First Time Buyers

[BigDave]

The goverment gave us a grant towards buying a first time buyers house but it wasn't explained to us at the time that if we EVER want to sell it on the goverment will able to claim 30% of the fee we sell it on for.

 

We got a grant of £13,000 and at current market value, if we sold it on we would have to give the goverment back £48,000.

 

Not a bad few years work for the goverment.

 

This being the case we will never be able to move up the ladder.

 

The first time buyers scheme was actually changed after this cock up but it doesn't really help the people who live on this particular esate.

You still get to keep 70% for yourself though, which should still make you a tidy profit - unlike those on the new HPAS that have to sell their homes back to the government at the current cheap fixed price. You are so very much better off through being on the old HPAS compared to those on the new system. What a cock up eh?

 

Well the sad thing with the whole grant scheme is the money is written off after 5 years ?

 

Why is it the people don't pay it back ?

 

The grants are written off at 20% every 5 years, so it actually takes 25 years for it to disappear. Any remaining grant when you sell has to be paid back, plus under the new HPAS the house is sold back cheap to the government to pass on to the next first time buyer. They've made sure they're not losing too much.

[Roger Smelly]

Thanks for clearing that up dave, very intresting and glad to see they are not just throwing money away.

 

Most first timers are just looking for a roof over there heads so moving up the ladder is something for the future

[modey]

The goverment gave us a grant towards buying a first time buyers house but it wasn't explained to us at the time that if we EVER want to sell it on the goverment will able to claim 30% of the fee we sell it on for.

 

We got a grant of £13,000 and at current market value, if we sold it on we would have to give the goverment back £48,000.

 

Not a bad few years work for the goverment.

 

This being the case we will never be able to move up the ladder.

 

The first time buyers scheme was actually changed after this cock up but it doesn't really help the people who live on this particular esate.

You still get to keep 70% for yourself though, which should still make you a tidy profit - unlike those on the new HPAS that have to sell their homes back to the government at the current cheap fixed price. You are so very much better off through being on the old HPAS compared to those on the new system. What a cock up eh?

 

 

But those on the current scheme only have to sell thier home back to the goverment within a certain time frame, after that they can do what they want with it and only have to pay a percentage of the grant back to the goverment..

 

we will have to give the goverment 30% of the sale of our house whenever we sell it. I know which scheme i'd rather be on.

 

 

Its all very well making a profit, but we will never be able to buy a bigger house because the goverment have decided to make money from people on the "grant" scheme.

[Albert Tatlock]

But those on the current scheme only have to sell thier home back to the goverment within a certain time frame, after that they can do what they want with it and not pay anything back to the goverment.

 

we will have to give the goverment 30% of the sale of our house whenever we sell it. I know which scheme i'd rather be on.

 

 

Its all very well making a profit, but we will never be able to buy a bigger house because the goverment have decided to make money from people on the "grant" scheme.

If I were in that situation, I would consider that my 'human rights' were being affected by a 'distortion' in the grants system and I would be talking to my advocate. It would be also be intersting to hear the opinion of an advocate in regard to contract law - which in this case, IMO, is a loan with an excessive, and effectively unstated, amount of interest.

[modey]

There has been legal arguments over the first time buyers agreement regarding this estate for the past 4 years.

 

It doesn't seem to be getting anywhere at the moment though.

 

This is the reason t was changed but it doesnt really help us.

[BigDave]

But those on the current scheme only have to sell thier home back to the goverment within a certain time frame, after that they can do what they want with it and only have to pay a percentage of the grant back to the goverment..

That's 10 years. So at 10 years they'd have to repay 60% of the grant PLUS whatever top-up loan they had. But then they paid substantially more than the last purchasers on the old system did so don't get such a large leap with the market gains.

 

These figures might not be exact as they are from memory, but on the last of the old system sites a 3 bed semi was £85k, yet within a year a 3 bed semi on the new system was circa £125k. No top up loan existed on the old system, but up to 30% of the purchase price was available as a loan on the new system.

 

I was also under the impression (might be wrong here, don't know the finer details of the old system) that there was a time limit on payback for the old system, 20 years rings a bell, although I suppose 20 years is a bloody long time!!

