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MAIN HELP TO BUY MARK2 THREAD -


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HOLA441

£600k sounds perfectly reasonable for an FTB property, just over 20x average income, proved historically to be utterly affordable :blink:

Policy made near the City, by the City (advisor?) and for the City (and house builders).

When one sees 2 bed flat at £600k everyday in areas near Wesminster, perhaps they then have the impression that 600k FTB is a norm..

Edited by easy2012
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HOLA442

This policy is already destroying the resale market for new build homes.

Cambourne in Cambridgeshire is a new-town with several thousand rabbit hutch houses, too many bathrooms and not enough gardens or parking, but also the only affordable family housing close to Cambridge.

Under this scheme you can buy a 4 bedroom house "worth" £300k with a 5% deposit and a mortgage for £235k.

If you want to buy one of the many available 4-5 bedroom houses for resale, also priced at £300k, then you'll need a 20% deposit and a £240k mortgage. Which rules out 90% of buyers.

Nobody will buy the existing house at the same price in those circumstances. So in fact you'll see the prices of new builds effectively undercutting the houses already owned by members of the public. Saves builders yes, but leads to massive negative equity for the owners of nearly new houses.

So good news for a HPC? Looks like just another token scheme that will never replace the credit conditions that caused this bubble?

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HOLA443

So the guarantee is useless until the banks have repossessed the property. In the medium term this guarantee creates an incentive for banks to go for repossession rather than forebearance. I see a lot of unintended consequences in this scheme.

Excellent point!

I wonder if the banks are going to start writing to their customers in forbearance/negative equity offering them a financial incentive to remortgage with H2B. It would definitely make sense for them to shift their negative equity customers onto the government.

Osborne is kidding himself if he thinks he can offer £12bn in guarantees to the biggest financial sharks on the planet without them finding a way to cash them in.

Edited by Dorkins
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HOLA444

What's the forum opinion on the wider effect of this? I wonder if this will do nothing more than knacker the whole house price based economy, having seen the other thread saying MEW is back.

I can see it stagnating the housing market. The scheme will give false hope to those who want to sell - to hold out for what their house is 'worth' - and it will give false hope to those who think they may be able to 'afford' to buy - based upon a few who qualify for the scheme - those who find the right priced house and have the right credit conditions. The latter will be a small minority though - look at the indebtedness of the first steppers and the fact that the BOMAD is now becoming worried about funding their retirement - However, while small in number they will be sufficient to enable the press to make it look as if 'something is being done' since few commentators will bother to look at volumes.

So the damage will be stagnation to the economy as high houseprices raise the cost of living and stop people moving around. Eventually, there will be a crash. Hopefully, by then, I will have completed my work and be heading off somewhere else.

i stumbled across a property for sale in my neck of the woods today - S.Devon. It sold in 2001 for £237k and is now on the market for £775k. According to the BoE inflation calculator it should be £332k, for which I might consider it. So I'll continue to rent and not give a flying proverbial about the UK as a place.

The plate spinner has so many going that he is now calling upon the audience to come on stage and help.

Edited by LiveinHope
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HOLA445

i stumbled across a property for sale in my neck of the woods today - S.Devon. It sold in 2001 for £237k and is now on the market for £775k. According to the BoE inflation calculator it should be £332k, for which I might consider it. So I'll continue to rent and not give a flying proverbial about the UK as a place.

The plate spinner has so many going that he is now calling upon the audience to come on stage and help.

Did you check to see if the house has been upgraded using gold brick and gold toilet seats?

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HOLA446

SO here we have a scheme, ill thought out, pulled apart in public, and today, they are meeting with the beneficieries of this largess and amongst themselves are discussing how it will all work...to EACH SIDES MUTUAL ADVANTAGE.

In my view, this meeting is a sign of severe CORRUPTION.

Next you will be telling us that the last elected PM is now earning millions a year working as a consultant for a bank.

