Brokers divided on Own New scheme

The cheese is placed in the mousetrap with this scheme. Big headlines and posters proclaiming "own this home from as little as £x a month" based on the largest deposit and discounts will no doubt generate interest and purchases from buyers who would be paying more per month for a secondhand property. However, this is a dangerous scheme in that buyers will get used to the lower payments and when that initial product ends they will be faced with a large increase in their payments. The slightly quicker reduction of the capital balance will unlikely put them in a lower loan-to-value banding to offset that increase. Ultimately, though, like the Help to Buy scheme that preceded it, this scheme will see developers just increasing their house prices leaving the potential buyers no better off at all, whilst also sacrificing the other incentives they would have been able to secure. This may be the best option for some buyers, but need to ensure they are fully aware of the risks.

The newly introduced Own New scheme will quickly become the talk of the town, capturing the attention of both first-time buyers and seasoned home-movers alike. Designed to stimulate sales of new homes, the scheme aims to offer attractive mortgages to potential buyers. It's a strategic move by house builders, who have been searching for innovative ways to invigorate their stock movement amidst challenging market conditions. Prospective buyers are advised to proceed with caution. New build property tends to be inflated in price, and its essential to negociate the price down where you can. Learning from the Help to Buy scheme, Own New buyers would also be wise to enter this scheme basing their ability to pay on open market rates, rather than the market dazzlers being presented to them. Own New will present exciting opportunities for some, but buyers need to make well informed decisions before entering into these transactions.

This is super inovation, which is greatly needed from the mortgage and housebuild sectors. It will definitely receive some well deserved headlines as it stands out proud from the far more risky and rumoured 1% deposit scheme. Although the two schemes would service a different buyer generally, it will certainly help to stimulate movement in the wider market, which will then trickle down to the first-time buyer.
For the naysayers, I would suspect that it has been priced into the property valuation, just as any developer discount would have been, so I guess it really depends how you want the incentive to be offered, a cheaper purchase price which will also help on stamp duty or the lower initial payments. The choice is yours, I guess. I would relish the chance to offer such a scheme, but will it be offered en masse for the broker market? Probably not.

This looks to be a great headline generator for the new build developers, and will have a natural appeal to those looking to buy. This has a feel of a rehashed Help to Buy scheme, an upfront incentive with benefits but may be deferring financial issues for another day. This doesn’t allow anyone to borrow more, just a discounted rate to start with, using an incentive budget on mortgage costs rather than having stamp duty paid or cheaper prices.

A new initiative from developers offers relief for first-time buyers and house movers amidst rising mortgage payments. Buyers should tread cautiously. While these new homes may seem enticing, they often come with a premium price. Opting for a non-new house could mean lower monthly payments due to the lower value of similar properties. Once the initial fixed-rate period ends, mortgage holders may face affordability challenges, mirroring the recent trend of rising mortgage payments. Even with a larger reduction in the mortgage balance, the premium paid initially could negate any significant savings. Buyers must consider potential hurdles like lack of equity and remortgaging complexities, akin to issues seen with Help To Buy. In light of these factors, while this initiative offers a glimmer of hope for buyers, it's essential to weigh the potential risks and benefits carefully before diving in.

The introduction of the Own New Rate Reducer scheme, while seemingly a boon with its lower mortgage rates for new-build homes, could be a Trojan Horse in reality, offering what appears to be a gift but one that may carry hidden consequences. The scheme's design may lead to inflated home prices as developers look to recoup the costs associated with the scheme. Additionally, the limitation of mortgage advice to a select group of intermediaries, potentially aligned more closely with developer and lender interests, raises questions about the impartiality of the advice given to buyers. As the initial favourable mortgage term ends, homeowners could face significant rate increases, a prospect that necessitates careful consideration of the long-term financial impact. Buyers are encouraged to conduct thorough due diligence to ensure that the scheme's short-term rewards do not lead to long-term financial strain. As the saying goes, "never look a gift horse in the mouth".

The first of the schemes designed to kick start the new build sector is here. Own New. As I read the details and analyse the scheme I can’t help wondering how many intermediaries were consulted. It seems once again little thought has gone into the product design and, by making it available on inflated new builds only, and mortgages through their chums, I can’t say I’m going to recommend them to my clients. Sorry. In a period of declining interest rates offering 40-year cost comparisons and discounts translated into lower rates doesn’t appeal when rates will fall regardless. I wonder how many properties will be downvalued by their own pet surveyors? Probably none. Now let’s see what’s the 1% deposit scheme can do to trump Own New. With Own New, it seems the risk is on you.

This scheme carries risks. Buyers may become accustomed to lower initial payments, but those payments will substantially increase after the introductory period. While the loan balance may decrease slightly faster, the savings probably won't be enough to secure a better loan-to-value ratio and lower interest rates. Like similar programs, this scheme could lead to developers inflating housing prices, negating any benefits for buyers and potentially eliminating access to other incentives. While this might be a suitable choice for some, buyers must fully understand the potential risks involved.

We're thrilled to see the Own New Rate Reducer scheme come to life, showcasing the industry's dedication to making home ownership more accessible and affordable. This collaboration is a significant step towards offering practical solutions in a challenging market. While it's an excellent option for many, it's also important to acknowledge that it won't suit every potential homeowner. There's a diversity of needs and financial situations, and it's essential for buyers to explore all avenues to find what truly fits their unique circumstances. What's commendable about this scheme is its responsible approach to lending. By calculating affordability based on a higher rate, while offering a lower actual rate, it strikes a balance between accessibility and ensuring long-term financial sustainability for borrowers. This thoughtful method reflects a commitment to not just facilitating home ownership but doing so in a way that upholds the financial well-being of customers.