 

At the risk of sounding critical, I can't understand how anyone can make a legal challenge against the system when they had all the terms and conditions in black and white to start with. Everyone must have signed something to say they understood and accepted them or how else could there be a legal contract?

 

I don't admit to knowing everything in minute detail about the HPAS, so If I'm way out on any of the above I do of course apologise. Those who are looking into the legal issues probably have a better understanding than I.

 

If I were in that situation, I would consider that my 'human rights' were being affected by a 'distortion' in the grants system and I would be talking to my advocate. It would be also be intersting to hear the opinion of an advocate in regard to contract law - which in this case, IMO, is a loan with an excessive, and effectively unstated, amount of interest.

What they were actually signing up for, albeit by the sounds of things unwittingly was a 70% ownership. The grant/loan legalities don't come into it.

[Slim]

It's 30% of the value, which can go up or down. The government doesn't automatically profit. Plus there's no interest involved so it's not actually that bad eh?

[modey]

It's 30% of the value, which can go up or down. The government doesn't automatically profit. Plus there's no interest involved so it's not actually that bad eh?

 

 

even if the house sold for £50,000 (very unlikely) the goverment would still get their money back with profit, so yes it is actually that bad. The goverment will profit.

 

I wasnt under the impression i was getting a loan which had to be paid back with interest if i ever decided to move.

 

The advocates should have clearly explained the grant system to us, which they didn't.

 

Most people on the estate were under the impression that after 5 years the goverment had no charge on the property but if we decided to sell on we would have to pay a % of the grant back.

[Slim]

even if the house sold for £50,000 (very unlikely) the goverment would still get their money back with profit, so yes it is actually that bad. The goverment will profit.

 

Only because the property price has risen above inflation. If it hadn't, they'd make a loss. If you'd borrowed the money, you'd have paid interest. I dont see the drama.

 

The advocates should have clearly explained the grant system to us, which they didn't.

 

Can't you read or something?

[modey]

Only because the property price has risen above inflation. If it hadn't, they'd make a loss. If you'd borrowed the money, you'd have paid interest. I dont see the drama.

 

 

Can't you read or something?

 

Thats the point though, i didn't borrow money it was a grant and i wouldnt have a problem paying that back but for them to make £32000 profit in 5 years is ridiculious

 

Nothing to do with the property price rising above inflation, the goverment were always going to make money out of the deal.

 

If we had sold it a week after we bought it at the price we paid we would have had to give them back £24,000 after being given a grant of £13,000.

 

The goverment are making thousands out of first time buyers, a nice little investment for them.

 

And yes i can read but when you go to collect your keys and are give the deeds which are the size of a phonebook, you are hardly going to go through them in detail, you trust your advocates to explain the implications which they didn't and funny enough as this came to a head the advocate in question was sacked..coincidence?

 

I and a lot of others trusted the goverment not to be ripping us off.

 

But it's not really worth trying to explain this to you, even though you have no idea about the facts of the case involving this estate, you seem to know it all already.

[Slim]

Nothing to do with the property price rising above inflation, the goverment were always going to make money out of the deal.

 

If the value of your property had dropped, the 30% might not have been worth the amount they originally loaned you, right?

 

If we had sold it a week after we bought it at the price we paid we would have had to give them back £24,000 after being given a grant of £13,000.

OK, well, that's a rip off alright! You signed up to this?

 

But it's not really worth trying to explain this to you, even though you have no idea about the facts of the case involving this estate, you seem to know it all already.

 

I know nothing about it, and I've never claimed too, I'm just pointing out that the value of a 30% stake in equity can go up as well as down.

[BigDave]

The goverment will profit

I severely doubt it. The houses on the old sceme were heavily subsidised. They cost the government a lot more than they sold them for, hence why you only bought 70% of it. The grant is an extra. The government are getting no more back that what they lost by subsidising the house in the first place.

 

This subsidy doesn't exist on the new scheme, hence the introduction of the top-up loan up to 30% (familiar figure?) of the purchase price on top of a grant. This is why a new scheme house is around £40-50k more expensive than on the old system.

 

Under both schemes the government gets their 30% back, just the new one is slightly clearer. There's more potential under the old system though for the buyers to make a bit of cash out of it.