FIGGY

New Buy - Going Down The Pan Already

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http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9172348/NewBuy-mortage-scheme-in-crisis-as-lenders-fail-to-support-it-claims-Home-Builders-Federation.html

The NewBuy Guarantee, launched by David Cameron in a blaze of publicity, is "not at all what was envisaged", the head of the Home Builders Federation (HBF) said.

Lenders have not embraced the scheme as was intended, the HBF's executive chairman Stewart Baseley wrote in a letter to home builders, acknowledging this is "incredibly frustrating and annoying".

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Together with the unexpectedly bad (meaning good!) Nationwide figures this is turning out to be a rather good day :)

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I think the more the govt promote / spin idea clearly the bigger failure it will be?

It's Labour all over again just making big announcements and hope people forget what was announced.

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Talk about having your cake and trying to eat it. Builders tailor-make a plan which primarily helps themselves, then wonder why the response from others is lukewarm(that's VAT free btw).

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one respondant comments:

"The majority (our public) have the majority of their accumulated equity tied up in property. If this is not supported then what happens? A long term depression where confidence,consumption and investment head downhill which benefits who?"

I cant be bothered to set up an account, but my question to him would be....When ever did EQUITY tied up EVER support the spending economy?

The only thing it supports is lending...it is a security...and it seems that supporting it with new borrowers is the aim of the PTB...this is the very definition of PONZI...and ALL Ponzis bust sooner or later.

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one respondant comments:

"The majority (our public) have the majority of their accumulated equity tied up in property. If this is not supported then what happens? A long term depression where confidence,consumption and investment head downhill which benefits who?"

I cant be bothered to set up an account, but my question to him would be....When ever did EQUITY tied up EVER support the spending economy?

The only thing it supports is lending...it is a security...and it seems that supporting it with new borrowers is the aim of the PTB...this is the very definition of PONZI...and ALL Ponzis bust sooner or later.

I think many people have serious cognitive dissonance when it comes to MEW. They think the money they are spending came from the house, as if fivers started sliding out from between the bricks, when of course the money came from the lender who added it onto the mortgage.

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one respondant comments:

"The majority (our public) have the majority of their accumulated equity tied up in property. If this is not supported then what happens? A long term depression where confidence,consumption and investment head downhill which benefits who?"

I cant be bothered to set up an account, but my question to him would be....When ever did EQUITY tied up EVER support the spending economy?

The only thing it supports is lending...it is a security...and it seems that supporting it with new borrowers is the aim of the PTB...this is the very definition of PONZI...and ALL Ponzis bust sooner or later.

I only have a small part of my accumulated equity tied up in property and none of that property is a house, or even a flat :D.

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one respondant comments:

"The majority (our public) have the majority of their accumulated equity tied up in property. If this is not supported then what happens? A long term depression where confidence,consumption and investment head downhill which benefits who?"

I cant be bothered to set up an account, but my question to him would be....When ever did EQUITY tied up EVER support the spending economy?

The only thing it supports is lending...it is a security...and it seems that supporting it with new borrowers is the aim of the PTB...this is the very definition of PONZI...and ALL Ponzis bust sooner or later.

Where have you been? It supports mortgage equity release which supports spending. Just ask the B of E. Their whole economic policy is (de)based on it.

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Lenders have not embraced the scheme as was intended

That sentence can be read in two ways. ;) I think it should be punctuated with a comma before as.

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Tends to happen with Policy when the coffers are empty. The doubting hpc-ers should remember this – the props are creaking with every month......and we are only 12% of the cuts into what is needed to JUST get to zero on our deficit, let alone pay the debt down. Perspective people.

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Really pleased this isn't working out - it never added up or made any sense to me.

The builders have already hiked up their prices by 20-30% over current market prices anyway, so most buyers are buying into substantial amounts of negative equity from the off - why would the banks buy into this when the insurance scheme is only going to pay out a fraction of this if the borrower defaults.

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Really pleased this isn't working out - it never added up or made any sense to me.

The builders have already hiked up their prices by 20-30% over current market prices anyway, so most buyers are buying into substantial amounts of negative equity from the off - why would the banks buy into this when the insurance scheme is only going to pay out a fraction of this if the borrower defaults.

In theory it's 14% risk averted for banks 5% FTB, 3.5% builder indemnity and 5.5% government indemnity

http://www.communities.gov.uk/housing/homeownership/newbuy/newbuyglance/

So £86k risk per £100k loaned

However if the builder puts their 3.5% on to the price it's only 11% risk averted. It has to be disappointing for bankers when the council firstbuy scheme averts 25% for them.

Maybe the bankers are not favouring smaller builders as much because if things go wrong with the larger ones they have better landbanks and the can always take equity as part payment for failing loans?

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Not all that it was cracked up to be then?

The Government’s much-vaunted NewBuy scheme, intended to help first-time buyers and others purchase new homes with a taxpayer-backed 95% mortgage, is in disarray.

The claim has come from the head of the Home Builders Federation, Stewart Baseley.

He said there was a ‘far from satisfactory’ launch earlier this month, when only three lenders were ready with mortgage products to support the scheme. Although some lenders, including Santander and Halifax, said they hoped to launch products soon, others said they wanted no part in the scheme.

The HBF has revealed it has been in crisis talks with the Council of Mortgage Lenders.

