MAIN HELP TO BUY MARK2 THREAD -

[The Knimbies who say No]

Yes, I'd also expect it to be much lower than 4.5% – 5% for a 2-year 95% LTV.

I imagine one thing the govt is counting on is that HTB2 will result in a significant rise in transactions, in which case (as they see it) the guarantees are being partly covered by an increase in stamp duty receipts.

The costs that the guarantee covers must potentially be fairly open-ended if a policy of forbearance is practised on HTB2 loans. Will lenders be obliged to comply with a particular process/timescale in order to limit potential losses on HTB2 loans gone bad?

I'm amazed that so few details are available as yet.

Edited October 1, 2013 by The B.L.T.

[Wurzel Of Highbridge]

The whole help to buy scheme is about maintaining the boomers 'investment' - My pension is my house.

Plain and simple, there is no more to it than that.

for many, many years the government and media has tricked that generation into believe that the aging property they own can be used as a savings and investment vehicle.

Many of the key area votes lye with this group and the government is trying to appease them by shoveling policies that are obviously going to inflate the value of their assets. The beauty of this policy is they can then turn to the priced out generation and say it's for your own good.

[Bloo Loo]

The whole help to buy scheme is about maintaining the boomers 'investment' - My pension is my house.

Plain and simple, there is no more to it than that.

for many, many years the government and media has tricked that generation into believe that the aging property they own can be used as a savings and investment vehicle.

Many of the key area votes lye with this group and the government is trying to appease them by shoveling policies that are obviously going to inflate the value of their assets. The beauty of this policy is they can then turn to the priced out generation and say it's for your own good.

That could be an aim, but I doubt it very much...its all about Lending and asset values....a bank lends based on its capital base, AND its likely ability to recover in the event of default...the more defaults likely, the more the value of the security comes into play...so, a fall in house prices hurts the ability of banks to lend.

The gun to the head of the Government is that this itself will cause a general collapse as lending falls, investment is halted and jobs are curtailed.

Of course, Deflation would fix all the above as entitlements under the current methods would become unpayable, and the new entitlements would be that which you actually paid for with production....this is bad for Public Sector...and we cant have a government shutdown....that would reveal how little we would miss them.

In addition, imputed rent, a not insubstantial component of GDP, is a function of house prices. HUZZAH!

[Wurzel Of Highbridge]

That could be an aim, but I doubt it very much...its all about Lending and asset values....a bank lends based on its capital base, AND its likely ability to recover in the event of default...the more defaults likely, the more the value of the security comes into play...so, a fall in house prices hurts the ability of banks to lend.

The gun to the head of the Government is that this itself will cause a general collapse as lending falls, investment is halted and jobs are curtailed.

Of course, Deflation would fix all the above as entitlements under the current methods would become unpayable, and the new entitlements would be that which you actually paid for with production....this is bad for Public Sector...and we cant have a government shutdown....that would reveal how little we would miss them.

In addition, imputed rent, a not insubstantial component of GDP, is a function of house prices. HUZZAH!

Good valid points!

As with most issues, there are a number of reasons asset and property values are kept propped up by governments at the expense of the host country.

I guess it is just a part of capitalism, which I guess must ultimately adapt or fail.

[btl_hater]

The whole help to buy scheme is about maintaining the boomers 'investment' - My pension is my house.

Plain and simple, there is no more to it than that.

for many, many years the government and media has tricked that generation into believe that the aging property they own can be used as a savings and investment vehicle.

Many of the key area votes lye with this group and the government is trying to appease them by shoveling policies that are obviously going to inflate the value of their assets. The beauty of this policy is they can then turn to the priced out generation and say it's for your own good.

This is my suspicion too. But then, I think, who else would the greedy boomers (as not all are thick/greedy) ever vote for anyway?

[Bloo Loo]

This is my suspicion too. But then, I think, who else would the greedy boomers (as not all are thick/greedy) ever vote for anyway?

Hold on, Nulab were trying desperatelyto gain favour in the City...they wanted to become the party of Prudence and Aspiration...and guess how they attempted it...let rip with City Crime and spend spend spend via PFI.

No, its not just a Tory thing, its the ONE PARTY STATE thing we currently have....they only have one way to impress the bankers...make them richer.

[gf3]

The whole help to buy scheme is about maintaining the boomers 'investment' - My pension is my house.

Plain and simple, there is no more to it than that.

I disagree. I don't care what my house is worth or whether it is going up or down.

If there were a market for body organs you may find you were worth a million pound.

Would you feel elated if you heart went up by £1000 today?

Would you feel down in the dumps if your guts dropped tomorrow?

