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Topher Bear

The Hpc Politically Acceptable Solution

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We're intelligent chaps here. We saw the housing bubble for what it was, although no one believed us at the time. Those in charge have now realised that we were right all along so have come to us for a solution to the crises.

Our task is to work out how we can realistically help ftb's buy houses without also helping out btl etc, without having house prices fall in actual terms (political suicide as well as damaging the economy and thousands of lifes) and without pumping money into the system causing another house price bubble.

It's a tough ask, I know. Hoping that maybe we can come up with a realistic answer that politicians may actually listen to!

Here are my first Thoughts.

Most ftb are limited by size of deposit. In my position I don't want to borrow so much that repayments cripple my finances, and finally right now. The final thing stopping me buying is a potential fall in the value of the property.

On the face of it shared ownership might be the answer, but this limits the properties I can buy, only new build mouse holes, and puts impossible restrictions on resale.

My solution is a form of shared ownership. I buy say a 50% or 75% share, my deposit covers the 10% of my share (ie 5% of property value) the rest of the money is put up by the government with no rent/interest to pay, repayable on sale of house. We choose any house we like and are free to accept any offer we like on the property. When we do sell we repay the government exactly what we borrowed if prices have risen and an amount less in proportion to national house price indeces if prices fall. Ie we see benefit if prices rise, but government see loss if prices fall.

Such a scheme would only be open to ftb's and who's savings are below, say , £100k.

This might tick all the boxes!

Any other ideas? Thoughts?

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We're intelligent chaps here. We saw the housing bubble for what it was, although no one believed us at the time. Those in charge have now realised that we were right all along so have come to us for a solution to the crises.

Our task is to work out how we can realistically help ftb's buy houses without also helping out btl etc, without having house prices fall in actual terms (political suicide as well as damaging the economy and thousands of lifes) and without pumping money into the system causing another house price bubble.

It's a tough ask, I know. Hoping that maybe we can come up with a realistic answer that politicians may actually listen to!

Here are my first Thoughts.

Most ftb are limited by size of deposit. In my position I don't want to borrow so much that repayments cripple my finances, and finally right now. The final thing stopping me buying is a potential fall in the value of the property.

On the face of it shared ownership might be the answer, but this limits the properties I can buy, only new build mouse holes, and puts impossible restrictions on resale.

My solution is a form of shared ownership. I buy say a 50% or 75% share, my deposit covers the 10% of my share (ie 5% of property value) the rest of the money is put up by the government with no rent/interest to pay, repayable on sale of house. We choose any house we like and are free to accept any offer we like on the property. When we do sell we repay the government exactly what we borrowed if prices have risen and an amount less in proportion to national house price indeces if prices fall. Ie we see benefit if prices rise, but government see loss if prices fall.

Such a scheme would only be open to ftb's and who's savings are below, say , £100k.

This might tick all the boxes!

Any other ideas? Thoughts?

yes,halt tax breaks on Business mortgages on Private Residential Property.

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BTL is a gamble and if it hasn't paid off for an individual then it is a bad investment. It certainly has paid off for hundreds of investors in the past. But just because a horse has won all of it's first 9 races doesn't mean that it will win the 10th.

My solution would be to let the market correct itself. This would help FTBs.

The OP solution could be modified to help out current home owners caught in negative equity or unable to afford repayments,

BTL made more prohibitive for the future.

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We're intelligent chaps here. We saw the housing bubble for what it was, although no one believed us at the time. Those in charge have now realised that we were right all along so have come to us for a solution to the crises.

Better tenant's rights - makes BTL less attractive whilst improving the lives of those who rent. Let everything else sort itself out. Oh, and the only tax relief available on BTL would be on money specifically spent on the property. No tax relief on the mortgage payments.

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We're intelligent chaps here. We saw the housing bubble for what it was, although no one believed us at the time. Those in charge have now realised that we were right all along so have come to us for a solution to the crises.

Remind me when that happened exactly?

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We're intelligent chaps here. We saw the housing bubble for what it was, although no one believed us at the time. Those in charge have now realised that we were right all along so have come to us for a solution to the crises.

Our task is to work out how we can realistically help ftb's buy houses without also helping out btl etc, without having house prices fall in actual terms (political suicide as well as damaging the economy and thousands of lifes) and without pumping money into the system causing another house price bubble.

It's a tough ask, I know. Hoping that maybe we can come up with a realistic answer that politicians may actually listen to!

Here are my first Thoughts.

Most ftb are limited by size of deposit. In my position I don't want to borrow so much that repayments cripple my finances, and finally right now. The final thing stopping me buying is a potential fall in the value of the property.

On the face of it shared ownership might be the answer, but this limits the properties I can buy, only new build mouse holes, and puts impossible restrictions on resale.

