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Foreign Buyers May Use Help To Buy?

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Residency status not listed in the eligibility requirements. Unintended consequences? Doubtful, Osborne would sell the entire housing stock from under us if he could.

http://blogs.telegra...uations-higher/

House prices rise 1.2pc but foreign buyers may use Help to Buy to boost valuations higher

By Ian Cowie Your Money Last updated: April 5th, 2013

House prices increased by 1.2pc in the first quarter of this year, their fourth consecutive quarterly advance according to Halifax, Britain's biggest mortgage lender. But experts predict that stimulus announced in last month's Budget will unexpectedly enable foreign buyers to boost demand and prices even higher. Foreign homebuyers have already propelled house prices to levels few young Londoners can afford – now some experts claim the Budget's 'big idea' of Help to Buy may be exploited by overseas buyers.

So, in an extreme example of the law of unintended consequences, a taxpayer-subsidised scheme could end up making it easier for wealthy foreigners to buy property in Britain.

That is the extraordinary conclusion of new analysis by Nick Barnes, head of research at estate agents Chesterton Humberts. He told me: "Much has been made of the potential abuse of the scheme by second home owners and the Chancellor declined to give a straight answer to the Treasury Committee as to whether second homes would be explicitly excluded. The implication based on his replies to the committee is that they will not be excluded – which contradicts the stated intention of helping first time buyers and second steppers.

"On the eligibility requirements for borrowers, there is no mention of residency status. Does this mean that wealthy foreign buyers could get help under the scheme for purchasing their second homes? This would almost certainly create a wave of bad feeling and bad publicity for the Government."

That is something of an understatement. Just think what the housepricecrash.co.uk mob would have to say. But it would tend to support this column's view that millions of existing homeowners would be the biggest winners from Budget 2013 and its tendency to boost house prices.

While it is important to emphasise that the precise wording of the Help to Buy scheme has yet to emerge from the Treasury, it is difficult for European Union member states to restrict benefits to people from just one country to the exclusion of those from elsewhere in the EU.

Edited by zugzwang

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Residency status not listed in the eligibility requirements. Unintended consequences? Doubtful, Osborne would sell the entire housing stock from under us if he could.

http://blogs.telegra...uations-higher/

Thank god I've given up expecting anything but incredulous amusement from the current cluster-fvck taking place in this country.

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A bit of balance - this Aussie guy works in the media, this sort of thinking wouldnt be allowed at the Beeb, Wail or Express!

Sick and tired of chasing dreams of finding a home

Date

April 5, 2013

Tom Whitty

Frustrated, outraged and saddened: Generation Y is blaming baby boomers for their housing market woes.

'I'm tired of the weekends spent travelling from one underquoted property to the next, only to be left feeling like and idiot when an auction opens above what would have been our final limit.'

'I'm tired of the weekends spent travelling from one underquoted property to the next, only to be left feeling like and idiot when an auction opens above what would have been our final limit.'

Oh man, I'm tired. I'm tired of the endless emails from my ever-optimistic girlfriend. The ones with links to real estate listings of rundown, two-bedroom, inner-city dives that neither of us really want to live in and, together, we can't actually afford.

I'm tired of the weekends spent travelling from one underquoted property to the next, only to be left feeling like an idiot when an auction opens above what would have been our final limit. I'm tired of the car trips back to our rented home, with my hopeful girlfriend talking about how the next property might be the one where we can raise some kids together.

I'm tired of explaining to my peers how negative gearing works, and then explaining why allowing investors to speculate on the housing market is to the detriment of our generation. I'm tired of the politicians who have consistently avoided addressing Australia's housing affordability issue over the past decade.

I'm frustrated by the affordability studies commissioned by the government that recommend an adjustment or cessation of negative gearing, only for the same politicians who commissioned the report to ignore these recommendations.

I'm bemused by the existence of the Foreign Investment Review Board, and the government's argument that ''foreign investment in residential real estate should increase Australia's housing stock''. I understand our politicians' motivation for not wanting to improve affordability, but it doesn't make it any easier to accept.

On the one hand, you have young first home buyers who are somewhat naive, attempting to enter the housing market with huge mortgages without questioning why owning a modest home is near impossible in this city. On the other, you have an ageing population that needs to retire. If the value of their biggest asset goes up when they sell it to downsize, they have more dollars to fund their retirement.

