helptobuy.org.uk/home-ownership-schemes/help-to-buy-equity-loans/

or

http://www.bbc.co.uk/news/uk-24061897


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