Sickening

[Stop The Ride]

Prices are only really "propped up" if people can actually achieve that price for their property, because if they can`t, it isn`t really a "price"? The boom in cheap credit "propped up" property prices, but unfortunately (for those trying to sell) that boom is not coming back. There is a difference between "I think my property is worth X", and "I have just sold my property for X"? Sales volumes tell us that, for the majority of sellers, todays asking prices are not achievable?

Sure there are lots of factors. But amongst them is this new scheme supplying more credit which can only exert an upward pressure among other pressures.

[BlueRat]

From the local rag:

[wonderpup]

Somebody does not believe in the "free market" any more!

Yes- that is a bit odd- these children of Thatcher seem to have developed a taste for central planning when it comes to the housing market.

I wonder what other schemes Comrade Osbourne might have up his sleeve?

Maybe they should just cut out the middle men and offer cash for votes?

[cashinmattress]

From the local rag:

Cost of living ain't getting any cheaper... these are repayment only mortgages.

That's £1000 quid a month at 2.5%.

Then in 5 years add an extra £300-ish for the repayment of the 'loan'.

I like the '100%' dream home bit.

[Bloo Loo]

You are correct as to the outcome, IMO, but the timing is hard to predict. This is yet another attempt to kick the can down the road, and it will be successful in doing that. It can't stop the ultimate unravelling, but when will that be? Actually, if your aim is to prop up house prices in nominal terms, while creating inflation by increasing government debt / liabilities, it's a pretty good policy.

why will it be any more successful than identical schemes run by Local authorities for the last year or so?

this one is the guarantee version of the 20% deposit...I think its helped 1 family.

http://www.mortgagestrategy.co.uk/latest-news/essex-county-council-launches-ftb-mortgage-scheme/1065933.article

Other Authorities were doing this crap way into last year.

Edited April 29, 2013 by Bloo Loo

[Bloo Loo]

From the local rag:

As I understand it, the new FSA ( whatever they are called) require you meet traditional lending criteria on ALL the borrowings all £283,000 of it.

family income of £70,000....at least.

And just to really upset the taxpayer, the equity loan is a second charge.

so a 5% drop in value and the taxpayer is at a loss...the banker is free to possess at will.

Edited April 29, 2013 by Bloo Loo

[Stop The Ride]

Cost of living ain't getting any cheaper... these are repayment only mortgages.

That's £1000 quid a month at 2.5%.

Then in 5 years add an extra £300-ish for the repayment of the 'loan'.

I like the '100%' dream home bit.

This time next year, Rodders, we'll all have 125% dream homes.

Edited April 29, 2013 by Stop The Ride

[Venger]

From the local rag:

Another newbuild with the missing driveway to the internal garage. I've just seen the banner advert exactly the same for that development on rightmove.

Sick orange hideous box houses from gov preferred housebuilders.

Edited April 29, 2013 by Venger

[Bloo Loo]

lets not forget the government but is an EQUITY LOAN.

That means they own 20% of the EQUITY.

so if your house goes UP in value when you sell, so does the amount you owe to the Government...

https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-equity-loans

[Bloo Loo]

Another newbuild with the missing driveway to the internal garage. I've just seen the banner advert exactly the same for that development on rightmove.

Sick orange hideous box houses from gov preferred housebuilders.

I love the way they focus most of the adverts on furnishings....nothing to do with the house.

[Stop The Ride]

Another newbuild with the missing driveway to the internal garage. I've just seen the banner advert exactly the same for that development on rightmove.

Sick orange hideous box houses from gov preferred housebuilders.

Death is too good for them. This is the first image on their rightmove listing.

[Stop The Ride]

Is this listing even legal?

From £276,797

4 bedroom detached house for sale

The Longworth at Warwick Chase, Hardwick Field Lane Warwick, CV34

Figure shown has a 20% FirstBuy equity loan deducted. A stunning 4 bedroom detached home that offers an impressive 1289 sq ft of spacious family living. The ground floor features a living room with feature bay window, a fitted kitchen/dining room, utility and a downstairs cloakroo...

More details, 7 photos, floorplans, brochure and virtual tour Save property Contact developer

Warwick Chase development by Taylor Wimpey . Telephone: 01926 933035 Local call rate

Key features:

Detached house from £341,995

4 bedrooms, 1 with ensuite

Single Garage

Private Garden

Master Bedroom - En-suite shower

Living Room

Downstairs Cloakroom

Utility Room

[Venger]

Death is too good for them. This is the first image on their rightmove listing.

A good salesman sell the benefits, not the function. (Learnt that on HPC).

Such marketing is probably the way to lure in the types who don't care what level of debts and schemes they have to enter, to get what they should be entitled to.

[Stop The Ride]

RED RUM

[long time lurking]

why will it be any more successful than identical schemes run by Local authorities for the last year or so?

this one is the guarantee version of the 20% deposit...I think its helped 1 family.

http://www.mortgagestrategy.co.uk/latest-news/essex-county-council-launches-ftb-mortgage-scheme/1065933.article

Other Authorities were doing this crap way into last year.

Yep be seen to be doing something but achieve sweet fa

[Venger]

Yep be seen to be doing something but achieve sweet fa

Council of Mortgage Lenders chairman Nigel Terrington.

