I recently published a video on my YouTube channel about the government's schemes supposedly designed to help people get on the property ladder. In the video, I take a look at these property investment schemes and give you my take on them as a multimillionaire property investor. I highly recommend watching the full video (above) until the end as it contains important information about these programmes that you need to know before you consider taking them up.
In this article, I will summarise exactly what is wrong with these schemes and why I wouldn’t go anywhere near them! However, there is one government property scheme that is actually really good. Keep reading until the end to find out which one it is and whether you qualify.
1. Help to Buy
The Help to Buy scheme is where the government helps you buy property by giving you most of your deposit, and you only have to put in five percent. So, in other words, if you're buying a house for £200,000, you're going to typically need about a 20% deposit, which is going to be £40,000. You can't afford that. So the government says you put five percent in, and they will match the difference.
This Help to Buy scheme sucks. Run a mile from it! It's riddled with red tape, flaws and clauses. And one of them is that you have to live in the property, so you can’t buy an investment property. Additionally, it only applies to new build properties. What happens when you buy a new build property? It drops 10% when you buy it. Why? Because when it's new and shiny, it's more expensive. So they're loaning you money to buy a new shiny house that you have to live in. That's a liability, not an asset!
2. Shared Ownership
Shared ownership also sucks! That's where you buy a house, but you only buy a part of the house, and you rent the other part. It's really difficult to get out of these schemes because you can't sell the house. How can you sell something where you only own part of it? What’s more, it's always leasehold properties, meaning you don’t even own the land once you buy the property outright!
3. Lifetime ISAs
I hate Lifetime ISAs. They suck. That's where you save up money to buy a house, and the government gives you 25% on top of what you've saved.
The first way it sucks is because you have to buy a house to live in. Again, everything points you towards the path that the government wants you to go on; which is go to school: be a good boy; get good grades; get a job; buy a house; work hard; pay off the mortgage; get a pension; and then retire at 67. If you climb to the top of that ladder, by the time you get to the top, you'll realize that you climbed the wrong ladder.
Also, you can't save more than five grand a year, so psychologically, it messes you up. If you only save using the Lifetime ISA you may be waiting 10+ years to buy a property, depending on the price of the house. This leaves you stuck in the meanwhile.
4. Right to Buy
Finally, Right to Buy. This is the only good one on the list! Right to Buy is something that was brought in by Margaret Thatcher. They're already abolishing it in parts of the UK. It's where if you've lived in a council house for a very long time, you have the right to buy it at a discount. This is a great thing. If you have the right to buy, get in and get in now!
Also, let's say you have the right to buy at a 30% discount, you can actually use the discount as the deposit! Not many people know this.
If you want to learn creative strategies on how you can become financially independent and successful without relying on the government, then join me at the Property Investors Crash Course. It's only £1, and it all starts with the Crash Course!