We all have to live somewhere

Edited October 1, 2013 by gf3

[happy_renting]

I disagree. I don't care what my house is worth or whether it is going up or down.

If there were a market for body organs you may find you were worth a million pound.

Would you feel elated if you heart went up by £1000 today?

Would you feel down in the dumps if your guts dropped tomorrow?

We all have to live somewhere

Good point.

Why can't First Time Buyers sell a kidney to raise the deposit?

[billybong]

You can guess whether he was picked on on this point by the interviewer...

Yesterday the footballers were given more searching interviews.

Edited October 1, 2013 by billybong

[FreeTrader]

For reference here's the Canada Mortgage and Housing Corporation (CMHC) fee table for mortgage insurance:

http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

In Canada mortgage insurance must be taken by a lender where the LTV is greater than 80%. The lender will then usually pass this cost on to the borrower, either as a straight fee or it will be added to the loan.

The maximum amortisation period for a >80% LTV insured loan is 25 years and the max purchase price of the home is 1m CAD (~£600,000). There are affordability criteria too (for example, the borrower must demonstrate ability to repay at a 5-year fix interest rate, even if he/she is taking a 2-year fix at a lower rate).

CMHC's insurance can't be directly compared with HTB2 guarantees because (AFAIK) the cover exists for the duration of the loan and also the full amount of the loan is covered. The HTB2 guarantee will only last 7 years, and only covers 95% of the portion of the loan above 80% LTV (the govt is requiring lenders to take a 5% hit on any losses to make sure they have some skin in the game when assessing ability to repay).

Nevertheless, on a repayment mortgage, after 7 years the lender's risk is very much lessened due to the reduction in outstanding loan balance (assuming the borrower hasn't remortgaged to extract equity, which in Canada is not allowed above 80% LTV).

--------------------

In Australia, Lenders Mortgage Insurance (LMI) is required above 80% LTV. Rates are on a sliding scale.

These are the results I got from Genworth's LMI calculator:

http://www.genworth.com.au/borrower-centre/homebuyer-tools/lmi-premium-estimator/

[Wurzel Of Highbridge]

I disagree. I don't care what my house is worth or whether it is going up or down.

If there were a market for body organs you may find you were worth a million pound.

Would you feel elated if you heart went up by £1000 today?

Would you feel down in the dumps if your guts dropped tomorrow?

We all have to live somewhere

Is 'you house your pension' ? I thought not, but how many do you know who genuinely think that?

[The Masked Tulip]

Just had my letting agency 3 monthly inspection. Chatting with the EA who did it and he claimed that house prices have gone up 3% in Swansea West this year.

Edit:

When I suggested that things would come crashing down he said that the BOE had everything under control.

Edited October 1, 2013 by The Masked Tulip

[FreeTrader]

Cameron was interviewed by Sarah Montague on Today this morning and when questioned about the almost universal criticism directed towards HTB he told her that she needed to get out more and listen to what ordinary people who cannot get a mortgage are saying about housing.

http://www.bbc.co.uk/programmes/b03bqw3x#programme-broadcasts (Cameron gives his views on HTB at 2:15.21)

[winkie]

Is 'you house your pension' ? I thought not, but how many do you know who genuinely think that?

You can't eat bricks.......a house you live in doesn't pay you a monthly income, try re-mortgaging to withdraw equity from your home on a basic work or state retirement pension that hardly pays enough to put food on the table, council taxes and keep the place warm never mind pay a mortgage as well........you may when on your last legs get a loan that gives you something back at the end at a high cost then takes the property off your hands when you are sure to no longer need it.

[19 year mortgage 8itch]

Cameron was interviewed by Sarah Montague on Today this morning and when questioned about the almost universal criticism directed towards HTB he told her that she needed to get out more and listen to what ordinary people who cannot get a mortgage are saying about housing.

http://www.bbc.co.uk/programmes/b03bqw3x#programme-broadcasts (Cameron gives his views on HTB at 2:15.21)

Cameron telling a BBC journo she's out of touch?

Estate agent on sunday? ******ing comedian on Tuesday.

See YOU next tuesday, Mr Cameron.

Edited October 1, 2013 by 7 Year Itch

[zugzwang]

Just had my letting agency 3 monthly inspection. Chatting with the EA who did it and he claimed that house prices have gone up 3% in Swansea West this year.

Edit:

When I suggested that things would come crashing down he said that the BOE had everything under control.

Just like they did in 2008?

[cybernoid]

Cameron was interviewed by Sarah Montague on Today this morning and when questioned about the almost universal criticism directed towards HTB he told her that she needed to get out more and listen to what ordinary people who cannot get a mortgage are saying about housing.

http://www.bbc.co.uk/programmes/b03bqw3x#programme-broadcasts (Cameron gives his views on HTB at 2:15.21)

Are they saying houses cost too much? That what Im saying. Thats what everyone I know who doesn't own a mortgage is saying as well. Ive not heard anyone saying they'd like much more debt please.