My solution is a form of shared ownership. I buy say a 50% or 75% share, my deposit covers the 10% of my share (ie 5% of property value) the rest of the money is put up by the government with no rent/interest to pay, repayable on sale of house. We choose any house we like and are free to accept any offer we like on the property. When we do sell we repay the government exactly what we borrowed if prices have risen and an amount less in proportion to national house price indeces if prices fall. Ie we see benefit if prices rise, but government see loss if prices fall.

Such a scheme would only be open to ftb's and who's savings are below, say , £100k.

This might tick all the boxes!

Any other ideas? Thoughts?

Why not just let house prices fall to a level where people can afford to buy them?

Your plan just tries to keep the bubble inflated for longer with the taxpayer taking the downside risk and the borrower keeping the upside potential.

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The OP is correct that we should start to advocate ways in which the hpc is played out. However, I can only see part-buy / part-rent as a support for high prices.

The govt should put pressure on lenders to lend to those in negative equity and a campaign to make people see the folly of borrowing too much. People need to understand that buying a house for £200k means they have to repay that £200k whether the house value climbs to £300k or falls to £140k.

Also, we should get rid of the one size fits all approach of low interest rates. This benefits the highly leveraged to the detriment of the prudent savers and the mortgage free have a nice unearned equity gain.

The only govt interferance should be putting lenders under duress to allow mortgage holders to port negative equity and not to sting them too hard because lower prices mean lower ltvs. (ie The banks have to shoulder their side of the blame as well)

Apart from that, taxes to make BTL less attractive.

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Whack IRs up to 5%, have a p1ss awful 18 months that will convince people for the coming decades not to speculate on property. As money that was propping up HPs gets lent instead to business, watch the UK's economy rebound and rebalance.

Alternatively, try to keep the bubble inflated, watch Greece and Ireland grow faster than the UK from 2013 onwards and invite the Japanese over to tell us how to lose a decade or two.

Edited by rantnrave

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We know that ultimately they should'nt be trying to keep prices high, but that is what they want, what the people want. My question was: is there a way to do that yet still enable ftb to get a house without crippling them financially and also without stoking the bubble up again.

For this topic falling prices are out of the question!

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First off, loans of no more than 3x single earnings, 2.5x joint.

Secondly, allow house prices to fall to levels that work with point one.

Thirdly, shared ownership to existing owner occupiers that find themselves in negative equity. Or some kind of cheap government loan repayable on death/when they can. This will allow them to get on with their lives and move house if they want.

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We're intelligent chaps here. We saw the housing bubble for what it was, although no one believed us at the time. Those in charge have now realised that we were right all along so have come to us for a solution to the crises.

Our task is to work out how we can realistically help ftb's buy houses without also helping out btl etc, without having house prices fall in actual terms (political suicide as well as damaging the economy and thousands of lifes) and without pumping money into the system causing another house price bubble.

It's a tough ask, I know. Hoping that maybe we can come up with a realistic answer that politicians may actually listen to!

Here are my first Thoughts.

Most ftb are limited by size of deposit. In my position I don't want to borrow so much that repayments cripple my finances, and finally right now. The final thing stopping me buying is a potential fall in the value of the property.

On the face of it shared ownership might be the answer, but this limits the properties I can buy, only new build mouse holes, and puts impossible restrictions on resale.

My solution is a form of shared ownership. I buy say a 50% or 75% share, my deposit covers the 10% of my share (ie 5% of property value) the rest of the money is put up by the government with no rent/interest to pay, repayable on sale of house. We choose any house we like and are free to accept any offer we like on the property. When we do sell we repay the government exactly what we borrowed if prices have risen and an amount less in proportion to national house price indeces if prices fall. Ie we see benefit if prices rise, but government see loss if prices fall.

Such a scheme would only be open to ftb's and who's savings are below, say , £100k.

This might tick all the boxes!

Any other ideas? Thoughts?

Topher bear,

When you got to that bit about the government putting some in, you lost the plot.

Any solution that involves taxpayers money should be placed in the bin.

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First off, loans of no more than 3x single earnings, 2.5x joint.

Secondly, allow house prices to fall to levels that work with point one.

Thirdly, shared ownership to existing owner occupiers that find themselves in negative equity. Or some kind of cheap government loan repayable on death/when they can. This will allow them to get on with their lives and move house if they want.

Why worry about negative equity?

If they repay, great. If they don't, repossess.

Why the desire to interfere?

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Why worry about negative equity?

If they repay, great. If they don't, repossess.

Why the desire to interfere?

I agree, but if I was the housing minister for example and it was my job to interfere i think giving help to the poor sods that bought a home in the last few years is better than some crappy idea for FTBers.

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Any other ideas? Thoughts?

