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Foreign Buyers Could Use Taxpayer-Backed Mortgages Under Scheme Which Risks Driving Up House Price

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Foreign buyers could use taxpayer-backed mortgages under scheme which risks driving up house price

Rich foreigners could have mortgages backed by the British taxpayer under George Osborne’s multi-billion plan to kickstart the housing market, it emerged today.

David Cameron refused to deny that the Help to Buy scheme will be open to help foreign citizens buying property in the UK.

The plan has been repeatedly criticised over fears it will fuel a new house price bubble.

Read more: http://www.dailymail.co.uk/news/article-2336379/Foreign-buyers-use-taxpayer-backed-mortgages-scheme-risks-driving-house-prices.html#ixzz2VMHxptuo

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I noticed it too. There were audible gasps in the house of commons.

This is the moment. 23m44sec.

1st link automatically jumps to 23m44sec.

or you can find it here.

Edited by sleeping dog

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They would need to take out a 70% mortgage. Some lenders may be happy to lend 70% LTV and as long as they stump up the 5% deposit, I doubt he seller will be that bothered. How many EU banks would lend 70% to a UK citizen to buy in another country?

I don't expect it would be many people, but it's the principle of the thing ne c'est pas?

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"treasury have been unable to answer for the last two months"

F****ing disgrace!

The fact they haven't answered means they cannot therfore the claims are almost certainly true.

EU discrimination rules mean they probably must make this available to anyone from within the zone. The Labour MP knew this so chose her words carefully.

The policy is a disgrace anyway but to offer taxpayer support for foreign speculative investments is criminal.

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It seems inconceivable that the part of this hair brained scheme scheduled for 1st Jan 2014 can go ahead. Ironic that it kicks in the day we open up big time to Bulgaria and Romania. Cue stories of squeegy merchants buying up £600,000 pwoperdies using the 'Help to Buy' scheme.

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The fact they haven't answered means they cannot therfore the claims are almost certainly true.

EU discrimination rules mean they probably must make this available to anyone from within the zone. The Labour MP knew this so chose her words carefully.

The policy is a disgrace anyway but to offer taxpayer support for foreign speculative investments is criminal.

That's a good point. I hadn't thought about EU Law.

If the policy turns out that way, it will sink the coalition. ... and rightly so. As you say, it's criminal.

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That's a good point. I hadn't thought about EU Law.

If the policy turns out that way, it will sink the coalition. ... and rightly so. As you say, it's criminal.

But honestly, who now can say he is surprised? Generations of Westminster traitors and quislings have betrayed this country's future for a short-term financial fix. Why would the present shower be any different?

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But honestly, who now can say he is surprised? Generations of Westminster traitors and quislings have betrayed this country's future for a short-term financial fix. Why would the present shower be any different?

Quite right. I'm not so optimistic about this bringing down the Govt/coalition, insofar as it won't (imo) trigger such ructions that an early election is required, and Dave's fate is pretty well sealed as a result of the shift seen in the local elections. I fully expect the next PM to be Ed Miliband. The HTB policy simply encapsulates the bare-faced nature of the thievery from our elected representatives. I've no doubt Labour would have done similar if still in office.

I must say I've been impressed by the general ridicule heaped on HTB from all manner of disparate sources. George probably thinks that means he's pitched it right :lol:

Total clowns.

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I saw a tweet today, suggesting that FTBs are waiting for the second part of help to buy to start which suggests a couple of things - transaction levels to tank between now and Xmas and come January, a MIRAS-esque boom as every proceedable buyer in the UK jumps in at once.

I'm quite afraid of the prospect.

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I saw a tweet today, suggesting that FTBs are waiting for the second part of help to buy to start which suggests a couple of things - transaction levels to tank between now and Xmas and come January, a MIRAS-esque boom as every proceedable buyer in the UK jumps in at once.

I'm quite afraid of the prospect.

Sounds like wishful thinking tbh. The second part of HTB is not an equity loan, just a pointless exercise in self-insurance which any lender of moderate volumes would be better avoiding, unless they wish to employ paper shufflers. And the potential borrowers have to pass affordability tests on the whole balance (net of a deposit).

Maybe many FTBs simply are unaware of the difference in the two parts, geez it took many of us a while to realise and we're supposed to be on top of this stuff.

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Sounds like wishful thinking tbh. The second part of HTB is not an equity loan, just a pointless exercise in self-insurance which any lender of moderate volumes would be better avoiding, unless they wish to employ paper shufflers. And the potential borrowers have to pass affordability tests on the whole balance (net of a deposit).

