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Jimmy_James

Anyone Know Someone Who Bought At Peak Using Homebuy / Homebuy Direct?

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Hi all,

PricedOut are looking to help set up a story for a couple of days time, a budget follow up piece.

Have been approached by a respected journalist, they want to see 'what happened the last time the government did an assisted deposit scheme' - particularly seeing if they can interview one of the lucky few (ahem) who bought near peak an inner city one bed room flat using a previous shared ownership / shared deposit type scheme. To see whether they are in negative equity / regret their choice.

If anyone knows anyone, then please get in touch by e-mailing us at: press@pricedout.org.uk

We've also put out a quote on the new scheme, which will hopefully get picked up

Cheers!

JJ

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Hi all,

PricedOut are looking to help set up a story for a couple of days time, a budget follow up piece.

Have been approached by a respected journalist, they want to see 'what happened the last time the government did an assisted deposit scheme' - particularly seeing if they can interview one of the lucky few (ahem) who bought near peak an inner city one bed room flat using a previous shared ownership / shared deposit type scheme. To see whether they are in negative equity / regret their choice.

If anyone knows anyone, then please get in touch by e-mailing us at: press@pricedout.org.uk

We've also put out a quote on the new scheme, which will hopefully get picked up

Cheers!

JJ

[i do not know of anyone, sorry.]

When schemes like FTBI were first introduced under Labour, I looked into these housing initiatives every year, [for years.]

[shared Equity has been around for decades, but I had not heard of it before.]

I talked to the housing associations, estate agents, housebuilders, Joseph Rowntree trust, other trusts, and Homebuy agents for all the government schemes.

They were all completely useless.

The only government funded shared equity schemes, within 25 miles of me, fell into a number of different county councils territories.

And according to all the local County Councils, who i contacted, time and time again, I had to have family, work, or some other form of ties to the area, to move there or live there!

Even if I had wanted to jump on the wagon back then, [2003/4 ish] I could not have done so. And now I am glad I did not do.

The only people who took this up were certain 'key' workers!

[i remember they had a couple of blocks of newly built 'luxury' egg box high rise flats in Leeds City Centre. Which even at that point, all the locals had nicknamed them, 'the slums of the future'. You know the type. The flats that were never designed to be lived in, only to be built and sold for a quick profit, in a rising crooked market]

I was emailing my local Labour MP for years. But never received one response.

It became obvious why I did not receive a response, when she appeared on the front page of the Daily Telegraph, for flipping houses, making over £200k in personal profits then retiring the following year.........

Shared Equity was a system designed NEVER to work. It was a smokescreen, so politicians could milk the system, and make huge profits,by flipping houses under a [then] secret expenses system.

And the Tories, including Grant Shapps, whilst in opposition, went on record stating how utterly useless Shared Equity was, and what a bad idea it was.

And whats the first and only solution they suggest upon entering office........?

Shared Ownership.

And all the VI newspapers, have headlines, stating that Osborne is helping FTB's with this budget?

Thieving incompetent, useless Vested Interest C@nts one and all.

Edited by Dan1

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Hi all,

PricedOut are looking to help set up a story for a couple of days time, a budget follow up piece.

Have been approached by a respected journalist, they want to see 'what happened the last time the government did an assisted deposit scheme' - particularly seeing if they can interview one of the lucky few (ahem) who bought near peak an inner city one bed room flat using a previous shared ownership / shared deposit type scheme. To see whether they are in negative equity / regret their choice.

If anyone knows anyone, then please get in touch by e-mailing us at: press@pricedout.org.uk

We've also put out a quote on the new scheme, which will hopefully get picked up

Cheers!

JJ

I think you would have a better chance of finding someone if you post on MSE {money saving expert}

I know no one this time round but in the 90`s I know a few and it all ended in tears for all off them ,trapped in a unsellable home,and the only way out was intentional bankruptcy and repossession

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I think you would have a better chance of finding someone if you post on MSE {money saving expert}

I know no one this time round but in the 90`s I know a few and it all ended in tears for all off them ,trapped in a unsellable home,and the only way out was intentional bankruptcy and repossession

I know of somebody who bought a flat under this scheme for 'key workers'. He tells me that lots of appartments in this building are being let out now (against the terms of the purchase agreement) for a decent yield.

As a method of propping up the buy-to-let sector it seems to have worked; many of the key workers the scheme was designed for no longer live there.

The bigger issue is that the banks are taking on no risk at all unless property prices fall by more than 25% from here, but will still recoup interest at around 5% above base rate. I would be happy to lend my money on this basis. The risk in this new scheme is 20% purchaser, 40% developer and 40% taxpayer. Write to your MP anyone?

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I know of somebody who bought a flat under this scheme for 'key workers'. He tells me that lots of appartments in this building are being let out now (against the terms of the purchase agreement) for a decent yield.