Yeah, you are asking the wrong question. Stop interfering with the sodding market and let the ******ing thing burn. The problem is too many well intentioned idiots with their best laid plans giving unintended consequences. If you make the banks face the consequences of their actions and, just as importantly, make it well known to Joe Public that there are no govt guarantees anymore so they'd better be damn sure their money is safe, then the banks will take risk into account. They will be more prudent and the market will become sustainable. The problem is things have gone far too far and I accept that the current guarantees are perhaps necessary to prevent total collapse. But ideally, you'd use the Hayek/Austrian solution - the problem is too much govt interference not too little, and the problem is always the boom not the bust.

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We're intelligent chaps here. We saw the housing bubble for what it was, although no one believed us at the time. Those in charge have now realised that we were right all along so have come to us for a solution to the crises.

Our task is to work out how we can realistically help ftb's buy houses without also helping out btl etc, without having house prices fall in actual terms (political suicide as well as damaging the economy and thousands of lifes) and without pumping money into the system causing another house price bubble.

It's a tough ask, I know. Hoping that maybe we can come up with a realistic answer that politicians may actually listen to!

Here are my first Thoughts.

Most ftb are limited by size of deposit. In my position I don't want to borrow so much that repayments cripple my finances, and finally right now. The final thing stopping me buying is a potential fall in the value of the property.

On the face of it shared ownership might be the answer, but this limits the properties I can buy, only new build mouse holes, and puts impossible restrictions on resale.

My solution is a form of shared ownership. I buy say a 50% or 75% share, my deposit covers the 10% of my share (ie 5% of property value) the rest of the money is put up by the government with no rent/interest to pay, repayable on sale of house. We choose any house we like and are free to accept any offer we like on the property. When we do sell we repay the government exactly what we borrowed if prices have risen and an amount less in proportion to national house price indeces if prices fall. Ie we see benefit if prices rise, but government see loss if prices fall.

Such a scheme would only be open to ftb's and who's savings are below, say , £100k.

This might tick all the boxes!

Any other ideas? Thoughts?

I think you more or less quoted the governments latest hair brained scheme designed to keep house prices as high as possible, Homebuy Direct. Basically an interest free loan of 30% of the 'market value' :lol::lol::lol: of the house for 5 years.

http://www.homebuy.co.uk/homebuy_direct.aspx

What is HomeBuy Direct?

This option offers equity loans towards the purchase of a new build home on selected developments.

How does it work?

You buy a minimum of 70% of the market value of a property. An equity loan of up to 30% is provided to assist your purchase. There are no payments on the loan for the first five years. After five years there is a fee of 1.75%, which increases annually in line with inflation. You will need to raise a mortgage to purchase through this scheme. You can also use any savings you may have to contribute as a deposit towards your share.

What are my options after buying through HomeBuy Direct?

You can buy additional shares at a later date until you own 100%. This is calculated on the current market value at the time that you purchase the additional shares. If you wish to sell your property, the equity loan is repaid as a percentage of the market value at the time of sale.

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Sorry, can't agree with that one. Just a new way to funnel more fuel into the market. Quickly a 50% share would cost as much as a 100% share presently.

Here's my idea.

Government lends money to local authorities at interest (best rates) to expand at cost council housing, in the process saving us taxpayers huge amounts of money presently paid to private landlords.

Market rents drop significantly, followed by house prices in a sustainable crash.

Yes, crash. Can't make an omlette and all that.

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In relation to housing:

Put in place a maximum lending limit such as 3x the main income. No more than one income to be allowed to be taken into account.

Then to avoid Landlords outcompeting FTB's as house prices fall, remove all their tax advantages ie. do not allow any financing costs to be offset against the revenue. Maintenance excepted.

Have a register of Landlords so that the Inland Revenue can keep a track of them and that standards are maintained.

Put in place better leases to encourage long term viability of renting for young families.

Change the charter of 'building societies' so they cannot lend against existing property. They can only lend against new property. This would encourage building.

Do something with the planning laws and reduce population numbers.

Focus on quality of build (tough regs here relating to size too) with minimum expected lifespan of construction life.

Much better than the OP suggestion which is absolutey dreadful. Shared ownership should be banned it is propping prices up - as to the government subsidising FTBs all that will do is push prices up and mean taxpayers stand behind losses.

It's not enough to remove BTL tax breaks we need to do something to make it completely unattractive, if not banned completely and current portfolios forceably dispersed perhaps by compulsory purchases by councils if they aren't sold by 31/3/2012

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the absolute answer to everything is the following......

every tennant of every property, domestic AND commercial, has the legal right, once a year, to purchase outright the property they rent for ten times the annual rent paid in the

previous year

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the absolute answer to everything is the following......

every tennant of every property, domestic AND commercial, has the legal right, once a year, to purchase outright the property they rent for ten times the annual rent paid in the

previous year

You need an additional clause that grants the most recent tenant the right to purchase at the most recent rent paid for vacant property otherwise the hoarding of vacant properties will just get worse driving rents higher.

In very general terms, houses are trading at about 20x annual rents. Your 10x rule realigns values with rents and hence incomes rather than with credit.

I like it.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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