I bought a car last week – my first for three years – and how things have changed. Having only bought music by MP3 download since 2006, I’m now obliged to buy yet another attachment so the player transmits to the car radio.
Unable to use your mobile or consult a map, the trend is now a sat nav system, which is like taking my erratic and rather shouty pregnant sister-in-law everywhere – “bear right, keep right, now turn… left”.
Mostly, I’m surprised at the density of roadworks suddenly. Instead of daffodils, orange cones have sprouted around every roundabout in Berkshire.
The streets seem to have synchronised in an urgent need for resurfacing or water mains replacement. The urban myth says that it’s the time of year. Allegedly, councils have to use up their budget before April or they won’t be allocated as much next year.
A HomeBuy agent friend tells me that business is booming for a similar reason.
Evidently when a proportion of the annual funding allocated for shared ownership schemes is not taken up each year, it can be re-allocated to new applicants and preferably before the end of the financial year.
A trip to Communities.gov.uk and a search for open market HomeBuy agents lists them by location if you know disappointed buyers.
I’ve also rediscovered the radio while driving and I was surprised to hear an advertisement for Fairview, providing new-build properties in Bracknell for less than £100,000 with a 25% deposit.
It transpires that the scheme is an equity share. The 25% is interest-free and has to be repaid within 10 years calculated at the open market value at the time. If a property could double in value in 10 years, you have doubled the amount of money you owe them on sale, but your own equity, in this example, equals the mortgage you originally took so exceeds the debt.
For risk, borrowers would always need to save up for, or overpay the mortgage by 25% of the current purchase price, in case property values fell or did not increase. Over 10 years though, 25% of the property value is not unreasonable.
In this market I’d bag a load of cheap local first-time buyer leads from a lead generation firm and wow them with my local knowledge.
And even if they didn’t buy now, mothball them for later when lenders’ LTVs are better.
Of course these schemes don’t tackle the wider picture of getting the majority of lenders back to a position where they can lend at 90% LTV comfortably again – which I think could be helped by resurrecting mortgage indemnity guarantee if necessary.
But there is a lot to be said about knowing what is around you, whether it is an interesting first-time buyer incentive or yet another speed camera.