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HOLA447

I can see it stagnating the housing market. The scheme will give false hope to those who want to sell - to hold out for what their house is 'worth' - and it will give false hope to those who think they may be able to 'afford' to buy - based upon a few who qualify for the scheme - those who find the right priced house and have the right credit conditions. The latter will be a small minority though - look at the indebtedness of the first steppers and the fact that the BOMAD is now becoming worried about funding their retirement - However, while small in number they will be sufficient to enable the press to make it look as if 'something is being done' since few commentators will bother to look at volumes.

So the damage will be stagnation to the economy as high houseprices raise the cost of living and stop people moving around. Eventually, there will be a crash. Hopefully, by then, I will have completed my work and be heading off somewhere else.

i stumbled across a property for sale in my neck of the woods today - S.Devon. It sold in 2001 for £237k and is now on the market for £775k. According to the BoE inflation calculator it should be £332k, for which I might consider it. So I'll continue to rent and not give a flying proverbial about the UK as a place.

The plate spinner has so many going that he is now calling upon the audience to come on stage and help.

BOMAD shovelling money into houses for their children is the way to help fund their retirement via rising prices enabling them to do more equity release. It's the only game in town with interest rates and pension annuities being so low, if they don't want to punt on shares. The government is like a croupier at a roulette table telling people they can lose on any bet except houses. What are they going to bet on?

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HOLA448
8
HOLA449

I can see it stagnating the housing market. The scheme will give false hope to those who want to sell - to hold out for what their house is 'worth' - and it will give false hope to those who think they may be able to 'afford' to buy - based upon a few who qualify for the scheme - those who find the right priced house and have the right credit conditions. The latter will be a small minority though - look at the indebtedness of the first steppers and the fact that the BOMAD is now becoming worried about funding their retirement - However, while small in number they will be sufficient to enable the press to make it look as if 'something is being done' since few commentators will bother to look at volumes.

So the damage will be stagnation to the economy as high houseprices raise the cost of living and stop people moving around. Eventually, there will be a crash. Hopefully, by then, I will have completed my work and be heading off somewhere else.

i stumbled across a property for sale in my neck of the woods today - S.Devon. It sold in 2001 for £237k and is now on the market for £775k. According to the BoE inflation calculator it should be £332k, for which I might consider it. So I'll continue to rent and not give a flying proverbial about the UK as a place.

The plate spinner has so many going that he is now calling upon the audience to come on stage and help.

But only the ones who like getting drunk on the punch bowl will be brave enough...and we know what happens next? Interesting to see this all playing out, the UK really has nothing left when house prices eventually crash?

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HOLA4410

BOMAD shovelling money into houses for their children is the way to help fund their retirement via rising prices enabling them to do more equity release. It's the only game in town with interest rates and pension annuities being so low, if they don't want to punt on shares. The government is like a croupier at a roulette table telling people they can lose on any bet except houses. What are they going to bet on?

I see BOMAD - 50-75 yr olds - as becoming a bit schizophrenic. I think a realisation is dawning that 'other' house prices aren't going to rise like they did, while of course their own property isn't going to fall, and may even buck the trend.

I think* people are becoming worried about 'themselves'. My small local pub - almost as good as a london cabbie as a bellwether of opinion, is deserted of boomers ard retired folk, a clientele that packed it out every night for the last 20 years - so much so that if you wanted to eat you had to book 2 weeks in advance or be fitted in 'as a local' after 9.30pm as the posh clientele went home. Now they have reduced their staff hours and the main customers are a few local farm lads; it's quite nice really. The pub will survive - its a free house and they should have plenty of savings.

*I may just liveinhope

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HOLA4411

Although I'm concerned about the market generally, I'm still not convinced this is anything but a token gesture.

It's a guarantee of part of the mortgage (5% buyer, 20% govt, 75% bank). What would that product currently cost the bank? 10%? In which case this is £1.2bn of free products for the banks. We don't know what the charge will be, but at least part of that £1.2bn.

It's nothing to do with FTB, or even buyers. Much like FLS/FFL, it's designed to bring down the mortgage costs for those with high LTV.

It will kill the housing market as anyone on the fringes who might have to sell, probably won't have to now.

It might support prices, but just a small addition to the massive QE, ZIRP and FLS.

It's got absolutely nothing to do with building more houses.

Sounds about right.......lowering the cost so that more can be borrowed, trying to stretch debt to the limit ....something has to eventually give at some point.

