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First-Time Buyers Get Council Boost


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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.

The FTB will still have a 95% loan to repay so they will be paying interest on the council deposit, i suppose of the 5/6% interest they will pay the council will receive an a share and the bank will receive a share. it's brilliant from the banks point of view. Extremely high risk for little return from councils. I expect there would be huge losses for them on this.

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I wonder if this will only be available for new builds. Most probably.

It also appears to be very similar to an offset mortgage deal. Where a deposit is used to offest the interest you pay. Although not sure exactly how this will work with the council apparently getting a return ? And an offset mortgage is usually done with the persons OWN money - not some gifted to them to prop up new build prices that nobody wants to buy at their ridiculous prices.

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FAQ from the website. This is for the same scheme but not specifically for councils. I imagine the details will be the same.

Lend a hand

10. What happens if house prices fall?

If the mortgage does not drop to 90% or less of the property’s value, then the charge on the savings will stay in place.

Everything is based on house prices not falling. If they do ? The helper cannot get their money back. :rolleyes:

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Here is some more of the same just announced.

I'll be going to my MP if this is the case in Edinburgh - would an MP care what a council does or would I go to the councillor directly?

market manipulation

If i don't get the answer soon i'll find out myself. I tried calling my MP already but i guess they are 9-5

I AM ******ING FURIOUS

The cheerful ******* from Lloyds on radio 4 this morning said this would "help" 10s of thousands. At a million per 40 or £25k each 10,000 = £250million taxpayer pounds propping up private investments and essentially another bank bail out.

Edited by athom
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From sky news...

that will be the firm that private eye calls Crapita for it's record of failures and bad advice

This 'scheme' has got corruption and shady backroom deals written all over it. Anybody considering accepting this 'help' from the council should approach it with a great degree of scepticism. There's clearly an ulterior motive.

I TOO AM '******ING FURIOUS' :angry:

Edited by singlemalt
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I have always felt that the 'sheeple' will borrow any sum they are able to regardless of risk, so the only chance of a return to market sanity will be if lenders revert back to sensible multiples. If market fudging schemes such as this are allowed I fear we may never return to normal.

Thinking about this though....if the council are lending 20% would they not be taking the majority of the expected falls on the chin and will quickly having thousands of defaulting first time buyers wanting out?

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I have always felt that the 'sheeple' will borrow any sum they are able to regardless of risk, so the only chance of a return to market sanity will be if lenders revert back to sensible multiples. If market fudging schemes such as this are allowed I fear we may never return to normal.

Thinking about this though....if the council are lending 20% would they not be taking the majority of the expected falls on the chin and will quickly having thousands of defaulting first time buyers wanting out?

Yep and default rates on 95% LTV mortgages will be high. It won't take many to cause huge losses for the council.

And the what about in 5 years once the Market is back to 'normal' and prices are going up again? They will have to start giving double to the FTBs? And agin in another five?

Edited by Pent Up
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Any taxpayer money spent on housing, should be spent for social/council houses.

but that would mean less demand for overpriced private housing, and that must be avoided at all costs!

yet more money is being transferred from tax payers to homeowners, and at the same time indebting someone who no doubt thinks they are getting a bargain!

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This is a crazy idea. Traditionally, one of the reasons for having to save a deposit was to prove to the building society that you could budget and cope with regular repayments. We seem to have lost sight of this over the past 15 years and now just chuck money at anyone who the lending multiples stack up to (or don't in the case of self certification). That's one of the things that got us into this mess in the first place, lending to the wrong people.

Perhaps the only saving grace is the amounts look small compared to the number of first time purchases each month. Though as thesse dropped to only 10,000 or so the other month,

The other question I have is, why the hell have councils got spare money slushing around that they can lock into loans for mortgages? They're either charging too much or collecting the money off us too early.

Perhaps another idea would be if they invested their sacred pension funds in loans to first time buyers and any losses hit them instead of the taxpayer. Somehow I don't think they'd be keen on that idea.

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I'll be going to my MP if this is the case in Edinburgh - would an MP care what a council does or would I go to the councillor directly?

just spoke to someone at my MPs office, it seems this is a council decision but an MP could still side against it which might help somewhat, so get your opinion in to your MP or they will assume you're quite happy about this scheme.

The MPs admin guy looked up my local councillors who will be feeling my wrath soon should they admit to backing this abomination. Speak up or forever hold your piece! (sic) :angry:

Edited by athom
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eastlothiancourier.com

Similar article here too but with readers comments

One comment caught my eye (does someone know something we don't know :ph34r: ):

"Quote

This will be a major boost for Housing in East Lothian giving 40-50 couples a chance to get on the Housing Ladder, and will also kick start the housing market

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 "

F*****G UNBELIEVABLE!!! :angry: :angry: :angry:

Edited by eric pebble
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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 ?

Well Warrington say they will help 250 FTBs - they have population of 196,000

so scaled up that's 75,000 FTBs across the UK

currently there's about 10,000 FTBs per month

so quite a boost

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F*****G UNBELIEVABLE!!! :angry: :angry: :angry:

Well it's outrageous and extremely bad news, but sadly quite believable. The bubble will be inflated still further. It just means the crash will be delayed a few more years...possibly with hyper-inflation the result.

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