But who, in the future, will remember the likes of TIS, DIYSO, Home Buy, Open Market Home Buy, Home Buy Direct or First Buy? "A year after its implementation, we do still have NewBuy - but only just - although people believe that it will quietly fade away once the new guarantee scheme goes live. And the mortgage guarantee scheme is one of the two separate initiatives that are now - not entirely helpfully - single-branded as Help to Buy."

He added that lenders felt betrayed by the government's Help to Buy scheme being announced just as the previous NewBuy initiative was starting to gain momentum.

"I ask you, how long did any of Help to Buy's predecessors last before we found ourselves waving goodbye to one initiative, whilst at the same time welcoming yet another? What certainty does this evidence?

"I wonder whether lenders and the CML would have worked so tirelessly - with so many through-the-night lawyer sessions - as well as the millions of pounds of implementation costs - to get the NewBuy scheme up and running, had we known that Help to Buy would be announced only a year later?"

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2264424/govt-must-ditch-sound-bite-mortgage-policies-cml

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2264662/david-cameron-forced-to-defend-help-to-buy

[Alba]

The problem is when the economy goes even more negative in 5 years time will any Government push for repossession because these buyers can't make any payments whatsoever on the equity portion of their loan?

I think not, so even more debt to add to the pile.

[DabHand]

So in simple terms .... house costs 100k, 5k deposit, 20k gov equity loan, 75k mortgage. After 5 years house is worth 200k, gov equity loan is now 40k and repayable at rpi +1%, say 5%. I have now a mortgage of 75k plus 40k. Or is it still a gov loan of 20k payable at rpi +1%. If the loan is an equity % then how can it be valued after the 5 years, is the house worth 200k or just 150k?

In this (simple example) I may be able to cover a 20K loan at rpi +1% but not one of 40k ... will the house be repossessed as I can't pay the larger mortgage ... and can I sue for mis-selling?

As l explained in my post previously on this thread at the end of the 5 year you face a 1.75% on outstanding amount owed as a fee. This goes up by RPI +1% per year. That is to say the actual 1.75% is increased by RPI + 1% itself which is a very small amount. Works out to take another 15 years (@6%) to reach just under 4% 'annual charge'. Check the figures in the pdf l linked in that post.

[Guest_GradualCringe_*]

Help to Buy, FLS, etc. are doing nothing, the BOE's lending figures tell a completely different story:

BOE Lending Stats

Growth in lending is falling at an increasing rate regardless of the introduction of these schemes.

All of this smacks of desperation.

[long time lurking]

As l explained in my post previously on this thread at the end of the 5 year you face a 1.75% on outstanding amount owed as a fee. This goes up by RPI +1% per year. That is to say the actual 1.75% is increased by RPI + 1% itself which is a very small amount. Works out to take another 15 years (@6%) to reach just under 4% 'annual charge'. Check the figures in the pdf l linked in that post.

Am I right in thinking ,if there is a 10% increase in value over the five years the borrower will owe 10% more than the amount borrowed in the first place plus interest/fee

[DabHand]

Am I right in thinking ,if there is a 10% increase in value over the five years the borrower will owe 10% more than the amount borrowed in the first place plus interest/fee

At sale yes. But l have no idea what happens when you try to pay down the 20% (staircasing sic) outside of a sale.

[long time lurking]

At sale yes. But l have no idea what happens when you try to pay down the 20% (staircasing sic) outside of a sale.

Thanks but the staircasing part is the part that`s not very clear

Edit: to add it looks like if there is any HPI the Government wants there cut the quote below is from the link in your other post

Following the purchase you can choose at any time to make voluntary part repayments (‘staircasing’) of the Help to Buy assistance at the prevailing market value. The minimum voluntary repayment is 10% of the market value at the time of repayment.

Edited April 29, 2013 by long time lurking

[bomberbrown]

1367261764[/url]' post='909314304']

Another newbuild with the missing driveway to the internal garage. I've just seen the banner advert exactly the same for that development on rightmove.

Sick orange hideous box houses from gov preferred housebuilders.

....on the edge of historic Warwick.... Between a water treatment works and the M40!!!

I recognised the post code, I went to Aylesford School a stones throw away.

[billybong]

Following the purchase you can choose at any time to make voluntary part repayments (‘staircasing’) of the Help to Buy assistance at the prevailing market value. The minimum voluntary repayment is 10% of the market value at the time of repayment

Likely a surveyor decides "the prevailing market value"? and their decision would be final? so the borrower wanting to repay part of the 20% might have a "prevailing market value" well over the actual or true market value - so any repayments might be excessive and well over the odds.

Presumably at sale the government would repay any overpayment - or it's just possible they might claim that the seller had sold under market value and refuse to repay any excess that had already been repaid by the borrower.

Edited April 30, 2013 by billybong

[The Knimbies who say No]

Likely a surveyor decides "the prevailing market value"? and their decision would be final? so the borrower wanting to repay part of the 20% might have a "prevailing market value" well over the actual or true market value - so any repayments might be excessive and well over the odds.

Presumably at sale the government would repay any overpayment - or it's just possible they might claim that the seller had sold under market value and refuse to repay any excess that had already been repaid by the borrower.

Interesting stuff on staircasing Dab Hand/billybong. Uncle George now has a clearer vested interest in pumping prices than ever before due to the second charge precariousness of the loan, and equity stake. Utter recklessness. I wrote to my local MP last week (Con, maj. circa 2,500) to ask for his opinion on the scheme, will be good to put these points to him if he responds.