Like a rubber band. You can only stretch it so far before it comes back and smacks you in the face. ;)

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HOLA4412

Why do you say that?

Councils and Local authorities have been running the exact same scheme for 18 months now in some cases.

The whole scheme still depends on borrowers magically coming to the market, with salaries to meet the stress tested lending criteria.

And Borrowers with quality histories are becoming harder and harder to find..

The mortgage rates I saw for the council schemes aren't good value. I fear the HTB mortgages will be at lower rates.

HTB is more than an order of magnitude bigger and has had massively more publicity.

I just don't believe they will enforce strict lending criteria.

Anyway, hope I am wrong and that you turn out to have been right all along!

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HOLA4413

Heard on 6 Music news some banker has called it "the most stupid economic policy of the last 30 years".

What immediately sprung to my mind was Blackadder's comment on Caroline of Brunswick having the worst personality in Germany.

"As you can imagine, that's up against some pretty stiff competition."

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HOLA4414

Heard on 6 Music news some banker has called it "the most stupid economic policy of the last 30 years".

What immediately sprung to my mind was Blackadder's comment on Caroline of Brunswick having the worst personality in Germany.

"As you can imagine, that's up against some pretty stiff competition."

:lol::lol::lol::lol:

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HOLA4415

Well, I don't know......

If the government are throwing money at artificially rigging the housing market, who am I to stand in the way of being given an interest free loan for 5 years, after which the interest on it will be 1.75%.

I am a cash buyer with pitiful interest rates on my money and have been quite fearful of this scam for a while now, but why not take advantage of it?

I mean I can see the government are judasing me with it and screwing me around, by rigging the market, by so why not take their money and screw them back for a change?

I could get a mortgage, get their 20%, pay off my mortgage immediately, and voila!!

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HOLA4416

I agree with this. In fact sellers will actually now be able to afford to lower prices because they wont need such a high LTV for their next purchase.

And this still all relies on a wave of FTBers willing and able to join the bottom of the ponzi. As in the Cambridge illustration a few posts above, FTBers are better off with the New-Build part of the scheme. And I'm not convinced of the media myth of "pent up demand" of FTBers.

Also, as I understand it, the guarantee is not for mortgage arrears but to indemnify the lender in case of repossession and the property has lost value. So the guarantee is useless until the banks have repossessed the property. In the medium term this guarantee creates an incentive for banks to go for repossession rather than forebearance. I see a lot of unintended consequences in this scheme.

Whilst you are on to something with the change to the incentives to repossess, the first of the repossessions are unlikely to be be for at least 1 year / 18 months / 2 years (delete as applicable). So how long before the numbers become significant enough to have an impact?

The money being thrown at housing will lift prices in the short term. In 3 years time when the bubble blowing stops, the repo's could be picking up pace.

Possible perfect storm in 3 years time?? I see this as nothing more than the political game playing that Gordon so loved.... Scorched earth. Leave a horrible sh!tty mess for the next Government to clean up

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HOLA4417

Heard on 6 Music news some banker has called it "the most stupid economic policy of the last 30 years".

What immediately sprung to my mind was Blackadder's comment on Caroline of Brunswick having the worst personality in Germany.

"As you can imagine, that's up against some pretty stiff competition."

:lol::lol:

Saw a tweet this morning that suggested that even the Institute of Directors regard #helptobuy as "dangerous" but no link to confirm as yet.

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HOLA4418

Well, I don't know......

If the government are throwing money at artificially rigging the housing market, who am I to stand in the way of being given an interest free loan for 5 years, after which the interest on it will be 1.75%.

I am a cash buyer with pitiful interest rates on my money and have been quite fearful of this scam for a while now, but why not take advantage of it?

I mean I can see the government are judasing me with it and screwing me around, by rigging the market, by so why not take their money and screw them back for a change?

I could get a mortgage, get their 20%, pay off my mortgage immediately, and voila!!

You better hurry, cos the scheme of which you speak is already running and flying off the shelves.

