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First-Time Buyers Get Council Boost


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This scheme is being launched nationally in the UK in the next few weeks by a major High Street Bank. Many other Councils are ready to follow suit

If this scheme is going to be wheeled across the UK will it have any real effect?

Does 40 FTPS x no. councils -> a significant change to push the indices higher?

Anyone ?

Edited by swankyman
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This is what I wrote to the Chief Executive:

Tue, March 15, 2011 5:11:45 PM

Irresponsible transfer of tax payers money to property developers

...

From:

XXXX

...

View Contact

To: [email protected]

Dear Sir,

I read with bemusement an article in the Scotsman ("First-time buyers get council boost" dated 10th March 2011) that your council plan to "pay deposits of first-time buyers" to the tune of £1 million.

While you may believe that it will help the priced-out first time buyer, perhaps you could step back and realise that the only ones who benefit are the homebuilders.

I presume that only new builds will be included in this scheme, along the lines of "Shared Equity."

Perhaps, if you allowed the market to correct itself naturally - allowing house prices to fall to sustainable levels - then you would not only first time buyers the indignity of being hood-winked into debt slavery, you would also save tax-payers money.

I have done some research on what steps your council did to limit the house price inflation that it suffered from 1997 - 2007 but I failed to discover any efforts.

I have not investigated whether you or any of your councillors / council staff have buy to let portfolios or any relationship wit housebuilders in the area - but I would be suprised if you didn't .

Do not go ahead with this waste of money. It only goes to harm those you claim to want to help.

Yours sincerely,

XXXX

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What What WHAT? :o

Surely the council has a moral duty to invest the £1million into providing affordable rented housing for those in housing need? :angry:

What a bloody disgraceful abuse of taxpayer's money.

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As someone in the article pointed out - if they really wanted to help people - they should spend the million on builidng houses and sell them to those wanting to live in them for cost price.

Builders get work. People get houses they can afford. Far too simple to ever happen.

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Put simply this is a disgraceful abuse of taxpayers money. This kind of immoral market interference makes me so angry.

They may as well take the £1m and build some houses on council land and rent them out - that would make more sense. But no, do they not understand what they are actually doing by propping up overpriced houses.

When you see schemes like this you really do wonder who is actually benefitting.

Sometimes this country is crapola on crapola, run by idiots for idiots.

</and breath>

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True, but that was in 2009, before all the council cut backs, not that they should ever do this.

How can they justify slashing services and then giving the cash to house sellers. It's a bloody disgrace :angry:

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Put simply this is a disgraceful abuse of taxpayers money. This kind of immoral market interference makes me so angry.

They may as well take the £1m and build some houses on council land and rent them out - that would make more sense. But no, do they not understand what they are actually doing by propping up overpriced houses.

When you see schemes like this you really do wonder who is actually benefitting.

Sometimes this country is crapola on crapola, run by idiots for idiots.

</and breath>

Quite the opposite IMO - I think they know exactly what they are doing. The majority of people making these decisions in councils ? Likely to be 40-60 years old most probably ?

I think we all know what self interest a lot of these people have in property prices*.

* And this is not another baby boomer or whatever debate. Just stating a fact.

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True, but that was in 2009, before all the council cut backs, not that they should ever do this.

How can they justify slashing services and then giving the cash to house sellers. It's a bloody disgrace :angry:

before the cut backs, yes, but after the economic shambles had started, everyone knew what was coming

Credit crisis timeline

and a year after councils had lost money to the icelandic banks

Who lost what

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Not just East Lothian. Blackpool, Newcastle under Lyme, Northumberland and Warrington too. :rolleyes:

Clearly this is one of the creative intiatives designed to 'help' FTBs take on debt they can't really afford.

Interesting that it's only in areas with cheap housing - by cheap I mean relative to house pirces in other areas

http://www.bbc.co.uk/news/business-12754818

Edited by Unsafe As Houses
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I emailed this to Grant Shapps and my own MP. I'm really p!ssed-off with this coalition. Grant Shapps only seems to say things that will keep the bubble inflated. There's no logical leadership coming out of this government. I emailed the following.

Reading about this scheme where councils would help first time buyers with a 20% security at

http://news.sky.com/skynews/Home/UK-News/First-Time-Buyers-To-Be-Helped-Onto-Property-Ladder-By-Local-Authority-Deposit-Scheme/Article/201103315952954?lpos=UK_News_First_Buisness_Article_Teaser_Region_0&lid=ARTICLE_15952954_First_Time_Buyers_To_Be_Helped_Onto_Property_Ladder_By_Local_Authority_Deposit_Scheme

This is disgaceful. You will be using public funds to keep the house price bubble inflated. You should be allowing free market forces to work. House prices are far too high. Everyone knows this. They should be allowed to deflate naturally, and would do so if interest rates were allowed to return where they should be. This is just encouraging young couples to get very deep in debt for 25 years.