[zugzwang]

Cameron telling a BBC journo she's out of touch?

Estate agent on sunday? ******ing comedian on Tuesday.

See YOU next tuesday, Mr Cameron.

Ordinary people? Every person I know who can't get a mortgage thinks prices are too f***ing high!

[The Masked Tulip]

Just like they did in 2008?

Oddly enough, that was my exact response.

[btl_hater]

Cameron was interviewed by Sarah Montague on Today this morning and when questioned about the almost universal criticism directed towards HTB he told her that she needed to get out more and listen to what ordinary people who cannot get a mortgage are saying about housing.

http://www.bbc.co.uk/programmes/b03bqw3x#programme-broadcasts (Cameron gives his views on HTB at 2:15.21)

Haha, what a liar.

[The Knimbies who say No]

Ordinary people? Every person I know who can't get a mortgage thinks prices are too f***ing high!

Likewise, even the ones who are actually buying are incredulous at prices.

I even wrote to my MP to tell him precisely that.

Cameron thinks this policy is a vote winner a la Brown, but he's wrong. Hugely so.

Has anyone actually seen or heard anyone talk about HTB as a great idea? The only people I can find are on the Twitter feed or journos whose motives are opaque.

Edited October 1, 2013 by The B.L.T.

[DTMark]

You can't eat bricks.......a house you live in doesn't pay you a monthly income, try re-mortgaging to withdraw equity from your home on a basic work or state retirement pension that hardly pays enough to put food on the table, council taxes and keep the place warm never mind pay a mortgage as well........you may when on your last legs get a loan that gives you something back at the end at a high cost then takes the property off your hands when you are sure to no longer need it.

And that's it.

As it stands, the government has its eyes on all the "equity" in property.

It's "wasted" and could be put to productive use if it were converted back to fiat.

And at the same time, those sitting on that equity are going to want care and become a net drain on the government's coffers.

Since we think that mathematically, because of demographics, this cannot work in the end, and because the idea of importing millions of low paid workers doesn't sit very well with that particular demographic class - who again are the voters - the most palatable option is to prop up the value of the boomers' homes so that their equity is taken back from them ("equity release") and they go to their grave with nothing.

Some of it goes to the kids to put buy their house - so the debt circle can go round again (a bit like a sort of re-hypothecation) and some of it goes on care. Hurrah. That's the pensions problem solved. More stamp duty for the government. More new debt to help out with the GDP and keep the banks going.

The boomers won't be happy about this "I worked for my house" but in reality nobody "worked" for the equity anyway. It's a way of presenting a "grab" as a "giveaway that we can all participate in".

Some of the effects of this:

Housing boom sparks inheritance tax haul

Older home owners struggle to switch to new mortgage

Grandparents own almost half the equity locked in British homes

At one time I did wonder to myself if those who create new money eventually end up owning all the assets it finances.

[winkie]

And that's it.

As it stands, the government has its eyes on all the "equity" in property.

It's "wasted" and could be put to productive use if it were converted back to fiat.

And at the same time, those sitting on that equity are going to want care and become a net drain on the government's coffers.

Since we think that mathematically, because of demographics, this cannot work in the end, and because the idea of importing millions of low paid workers doesn't sit very well with that particular demographic class - who again are the voters - the most palatable option is to prop up the value of the boomers' homes so that their equity is taken back from them ("equity release") and they go to their grave with nothing.

Some of it goes to the kids to put buy their house - so the debt circle can go round again (a bit like a sort of re-hypothecation) and some of it goes on care. Hurrah. That's the pensions problem solved. More stamp duty for the government. More new debt to help out with the GDP and keep the banks going.

The boomers won't be happy about this "I worked for my house" but in reality nobody "worked" for the equity anyway. It's a way of presenting a "grab" as a "giveaway that we can all participate in".

Some of the effects of this:

Housing boom sparks inheritance tax haul

Older home owners struggle to switch to new mortgage

Grandparents own almost half the equity locked in British homes

At one time I did wonder to myself if those who create new money eventually end up owning all the assets it finances.

This.

[Maynardgravy]

I disagree. I don't care what my house is worth or whether it is going up or down.

If there were a market for body organs you may find you were worth a million pound.

Would you feel elated if you heart went up by £1000 today?

Would you feel down in the dumps if your guts dropped tomorrow?

We all have to live somewhere

Brilliant!

[rantnrave]

Any news on whether those banks which opened late were swamped with people?