Own Home Scheme Pros and Cons

A question about : Own Home Scheme Pros and Cons

Hi all,

We recently signed up to the Own home scheme for first time buyers
https://www.ownhome.co.uk/faq.htm

Our interview date is looming and we are in a good position to buy.
All I want to know is Own home a good scheme, I really can't see any
disadvantages to using the scheme. Are there any cons or is this a
fantastic offer?

Also why hasn't Martin mentioned it on the site?

any advice/opinions greatly appreciated.

Best answers:

• Hi
  We are signed up too - our interview is in September. I think obviously there are disadvantages to using the scheme rather than buying without it - the main one being that if they lend you 40% of the property price you have to pay them back 40% when you sell so they therefore get part of the increase in value. Also the fact that after the first 5 years you have to start paying making interest payments monthly. But to be honest though the ownhome scheme is for people who are not in a position to be able to buy on their own without the help, so for them it is worth doing. If you are in the position to be able to save up and buy without using the scheme then that would be better, but if (like us) there's not a hope in hell of being able to do that then its the best option. It enables people to get a foot on the ladder when they wouldn't be able to normally and even though ownhome takes a percentage of the profit - there is still at least 60% of the profit to go to us! I've been trying to find info about people who have used the scheme and actually bought to see how their experience was but can't find any. I've seen people who are part way through the process though.
  I'm just hoping that we qualify and that there's enough funding left for us! We meet the criteria as we are first time buyers earning less than 60k and are on the council waiting list. But I don't know whether they give preference to keyworkers? Also with the mychoice funding running out I'm guessing ownhome won't be too far behind. Fingers crossed though!
  SJ x
• It involves buying a rapidly depreciating asset.
  Therefore it is a f****ng awful idea.
  In fact it rates up their with Abe Lincoln saying to his wife "I'm bored of sitting around the house, lets go see a show!"
  Any FTB buying a house now, even a portion of a house, is basically saying "I know, lets destroy our lives forever."
• Hi,
  We have registered for this just this week and got told there was a waiting list but given no indication at all of how long we could expect to wait before being called back for our interview. Can anyone who has done this let me know how long they had to wait - and also their general experiences with this scheme.
  Thanks!
• you will regret this decision....do a search on here and you will find out...buying a assett at top price that is losing 2k a month is not sensible....use the search button..you will find you will have made the biggest mistake of your lives if you do it...
• but the asset is not at top price - that's the point - house prices have dropped substantially in the last year - just that it is hard to borrow the money so the property is worth less now but in time, after the credit crunch has passed property prices will rise again.
• what if you want to trade up when you sell? you are going to need LOTS of ЈЈЈ to cover the money you have to pay back.
• Dodgy scheme.
• I signed up for the scheme last year and had my interview and got accepted. I didn't end up using the scheme in the end as the house I wanted to buy was 3 bed and I was restricted to 2 bed on the scheme. I did a fair amount of investigation into the scheme and it looked like a very good idea ESPECIALLY during the current climate.
  The reason for this is that by sharing the ownership you are essentially sharing the risk, in a falling housing market the you'd lose less money if you find you want to sell before the house price has recovered. This is because after 5 years, you buy them out at the current market value not the value at which you bought it even if this is less. In this case, you'd essentially had 40% of your mortgage payments paid for you for free!
  I recommend this scheme above buying out right. However I agree that buying in a falling market is an inherently risking thing to do. If you plan on staying there long term, no worries house prices will recover eventually, the big question is when. Don't believe anyone acts like they know when this will be, either short or long term!
• Buying on a scheme defers the problem. If people are aware then fine, but few I think fully appreciate the problems they are storing up for themselves....
• My daughter and fiance have been turned down for this because they apparently earn 'too much' money!!
• Not at top price? This is true, but it seems that its also not at the bottom...Are you in a rush to move? Can you hold off 6-12 months if necessary? The Јxxxx that you save on the asking price could help pay a deposit and/or reduce the loan that you'll need to top your mortage up.
  Another thing to consider is that with Ownhome, you are tied into using The Co-operative banks mortgages. Have you considered the scheme MyChoice Homebuy? As with the Ownhome scheme, you can choose a house on the open market but they also let you pick your own mortage lender, and do not limit you to just one provider as with the Ownhome.
  Its been mentioned on several other threads that these schemes are the goverments way of keeping house prices artificially high. Remember they will make their % from you somewhere along the line, but if you feel its the right choice for you, go for it and good luck! Be sure to keep us updated on your progress
• This is the sort of scheme we are looking at as well, assessing all our options. We have seen an IFA about it, and generally it was recommended only if we couldnt find extra deposit, but it was recommended over VGD's (VendorGiftedDeposits, only available at Halifax nowadays). I expressely said that I would not want more than 25% share going to the HomeBuy/OwnHome schemes, its just too big a portion of equity
• Thanks Big Simmo for letting me know - I called back last week and they said it would be a godo few weeks and you are obviously well ahead of us...I think they are just fobbing us off - hopefully will get called back.
  Thanks for everyone's views on this (the helpful ones that is!) We have also registered for the MyChoiceHomeBuy scheme. Obviously the ideal is to buy outright and not use a scheme but with LTV being so restricted we cannot realistically raise a Ј20,000 + deposit so this is our only option really. And yes I appreciate people saying prices may drop more in 6-12 months - but in that time we have paid another Ј10000 in rent....it all balances out.
  I hope we get somewhere with either of these schemes as I do think they are valuable - and good luck to other people trying too.
• Hi
  Just to let you know that we bought our house in this scheme (I actually answered this thread a while ago while we were waiting for our phone interview). We waited about a month for our phone call, and from then on it went really smoothly. We got accepted, got given a reference number and then called the co-op and got accepted for the mortgage. Ownhome and the co-op were both great and our house purchase went through very smoothly and very quickly. There were no problems at all. Of course it would have been better to buy by ourselves but we just couldn't do it, so for us this was the best option. We are all settled in our new house now and couldn't be happier! Plus a few weeks after we moved, ownhome wrote to us saying they had been given some extra money and were giving grants to people who had completed their house purchase within a certain time - and promptly sent us a cheque for Ј1500! That was an extra surprise! Don't suppose they will still be doing that now though.
  Anyway just wanted to let you know that they will call you back, and if you go ahead with it then it can go through nice and easily!
  SJ x
• Maseillo - well done on getting the Ј1500 - i called them up after seeing you post that on another thread as i think before this we both thought we had missed out on this. I missed out by 5 days in the end!! I remember you saying you completed about 28th November is that right? I completed 5th December and was told the grants were given up to 30th November ! So close - could have done with the extra money of course! But pleased for you that you got it!
• Problem with this scheme is the coop, their mortgages are !!!!, totaly crap and totally ripping the people off who are trying to be helped by this scheme.
  5-6.5% fixed rates with a base rate of 1.5 which is due to fall to near Zero!
  4.5 fixed with nearly Ј1700 fees to pay!!!!
  this is whats called day light robbery! - totally taking advantage of the customers who are wanting to benefit from the scheme.
  why you must have a Coop mortgage is beyond me.