Pent Up Posted March 16, 2011 Report Share Posted March 16, 2011 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. Quote Link to post Share on other sites
ccc Posted March 16, 2011 Report Share Posted March 16, 2011 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. Quote Link to post Share on other sites
ccc Posted March 16, 2011 Report Share Posted March 16, 2011 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. Quote Link to post Share on other sites
The Eagle Posted March 16, 2011 Report Share Posted March 16, 2011 If my council was doing this I would stop paying the council tax, sending them a letter explaining why I stop payments. Quote Link to post Share on other sites
campervanman Posted March 16, 2011 Report Share Posted March 16, 2011 ditto And go straight to free housing, do not pass go. Quote Link to post Share on other sites
athom Posted March 16, 2011 Report Share Posted March 16, 2011 ditto ditto Quote Link to post Share on other sites
martingale Posted March 16, 2011 Report Share Posted March 16, 2011 From sky news... developed by Sector Treasury Services, part of the Capita Group. that will be the firm that private eye calls Crapita for it's record of failures and bad advice Quote Link to post Share on other sites
athom Posted March 16, 2011 Report Share Posted March 16, 2011 (edited) 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 March 16, 2011 by athom Quote Link to post Share on other sites
singlemalt Posted March 16, 2011 Report Share Posted March 16, 2011 (edited) 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 March 16, 2011 by singlemalt Quote Link to post Share on other sites
Beggar Thy Children Posted March 16, 2011 Report Share Posted March 16, 2011 I knew something like this was coming. This is the sort of thing shapps means when he talks about "innovative schemes". They're insane. Batshit crazy. Quote Link to post Share on other sites
guitarman001 Posted March 16, 2011 Report Share Posted March 16, 2011 They will do ANYTHING to prop it up! And in this article they say it may be rolled out NATIONALLY: http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=525716&in_page_id=8 Quote Link to post Share on other sites
W1zard Posted March 16, 2011 Report Share Posted March 16, 2011 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? Quote Link to post Share on other sites
SarahBell Posted March 16, 2011 Report Share Posted March 16, 2011 Share the story on facebook with emotive headlines like "your child's nursery place being lost due to cuts - it's because of this insane scheme" and give link. Quote Link to post Share on other sites
dammfoolman Posted March 16, 2011 Report Share Posted March 16, 2011 Every Ponzi scam needs new entrants to keep the scheme propped up. :angry: Quote Link to post Share on other sites
longtomsilver Posted March 16, 2011 Report Share Posted March 16, 2011 Councils have a VI in every property in the land as council taxes have risen broadly in line with HPI. The sooner house prices reflect reality then it will make paying over a grand of net income on a shoebox a bitter pill to swallow. Quote Link to post Share on other sites
Pent Up Posted March 16, 2011 Report Share Posted March 16, 2011 (edited) 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 March 16, 2011 by Pent Up Quote Link to post Share on other sites
sowhat Posted March 16, 2011 Report Share Posted March 16, 2011 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! Quote Link to post Share on other sites
sowhat Posted March 16, 2011 Report Share Posted March 16, 2011 further thought - If this money was to be spent on new building it would help employment/tax revenue. This is just circulating money and encouraging debt, with the bank taking a nice slice as usual! Quote Link to post Share on other sites
CharlieChuck Posted March 16, 2011 Report Share Posted March 16, 2011 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. Quote Link to post Share on other sites
Trampa501 Posted March 16, 2011 Report Share Posted March 16, 2011 (edited) Several councils are doing this according to the Beeb The councils involved so far are Warrington, Northumberland, East Lothian, Blackpool and Newcastle-under-Lyme. Councils to help FTBs Luckily there are some sane comments on that page Edited March 16, 2011 by Trampa501 Quote Link to post Share on other sites
athom Posted March 16, 2011 Report Share Posted March 16, 2011 (edited) 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 March 16, 2011 by athom Quote Link to post Share on other sites
Pent Up Posted March 16, 2011 Report Share Posted March 16, 2011 Get your comments/ arrows in. Let them know how you feel! http://www.dailymail.co.uk/news/article-1366696/Councils-struggling-time-buyers-20-deposits-homes.html# Quote Link to post Share on other sites
eric pebble Posted March 16, 2011 Report Share Posted March 16, 2011 (edited) eastlothiancourier.com Similar article here too but with readers comments One comment caught my eye (does someone know something we don't know ): "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 March 16, 2011 by eric pebble Quote Link to post Share on other sites
Liquid Goldfish Posted March 16, 2011 Report Share Posted March 16, 2011 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 Quote Link to post Share on other sites
Trampa501 Posted March 16, 2011 Report Share Posted March 16, 2011 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. Quote Link to post Share on other sites
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.