These baby boomers are also likely to be investors, and taking away the tax breaks that come along with speculating on the housing market would inevitably lead to backlash on election day. You have to ask, if those being duped are too naive to complain, and those profiteering are too valuable to upset, is housing affordability a problem for our politicians, or a gift?

I'm tired of the subsequent lack of enforcement of regulation in the real estate industry. I'm tired of the sharks and the spruikers and the snake oil salesmen. I'm tired of the media coverage of this issue that consistently goes to these same people for ''expert comment'', and I'm sick of reading about how the market is about to ''pick up'' and that ''now is the time to buy''.

I'm outraged when I read the occasional report that goes so far as to make the argument that those of us that belong to Generation Y (the renting generation) are too greedy and lazy to know what's good for us. The irony of such a statement is not lost on me.

I'm saddened that both my girlfriend and I will have no choice but to work well into our 30s so we can squirrel together a deposit for that two-bedroom dive she's so sure is just around the corner.

I'm saddened we are being made to delay starting a family, when it's all she wants. And I'm saddened that so many people who are approaching retirement will react to this with a ''cry me a river'' statement, when they know full well they never had it this tough.

I'm tired, and I want to rest my head on a pillow on a bed in a home my optimistic girlfriend and I can call our own.

I'm tired. And we haven't even had kids yet.

Tom Whitty is a TV producer and freelance writer.

@twhittyer

Link to article

Edited by Caveat Mortgagor

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Reckless bank loans to offshore entities have fuelled much of the historic property boom, handed over by lenders who subsequently had to be bailed out. British banks had £14.1bn outstanding in loans to BVI and associated offshore entities at the end of 2009, according to UK Treasury figures.

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Champaign socialism. Greed. Selfishness.

Their fathers died in combat and their kids languish as captured souls as indentured servants. Boomers have corrupted Britain in one generation.

Can't take it to your grave though.

However, none of this would have happened had it not been for the North Sea oil. Period.

Edited by cashinmattress

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A bit of balance - this Aussie guy works in the media, this sort of thinking wouldnt be allowed at the Beeb, Wail or Express!

Agentimmo posted a link to some comments in the French property section. Lots of other people who could be HPCers.

Google Chrome translates from French

http://www.lefigaro.fr/immobilier/2013/04/04/05002-20130404ARTFIG00428-immobilier-enfin-la-baisse-des-prix.php?page=&pagination=1#nbcomments

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We are expats planning to return to the London area at some time in the future, however we have no credit history due to the fact that we have never borrowed money. We have a lot of ready cash.

We have a lot more than the value of a house we'd like to buy. HOWEVER, when we try to buy a 20% mortgage (because they are giving them away aren't they) it is impossible.

We jumped through hoops with HSBC (via premium accounts) and they still treated us like shit.. Their customer service was less than non-existent,: they wouldn't even do the basics such as return calls.

It's all a bit sickening really.

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Given that Help to Buy is going to start in January 2014, why would anyone be dumb enough to try to sell a house in the next 8 months?

Spring is supposed to be the selling season, but from watching new listings on RightMove, nothing new is being marketed. I just saw an old neighbour's house come up as a new listing. This house has been on the market for 6 years, without any cut in the asking price. Six years. That's completely absurd.

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but at least it makes my very long term proposition to Mr Quine, that we buy a big mobile home and go traveling again much more acceptable. Freedom......

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Given that Help to Buy is going to start in January 2014, why would anyone be dumb enough to try to sell a house in the next 8 months?

Spring is supposed to be the selling season, but from watching new listings on RightMove, nothing new is being marketed. I just saw an old neighbour's house come up as a new listing. This house has been on the market for 6 years, without any cut in the asking price. Six years. That's completely absurd.

What is this "Spring" thing of which you speak?

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Residency status not listed in the eligibility requirements. Unintended consequences? Doubtful, Osborne would sell the entire housing stock from under us if he could.

This is good and useful journalism. Putting pressure on the government by pointing out what's wrong with the proposals as they stand: well, it seems all the world is doing that. Cowie seems to be going one better, thinking through some less-obvious consequences that he knows the government won't like, and pointing it out.

Keep up the good work, that man!

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Given that Help to Buy is going to start in January 2014, why would anyone be dumb enough to try to sell a house in the next 8 months?

Spring is supposed to be the selling season, but from watching new listings on RightMove, nothing new is being marketed. I just saw an old neighbour's house come up as a new listing. This house has been on the market for 6 years, without any cut in the asking price. Six years. That's completely absurd.