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HOLA4419

Whilst you are on to something with the change to the incentives to repossess, the first of the repossessions are unlikely to be be for at least 1 year / 18 months / 2 years (delete as applicable). So how long before the numbers become significant enough to have an impact?

The money being thrown at housing will lift prices in the short term. In 3 years time when the bubble blowing stops, the repo's could be picking up pace.

Possible perfect storm in 3 years time?? I see this as nothing more than the political game playing that Gordon so loved.... Scorched earth. Leave a horrible sh!tty mess for the next Government to clean up

money has been thrown at the market since last year...prices are not rising.

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HOLA4420

:lol::lol:

Saw a tweet this morning that suggested that even the Institute of Directors regard #helptobuy as "dangerous" but no link to confirm as yet.

I'm surprised it was mentioned on 6 music news as it seems to be a pretty old comment from what I can tell.

Gruaniad 4th June - http://www.guardian....-to-buy-moronic

George Osborne's scheme to boost the housing market through state mortgage subsidies has been dubbed one of the "most stupid economic ideas" of the past 30 years by a leading City commentator.

Albert Edwards, who heads the global strategy team at Société Générale said the chancellor's flagship Help to Buy programme was artificially inflating property prices and driving young people deeper into "indentured servitude".

Perhaps there's a consensus building up against it. But I wouldn't build any hope it will make any difference. Gidiot is desperate.

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HOLA4421

I'm surprised it was mentioned on 6 music news as it seems to be a pretty old comment from what I can tell.

Gruaniad 4th June - http://www.guardian....-to-buy-moronic

Perhaps there's a consensus building up against it. But I wouldn't build any hope it will make any difference. Gidiot is desperate.

If people won`t borrow help to buy will make little difference IMO.

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HOLA4422

Whilst you are on to something with the change to the incentives to repossess, the first of the repossessions are unlikely to be be for at least 1 year / 18 months / 2 years (delete as applicable). So how long before the numbers become significant enough to have an impact?

The money being thrown at housing will lift prices in the short term. In 3 years time when the bubble blowing stops, the repo's could be picking up pace.

Possible perfect storm in 3 years time?? I see this as nothing more than the political game playing that Gordon so loved.... Scorched earth. Leave a horrible sh!tty mess for the next Government to clean up

You have to remember that Gordon was playing during a massive global credit boom, comparing this to that is like comparing a Cup final to a game of five-a-side with Gidiot in goal between two jumpers.

Edited by dances with sheeple
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HOLA4423

If people won`t borrow help to buy will make little difference IMO.

Hopefully.

But once the mechanism is in place it will be easy to ratchet it up.

Can see a type of Dutch Auction where Labor will say "5% is ridiculous amount for hard-working families to stump up - we'll make it deposit-free."

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HOLA4424

Hopefully.

But once the mechanism is in place it will be easy to ratchet it up.

Can see a type of Dutch Auction where Labor will say "5% is ridiculous amount for hard-working families to stump up - we'll make it deposit-free."

IMO US rate rises, EZ, China, bond markets etc etc will put limits on their stupidity, this won`t fly far, not anything like what would be required to re-start the bubble. Sentiment is key, although many on here say "Oh the sheeple would still borrow massively in a heartbeat" I believe many have seen what happens when the music stops, and are much more wary than they would have been.

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HOLA4425

money has been thrown at the market since last year...prices are not rising.

But now they will throw it at people who havent had to save a big deposit.

My opinion, and quite a simplistic rule, but it applies to almost anything you buy. The harder you have to work to earn the money to buy something, the more careful you are.

When the govt stumps up a deposit, people are less careful. See the volumes sold for new build HTB. Lots of new builds near us have struggled for ages. Property bee has shown the builders putting up prices, and still they sell all their plots very quickly.

If you are buying a house, you simply need to offer more than the next highest bidder. This has created a 2 tier market where those with unearned equity will pay silly money, but generally at the higher end of the market.

At the lower end, people who have had to save their 10% plus are much more cautious about buying, and will negotiate. As a result prices in my area at the bottom end of the market have fallen consistently since the short lived the dead cat bounce in spring 2009.

However a new breed of buyer is about to be set free. I expect the lower end will be pumped up.

Edited by Caveat Mortgagor
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