HOW much do you pay in rent each month?
Six hundred pounds? Seven hundred? More?
Want to cut that figure in half?
At the Maine Place development on the site of Manchester City’s old ground in Moss Side you can buy a two bedroom apartment with balcony and car parking for £320 a month.
So if you rented out the second bedroom (they are roughly the same size) you could be living a cab ride from the city centre for £160 a month. Less than fifty quid a week!
Here’s the plan.
The Government’s FirstBuy scheme is available at Maine Place allowing first time buyers earning less than £60,000 to buy an 80% stake in a property with the developer and the state making up the other 20%.
You have to be able to raise a deposit of 5% which is about £4,300 and qualify for a mortgage which the developer, Warrington based Prospect Homes, works out at £320 a month.
The 20% equity loan is interest free for five years after which a sliding scale of charges kicks in.
But you should have an exit strategy in place before then.
So, even if you don’t rent out a room you could be saving upwards of £300 each month on rent. That’s £3,600 a year, £18,000 over five years. Even squandering a couple of grand in Ibiza you can build up quite a nest egg.
When you come to sell you have to pay back the same percentage of equity loan. Not the same amount of money, just the same percentage.
Impossible to predict what the property market will be like in five years but looking on the gloomy side if the property you bought for £100,000 is only worth £80,000 you would pay back £16,000 not £20,000. You would still have to pay off the mortgage though and you have to pay all the legal fees.
On the optimistic side the market could have stayed level or increased and you sell, pay back your dues and walk away with some savings in your pocket.
There’s a good explanation of FirstBuy and some cost examples here.
And hopefully in five years time the whole development will have been completed and landscaped and the roads finished, including Blue Moon Way which sweeps in front of the apartments, being coloured blue.
Not quite sure if this will add to or detract from values but it adds a bit of fun for the kids at the school next door.
Construction work on site has actually been halted while sales catch up and the plans re-drawn to include more houses instead of a second block of apartments.
This is good for apartment owners.
But it’s a shame that the good looking block currently looks out onto a prominent central area now ringed with steel fencing.
The Government, the city council and the developers have spent so much here already it seems false economy to halt now when the bits they have finished look so good. If they could find the money to complete the scheme, say if they had some pension fund cash lying around for instance, then it would protect and increase their investment.
Worth considering though if you are fed up of renting and cannot see a way of saving without heading back home. More information click here.