As a method of propping up the buy-to-let sector it seems to have worked; many of the key workers the scheme was designed for no longer live there.

The bigger issue is that the banks are taking on no risk at all unless property prices fall by more than 25% from here, but will still recoup interest at around 5% above base rate. I would be happy to lend my money on this basis. The risk in this new scheme is 20% purchaser, 40% developer and 40% taxpayer. Write to your MP anyone?

...and it is a return to the high-risk lending which propelled house prices to high levels in the first place.

Post 2008 we were assured that low multiples would 'never again be allowed'. Less than 3 years later our politicians are not only sanctioning it, they are giving a taxpayer guarantee to underwrite the risk for the banks.

If we can all afford £300k for an average house, then the price will be £300k. If we can afford £100k then the price will have to fall. Monthly repayments for £100k loan would be significantly lower, and I could spend my spare money re-inflating the real economy by buying things, going on holiday etc. The property owner may only have to put down 5%, but they still have to pay off a 20% loan to developers and government + the mortgage.

Summary: Banks benefit. Society pays more for somewhere to live. Real economy suffers as increasingly large sums of our monies are diverted into housing.

Anyone written that letter yet?

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I know two guys that did exactly this.

But they are yet to admit that it may have been a mistake - they are of the opinion that prices will "bounce back" and for flying up and up and up.

If I send them this link they will probably hate me for a few months

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I'd want to question the maths behind it.

Builder has the flat on the market for 250k.

Buyer puts up 5% = £12.5k - all they can afford.

Gov puts up 10% = £25k

Builder puts up 10% =£25k (wasn't that called fraud last year??)

So, Builder 'makes' £250k on the sale - £25k loss off settable against tax. What profit are we assuming? 50%? So, presumably they pay corporation tax at 28% - so £35k. Overall a net win for the treasury, albeit only £10k.

However, if the buyer can only acheive a loan+deposit of £125k (assuming 10% deposit), then the builder assumes a £25k loss, and the treasury gets nothing.

FTB on the other hand = ***cked to the tune of 100k + interest - so around £150k

The bank over 25 years @5% would have earned £87k on the £112.5k loan, with a corresponding £25k in corp tax.

On the other hand, by subsidising the scheme and acheiving the £200k loan, they would make £155k, with £43k going to the treasury.

Overall, a massive amount of win for the treasury, just a huge amount of loss for the ftb.

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I know someone who bought a one bedroomed slave-box for £200k in London SE20 under the new build homebuy scheme back in 2008, much to my very vocal consternation at the time. There's only been one resale in that block (well, that has been registered by LR - i.e. not auctioned, repossesed etc) which was last year, for £150k. All the flats are identical.

Not sure he'd want airing his dirty laundry in public mind you. :blink:

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Was speaking to two colleagues who bought their 2 bedroom flats from Taylor Wimpey (Basingstoke area) - the amount mentioned in the land registry was much higher than what they actually paid. It seems Taylor Wimpey gave them some kind of 'discount' but the price mentioned in the actual sale is the original asking price. Maybe some journalist should investigate this as it looks some kind of scam to keep the prices high.:angry:

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Sounds like a 'vendor gifted deposit'.

Check out the cml stats for 'unassisted' borrowing. Almost no one seems to be doing it alone, and I suspect most of it is vendor gifted...

Probably pay stamp too.

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Was speaking to two colleagues who bought their 2 bedroom flats from Taylor Wimpey (Basingstoke area) - the amount mentioned in the land registry was much higher than what they actually paid. It seems Taylor Wimpey gave them some kind of 'discount' but the price mentioned in the actual sale is the original asking price. Maybe some journalist should investigate this as it looks some kind of scam to keep the prices high.:angry:

I think you buy the house at full asking price and the developer pays your 10% deposit for you. In other words, the house was sold at a 10% discount, but it appears on the Land Registry at full price.

Not sure whether this is illegal, unless somebody is evading tax somewhere along the line? It is certainly immoral. It could perhaps be challenged under some law? I don't know.

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I think you buy the house at full asking price and the developer pays your 10% deposit for you. In other words, the house was sold at a 10% discount, but it appears on the Land Registry at full price.

Not sure whether this is illegal, unless somebody is evading tax somewhere along the line? It is certainly immoral. It could perhaps be challenged under some law? I don't know.

And, bizarrely enough, successive governments seem to have turned a blind eye to this 'fraud'. dry.gif

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I don't know anyone but a couple of points I'd make.

This scheme is bad for social mobility because when the FTB sells the house they have to give the 20% back. If they lose their job etc they may not be able to move to a new job if they cannot afford the 20% needed..