The only glimmer of hope is that the general public dont really understand what drives price increases or falls, I wouldnt worry about them holding out.

My guess is the average Joe has his beliefs formed by the media, but may have got a bit fed up of hearing 'prices set to soar' for the last 5 years and yet it hasnt happened.

So whilst Help to Buy is the one thing we on these pages fear, maybe the people who could benefit wont understand and wait around for it.

Another note on help to buy, I am hoping it will help second steppers who bought in 2005/6/7/8 to be able to move and accept a bid on their house that reflects a fall on what they paid. There must be a huge latent demand to move from these people, and maybe HelpToBuy can be the vehicle to let starter home prices fall so that ftbs can afford them. That's certainly what I am going to tell people.

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This is good and useful journalism. Putting pressure on the government by pointing out what's wrong with the proposals as they stand: well, it seems all the world is doing that. Cowie seems to be going one better, thinking through some less-obvious consequences that he knows the government won't like, and pointing it out.

Keep up the good work, that man!

I don't seem to know what "residency status" is. All I can relay is our situation. We are have UK passports, have bought (small) homes and lives in them on 2 occasions. Then we left. That was 9 years ago. We still have

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I don't seem to know what "residency status" is. All I can relay is our situation. We are have UK passports, have bought (small) homes and lives in them on 2 occasions. Then we left. That was 9 years ago. We still have bank accounts in the UK and we still pay tax there. We are HSBC premier (HA HA HA) customers. We tried to get a mortgage of twenty per cent and we couldn't/

All sense seems to have gone out the window. We actually have the full amount in HSBC and yet they still could not take that in to account.

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Does this Help To Buy have to go through any hoops (votes etc) before it goes live in January.

I can't believe they're going to take my tax money and give it to foreigners to buy properties here and push the prices even higher.

This is utter madness!!!!

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Does this Help To Buy have to go through any hoops (votes etc) before it goes live in January.

I can't believe they're going to take my tax money and give it to foreigners to buy properties here and push the prices even higher.

This is utter madness!!!!

But it creates wealth.

Are dead people allowed to use it as well?

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But it creates wealth.

Are dead people allowed to use it as well?

It's ultimately intended for them: Zombie banks, zombie businesses, zombie households etc...

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We are expats planning to return to the London area at some time in the future, however we have no credit history due to the fact that we have never borrowed money. We have a lot of ready cash.

All you need to get a clean credit history is to have settle-in-full credit card linked to your bank account and use it occasionally, taking an actual loan in not required.

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Does this Help To Buy have to go through any hoops (votes etc) before it goes live in January.

I can't believe they're going to take my tax money and give it to foreigners to buy properties here and push the prices even higher.

This is utter madness!!!!

Is there actually a movement to get this thing stopped? A concerted effort to contact local MP's, petition parliament, etc? It seems like it could be the final straw that breaks our country and my hopes (30yo, not on a financier salary) of ever owning even the most modest apartment are going out the window.

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All you need to get a clean credit history is to have settle-in-full credit card linked to your bank account and use it occasionally, taking an actual loan in not required.

Goldbug - we both have clean credit histories. We both have credit cards we pay off (boringly) every month ever since we've had them. Neither of us has ever borrowed. We are 50 plus. We've played it wrongly haven't we........ Damn.

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Does this Help To Buy have to go through any hoops (votes etc) before it goes live in January.

AIUI yes, it's still being thrashed out by TPTB.

What better input to that process than a mainstream paper whose readership includes some of TPTB pointing out unintended consequences? Let's hope Cowie and his colleagues have more uncomfortable pieces in the pipeline.

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Goldbug - we both have clean credit histories. We both have credit cards we pay off (boringly) every month ever since we've had them. Neither of us has ever borrowed. We are 50 plus. We've played it wrongly haven't we........ Damn.

Therein lies the problem.

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We are those foreign buyers (except we are not). Seems we cannot have a 15-20% mortgage.

What is your 'electoral roll' status?

Could you buy the house for cash and then remortgage? My assumption is the lender can then clearly see you own something for the loan's collateral.

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What is your 'electoral roll' status?

Could you buy the house for cash and then remortgage? My assumption is the lender can then clearly see you own something for the loan's collateral.

Haven't been on the electoral roll in the UK for many, many years - even when we lived there. That was my fault/decision as I decided not to vote and I didn't like my personal details being "out there". Always surprised that a document like that (voters' roll) holds so much sway.

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  • 243 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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