I am now very dissapointed with the coalition.

Do something to reduce house prices, NOT keep them inflated. I now live in a very perverse and sick country.

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I was brought up in East Lothian. Quite a mix of commuter settlements, rural villages and a few small towns of varying attraction. Unfortunately its proximity to Edinburgh pulled it into the madness more than you may expect given some of the places. I imagine there's a lot of new build to shift.

Quite why the council thinks its business to provide additional guarantees to private secured lending transactions is not clear.

At the end of the day the scheme may 'help' 40 buyers rip up their retirement aspirations realise their dream of home ownership. Pissing in the wind.

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From sky news.

The initiative is aimed at people who could afford monthly repayments on a 95% mortgage but do not have the big deposit most lenders currently require.

Councils will step in to provide a security worth up to 20% of the property's value, which would be held with the lender and on which interest would be paid, enabling the buyer to qualify for a lower mortgage rate.

The individual would still borrow up to 95% of the property's value, but they would also own the home outright - unlike under a shared ownership scheme.

Blackpool, Warrington, Northumberland, Newcastle under Lyme and East Lothian will pilot the scheme initially, but there are plans to roll it out to other areas of the UK later this year.

Lloyds TSB is the first lender to sign up to the programme, which has been developed by Sector Treasury Services, part of the Capita Group.

The part-nationalised bank has adapted its existing Lend a Hand mortgage, under which parents lodge money with the bank equal to up to 20% of a property's value, to create Local Lend a Hand - where the council stumps up the money instead.

Interest rates have not yet been set for the scheme, but are likely to be similar to those offered through the Lend a Hand scheme - 5.09% with a 5% deposit for a fee of £895.

Lloyds TSB's mainstream range offers a rate of 5.99% with a 10% deposit.

Cecilie Booth, director at Sector Treasury Services, said: "The combination of relatively high house prices and understandable caution over lending from banks and building societies means that many potential first-time buyers are unable to save a sufficient deposit, even though they could afford mortgage repayments on a typical first home."

Housing Minister Grant Shapps recently called on lenders to do more to help struggling first-time buyers, including introducing new products.

He welcomed the scheme, saying: "I'm delighted to see that those on the front line of building homes and providing mortgages are stepping up their efforts to help aspiring first-time buyers get a foot on the ladder.

"These new and innovative mortgage products are welcome because they are tailored to meet the challenges faced by first-time buyers, and can help get the housing market moving again."

I don't know what to say really, words are not enough to portray my sense of rage and abandonment.

Not only are they further pushing house prices out of reach of FTBs but they are wasting council money at time when they are cutting back and shedding jobs.

On a more positive note though it's not going to 'help' that many people even if it's rolled out countrywide 40 more highly indebted FTBs per county won't make much of difference.

Also how many FTBs will actually be loaned so a large sum? 95% of a £165k is £156k quite a lot to borrow for someone who can't afford to save for a deposit. Plus they a fcuked when IRs rise. I can't the councils losing an awful lot of their million here.

Edit: also I want my share of the £1million, just because I've been careful and gone without luxuries why should I miss out. I anything I deserve more than those who wasted all the money on holidays and cars and shit instead of saving!

Edited by Pent Up
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This is nothing new. Way back in 2001, when I was house-hunting, there was a property on the market for about 20% less than it's comparable value, and the difference was being funded by Preston council. The only conditions were you had to be a first time buyer, who currently lived and worked in Preston (Lancashire).

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This is nothing new. Way back in 2001, when I was house-hunting, there was a property on the market for about 20% less than it's comparable value, and the difference was being funded by Preston council. The only conditions were you had to be a first time buyer, who currently lived and worked in Preston (Lancashire).

Free money for the owner, bet he couldn't believe his luck!

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The radio suggested that the council gets a good return on the money, which suggests that the buyer is somehow paying interest on the invisible deposit?. If they have the first change on the property, it might be sensible way of getting a return on council reserves.

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The radio suggested that the council gets a good return on the money, which suggests that the buyer is somehow paying interest on the invisible deposit?. If they have the first change on the property, it might be sensible way of getting a return on council reserves.

What, first charge on a depreciating asset that is in negative equity.. that will help return council services back to their heady heights.

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