Maybe many FTBs simply are unaware of the difference in the two parts, geez it took many of us a while to realise and we're supposed to be on top of this stuff.

This is the problem. At the time it was clearly implied it was 20% free money repayable in 5 years on existing housing stock. The silence since has not helped the situation and it could go either way yet - policy changing to suit public opinion or desired outcome.

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This is the problem. At the time it was clearly implied it was 20% free money repayable in 5 years on existing housing stock. The silence since has not helped the situation and it could go either way yet - policy changing to suit public opinion or desired outcome.

True, but the policy as it stands is the mortgage guarantee. The amount of flack Osborne is taking for this is amazing. Cameron said (in the PMQs vid) that the Chancellor will announce details, although the timescale was not given.

It is a risk, but the idea of loads of people putting in offers in Jan 2014 as it stands is fairytale stuff for EAs. We know the public finances cant fund this.

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True, but the policy as it stands is the mortgage guarantee. The amount of flack Osborne is taking for this is amazing. Cameron said (in the PMQs vid) that the Chancellor will announce details, although the timescale was not given.

It is a risk, but the idea of loads of people putting in offers in Jan 2014 as it stands is fairytale stuff for EAs. We know the public finances cant fund this.

My understanding is that the government is getting into the credit default swap business, by selling protection on mortgages.

The price they sell at is absolutely critical. If they sell at the market price, or higher, then the policy will have no real impact of any kind.

If they sell at less, then it will achieve its objective and push up the cost of housing.

For this reason, the government never has to do a u-turn, or admit it made a potentially catastrophic mistake, they just price themselves out of the market.

Of course, I don't believe they'll do this intentionally, but the pricing decision isn't something that Osbrown is capable of understanding so it might just fall to civil servants. Their silence on the details is really strange.

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My understanding is that the government is getting into the credit default swap business, by selling protection on mortgages.

The price they sell at is absolutely critical. If they sell at the market price, or higher, then the policy will have no real impact of any kind.

If they sell at less, then it will achieve its objective and push up the cost of housing.

For this reason, the government never has to do a u-turn, or admit it made a potentially catastrophic mistake, they just price themselves out of the market.

Of course, I don't believe they'll do this intentionally, but the pricing decision isn't something that Osbrown is capable of understanding so it might just fall to civil servants. Their silence on the details is really strange.

I watched George Osborne on TV in front of the Treasury Select Committee earlier this year and it was painfully obvious he couldn't reveal much detail on the scheme because it had not been thought through in sufficient detail. Nothing has changed. I have written to my local MP in Westminster, Mark Field, regularly on the subject of housing and found it difficult to do so on the subject of Help to Buy because I am not clear on exactly what the Government is proposing. Estate agents and the general public do seem to think it's a straight 20% loan so the last few posts on this thread have been enlightening.

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This is the problem. At the time it was clearly implied it was 20% free money repayable in 5 years on existing housing stock.

Isn't it? What has it now become?

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I watched George Osborne on TV in front of the Treasury Select Committee earlier this year and it was painfully obvious he couldn't reveal much detail on the scheme because it had not been thought through in sufficient detail. Nothing has changed. I have written to my local MP in Westminster, Mark Field, regularly on the subject of housing and found it difficult to do so on the subject of Help to Buy because I am not clear on exactly what the Government is proposing. Estate agents and the general public do seem to think it's a straight 20% loan so the last few posts on this thread have been enlightening.

I am 100% convinced that it was panicking policy making on the fly - a desperate attempt to look as if they are doing something to grow the economy and, more importantly for them personally, to try and win the election in 2015.

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The Tories you mean?

....Why are they doing this?....it makes no sense?...they trying hard to destroy themselves as well as most of the growing numbers of the rest of us? ;)

Even many of the elderly I talk to agree.....they can see the air being purposely pumped into the already at bursting point bubble......who are they trying to protect? certainly not the people, mainly the young they hope will take on huge amounts of debt on top of the education debt/tax they already hold when the economy is faltering and fewer jobs are regular and secure enough to service such high amounts of borrowing for such long periods of time. ;)

Edited by winkie

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A guarantee so that 95% borrowers can access 75% rates?

Not an equity loan

Yes, I was under the impression that borrowers making use of Help to Buy wouldn't even realise it was there i.e. the deal happens behind the scenes between the bank and the government. It just looks like a 95% mortgage to the borrower.

Edit: Looks like there are two versions of it. An equity loan which you can get now, or a mortgage guarantee which will start in January next year:

http://www.helptobuy.org.uk/help_to_buy.aspx

https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-mortgage-guarantees

Edited by Dorkins

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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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