Not all developers are participating in the scheme, but the HBF says it handed over to the CML a list of 130 builders that had flagged up their interest: it claimed that few have so far been contacted by any lenders.

Baseley said that officials at the Treasury “will make urgent contact with the lenders at senior level to establish their intentions and to impress upon each of them the need to implement NewBuy as a matter of priority”.

The Government launched NewBuy saying it would help 100,000 first-time buyers on to the housing ladder. The scheme also helps other home movers with only small deposits, who can buy new homes with a value of up to £500,000.

But the scheme has always had its critics, who say that buying a new property with only a 5% deposit means purchasers run the risk of negative equity, even if house prices only turn down fractionally.

Yesterday, Nationwide reported that house prices in March dipped 1%.

http://www.estateagenttoday.co.uk/news_features/NewBuy-mortgage-scheme-in-crisis#comments

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Yet another headline grabbing half baked damp squib! utterly predictable but hopefully a few FTB will be saved I suppose.

Only surprise is the speed at which it's unravelling, normally you expect things to go quiet where we're all supposed to believe its working fine for a year or so, maybe exceptionally these hair brained schemes are found to have failed in 6 months - but this one is coming apart at the seams within a few short weeks, after never having actually started! . Pathetic.

It's pretty obvious why the banks what more than a 5% deposit plus some vague promises the gubbermint 'would potentially probably maybe make up all or maybe some of the deficit on these mortgages in the impossible and unthinkable and completely unpredictable event house prices should experience (ahem) negative growth (cough.)'.

Seems to me that if this incompetence continues much longer the coalition will look increasingly untenable, 2015 is quite long time to hold the country together with sticky tape and bits of old string.

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I think the Government are finding out, rather late, what a "free market" is, and they don't like it! :unsure:

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In theory it's 14% risk averted for banks 5% FTB, 3.5% builder indemnity and 5.5% government indemnity

http://www.communiti...y/newbuyglance/

So £86k risk per £100k loaned

However if the builder puts their 3.5% on to the price it's only 11% risk averted. It has to be disappointing for bankers when the council firstbuy scheme averts 25% for them.

Maybe the bankers are not favouring smaller builders as much because if things go wrong with the larger ones they have better landbanks and the can always take equity as part payment for failing loans?

I think you'll find that these days, every single site is a separate limited company.

That way, the builders argue, the entire company is not destroyed by downturns affecting individual sites.

Or, I would argue, it is another case of the limited liability laws being misused - so that profits can be extracted and losses taken by someone else.

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I think many people have serious cognitive dissonance when it comes to MEW. They think the money they are spending came from the house, as if fivers started sliding out from between the bricks, when of course the money came from the lender who added it onto the mortgage.

I likes it!

Kind of creepy ...

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I only have a small part of my accumulated equity tied up in property and none of that property is a house, or even a flat :D.

Thanks for that bit of info 5ycDU.gif

Is there anyway on this forum to put people on ignore? I reckon I've read about BB savings pot about 200 times. vej7j.gif

Edited by beccles

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Thanks for that bit of info 5ycDU.gif

Is there anyway on this forum to put people on ignore? I reckon I've read about BB savings pot about 200 times. vej7j.gif

You are exaggerating, more like 500. Have some compassion though, because must be difficult to have loads of money whilst remaining so modest all the time.

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Thanks for that bit of info 5ycDU.gif

Is there anyway on this forum to put people on ignore? I reckon I've read about BB savings pot about 200 times. vej7j.gif

+1MM

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There's a planned site for a bunch of new houses near me. 5 bed detached asking price £275k on rightmove. None built yet.

But propertyBee shows one sold in 2009 for £200k I wonder why no-one is interested at the new price and if they'll ever get built...

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Here is Stewart Baseley's letter to Home Builders Federation in full.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9172456/NewBuy-Home-Builders-Federation-executive-chairman-Stewart-Baseleys-letter.html

New Buy ?

Clicking on the large banner which appears on the Rightmove main page much of the time, their schemes are called FirstBuy (government scheme) and HomeBuy (UK Government). Now this New Buy.

first-buy.png

homebuy-logo.png

They don't seem able to decide what to call it. They probably don't care. Just baffle mug first time buyers with jargony confusing schemes to make it look like you're helping them, whilst all the time helping the building buddies.

There's a map of the UK with regions these homes are in. Most of them look very unappealing. Jon Snow is right we need lots of new building, but not homes like these, nor through schemes where land and the build is a lot more expensive for the buyer because these 'buying help' schemes exist.

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Here is Stewart Baseley's letter to Home Builders Federation in full.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9172456/NewBuy-Home-Builders-Federation-executive-chairman-Stewart-Baseleys-letter.html

New Buy ?

Clicking on the large banner which appears on the Rightmove main page much of the time, their schemes are called FirstBuy (government scheme) and HomeBuy (UK Government). Now this New Buy.

first-buy.png

homebuy-logo.png

They don't seem able to decide what to call it. They probably don't care. Just baffle mug first time buyers with jargony confusing schemes to make it look like you're helping them, whilst all the time helping the building buddies.

There's a map of the UK with regions these homes are in. Most of them look very unappealing. Jon Snow is right we need lots of new building, but not homes like these, nor through schemes where land and the build is a lot more expensive for the buyer because these 'buying help' schemes exist.

New Buy

First Buy

Home Buy.

I've got a name for a scheme:

Don't ******ing Buy (Rent Instead)

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