Government FirstBuy scheme helps Bristol tenants get on housing ladder...but sadly not in Redland.

Hundreds of people in the South West have already benefitted from the Government's FirstBuy scheme, to help people get onto the housing ladder with a small deposit, but there's still plenty of money left in the pot! More info on the South West Homes website.

As someone who looks set to benefit from the scheme, I've been surprised by the lack of articles about it online. Basically, the deal is -the buyer needs to save five per cent of the house value as a deposit, the government then stumps up the money for 10 per cent, while the developer matches that – giving you a 25 per cent deposit. You then need a mortgage on just 75 per cent of the property's value. Simple. 

The money put forward by the developer and the government is made available to you as an equity loan, interest free for the first five years and then to be paid back within 25 years or whenever you sell the property, in which case it would be as 20 per cent of the property's value. It's kind of like shared ownership but not. The interest rate starts at 1.75 per cent and will only rise with inflation plus 1 per cent and you only have to pay the interest until the 25 years is up. 

Sounds good so far...but there are downsides. Firstly, you can only buy certain properties in certain developments under the scheme – and it's always new builds. So, if it's character you're after – bay windows, high ceilings, larger garden etc you're probably not going to be a fan of this scheme. Bovis Homes has cornered the Bristol market with this, with developments in Brislington, St George's, Filton and Horfield, but the houses are selling pretty fast (the scheme's been in place for almost a year now) and there aren't many houses left.

So the closest development to Redland is in Horfield, but you're looking at almost £240,000 for a small three bedroom town house - so even a five per cent deposit would be £12,000. Head further out to the 'up and coming' St George's and you'll get more for your buck, with a larger version of said town house on the market for just over £200,000. There are also apartments available, which start at about £130,000. What's more, if you seal the deal before the end of March then you won't have to pay any stamp duty - saving you a couple of grand, which could be used to cover the legal/valuation fees.

But is this too good to be true? A leg-up to the housing ladder with a very reasonable equity loan. Didn't they say the student loans were an excellent deal? I now owe more than I borrowed, as I've never earned enough to pay large chunks of it off. Some argue that you end up paying more than the property is worth for the privilege of being part of the scheme. Others worry that people will stretch themselves beyond their means and ultimately end up in negative equity; while cynics claim that the only benefactors are the developers who are shifting previously unsellable houses.

While I have my reservations, for me, someone who has been renting in Redland for almost five years, paying various other people's mortgages and having little to show for it other than being able to live in a small flat in a nice area and the freedom to move on at the drop of the hat, taking advantage of this scheme is a very attractive proposition. Without it, I'd be looking at at least another year or so before buying a house was in reach. It means that, for less than £100 more a month, I will effectively be paying a mortgage on my own 3-bed house, rather than renting a small 1-bed flat from a career landlord.

But it comes at a cost...I'll be leaving Redland :(