Why do we have the FSA? Their remit is to regulate the financial industry. This scheme circumvents any attempts to lend sensibly. If banks think FTBs are too risky for a 95% mortgage then they are too risky. If banks won't take on the risk why should the government (and councils re the scheme announced last week). It's even worse because banks will know they have less loss potential. Their loss only kicks in if the FTB defaults and the house price drops more than 25% plus payments the bank received before then. Therefore it encourages banks to lend recklessly - AGAIN.

The car scrappage scheme inflated car prices and this could do the same to house prices. House builders are giving FTBs an interest only loan potentially for life. They will want to add the costs of this to the selling price.

Re the council scheme that is allowing banks to make money from our council tax payments. Banks are lending to FTBs at 5.09% with an £895 fee or 5.79% with no fee fixed for 3 years but paying councils only 4% so the banks have a free arbitrage on our council tax money. Is the council 4% fixed? What happens after 3 years if interest rates are higher? If the FTB switches to a variabe rate mortgage with a higher rate but the council's rate stays at 4% the banks make even more money from our council tax.

http://www.guardian.co.uk/money/2011/mar/16/local-councils-first-time-buyer-mortgage-support

Pre-election the Tories said they wanted an economy based on savings and investment. Both these schemes are saying to people don't bother saving the nanny state will pay everything for you.

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I know someone who bought a one bedroomed slave-box for £200k in London SE20 under the new build homebuy scheme back in 2008, much to my very vocal consternation at the time. There's only been one resale in that block (well, that has been registered by LR - i.e. not auctioned, repossesed etc) which was last year, for £150k. All the flats are identical.

Not sure he'd want airing his dirty laundry in public mind you. :blink:

Thanks bomber,

Would you be able to provide a link to the development? That would at least allow us to be able to show the danger of falling prices via LR figures.

Many thanks!

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I know two guys that did exactly this.

But they are yet to admit that it may have been a mistake - they are of the opinion that prices will "bounce back" and for flying up and up and up.

If I send them this link they will probably hate me for a few months

Cheers superted - likewise, would you be able to post of send us (press@pricedout.org.uk) a link to the exact development - we could do the maths from there without having to get your friends involved

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Thanks bomber,

Would you be able to provide a link to the development? That would at least allow us to be able to show the danger of falling prices via LR figures.

Many thanks!

Have PM'd you. I will broach the subject with him, but much like SuperTed187 says about his mates, I'm sure he's in the same mindset that this is just a temporary blip in the magic HPI machine.

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Im waiting for the tv documentary's on these schemes to start those who bought at peak must be way down by now and it is only going to get worse.

I remember at the start of the 90's watching people on the telly who had bought small flat's and studios at the top of the last peak , one couple were trapped in a studio worth peanuts compared to what they had paid , they had had a baby and so 3 of them were living in this cramped space. A few years later the same programe went back and revisited the people shown , most had seen things turn around and all would have if they had waited just a few years.

This time those that have bought into these schemes where they have only bought a share in the place will not be seeing a quick reversal in their circumstances.

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I know of somebody who bought a flat under this scheme for 'key workers'. He tells me that lots of appartments in this building are being let out now (against the terms of the purchase agreement) for a decent yield.

As a method of propping up the buy-to-let sector it seems to have worked; many of the key workers the scheme was designed for no longer live there.

The bigger issue is that the banks are taking on no risk at all unless property prices fall by more than 25% from here, but will still recoup interest at around 5% above base rate. I would be happy to lend my money on this basis. The risk in this new scheme is 20% purchaser, 40% developer and 40% taxpayer. Write to your MP anyone?

These flats are in the Reading area for NHS staff if anyone from PricedOut was interested.

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Who funds pricedout?

I believe it's the priced-out 20 and 30 something individuals and volunteers who set up the site. They also accept kindly donations.

http://www.pricedout.org.uk/Campaign/Donations/tabid/179/Default.aspx

I also just want to thank Jimmy_James and Katy for all the hard work and action they are taking to promote the plight of first time buyers. We are up against a huge, wealthy VI industry that has the support of our own government and yet PricedOut is still managing to get out there and get the message across.

If there was ever a time for change and building upon a swing in public sentiment it is now.

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A big thanks to everyone who sent us links, e-mails or PM'd. We're working on getting something together now.

On the funding q - we're all volunteers, and have no formal donors at the moment. But if anyone fancy giving a donation via the pay pal link (now working again!) on our website that would be great. We've got a few meetings with journalists and politicos coming up and help with the train fares to London always welcome!

Cheers for the help everyone

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A big thanks to everyone who sent us links, e-mails or PM'd. We're working on getting something together now.

On the funding q - we're all volunteers, and have no formal donors at the moment. But if anyone fancy giving a donation via the pay pal link (now working again!) on our website that would be great. We've got a few meetings with journalists and politicos coming up and help with the train fares to London always welcome! Cheers for the help everyone

Top tip, make the journos pay for their own train fares.

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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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