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Help To Buy (Htb) 2014 To Kill 2013 House Prices?

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January 1st 2014 the latest stage of help to buy starts. A government guarantee to provide up to a 20% deposit to anyone with a 5% deposit who is looking to buy their sole residency, whether new or old build.

I think the consensus is that the HTB scheme will not only support house prices in 2014 but will inevitably lead to house price increases in 2014.

Clearly the anticipation of the 2014 HTB is currently influencing the behaviour of buyers and sellers in the 2013 scottish property market.

Here's my theory:

First time buyers who can afford a mortgage will buy in 2013 and will not put it off until 2014 as they expect first time buyer prices to increase in 2014. However this first time buyer market in 2013 will still be at historically low levels.

For the remainder of 2013 I think you will see an increase in second steppers putting their houses up for sale. Indeed anyone moving up the property ladder may be best advised to sell in 2013 and thus be able to buy in 2013 their upsized property.

Why would someone upsizing their property wait to act in 2014 when house prices will be higher and they will be relatively worse off. For example they sell a house in 2014 for say 130000 which has an annual increase of 5 % and buy a house for 250000 which has also increased 5% annually.

Of course their should be an increase in cash buyers in 2013, particularly buy to letters, if the expectation is for rising prices in 2014. This should help to support the mid and upper rung of the property market in 2013

However towards the bottom of the property market my view is that the HTB will see buyer numbers increase a little in later 2013 but any increase in buyers will be more than offset by an increase in sellers. I expect a dip in house prices over next 4 months in the first time buyer and second stepper market.

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This would be plausible if supply and demand were the only factors.

However it ignores the effect of 'confidence' - rising market sentiment - and the relatively short timescale.

There simply won't be time for newly listing sellers to get properly disillusioned before support kicks in. Therefore no 'forced' price drops.

I see nothing possible (barring black swan internal or external events) other than rising prices right into the election period.

What happens after that of course is open to debate.

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January 1st 2014 the latest stage of help to buy starts. A government guarantee to provide up to a 20% deposit to anyone with a 5% deposit who is looking to buy their sole residency, whether new or old build.

I think the consensus is that the HTB scheme will not only support house prices in 2014 but will inevitably lead to house price increases in 2014.

Clearly the anticipation of the 2014 HTB is currently influencing the behaviour of buyers and sellers in the 2013 scottish property market.

Here's my theory:

First time buyers who can afford a mortgage will buy in 2013 and will not put it off until 2014 as they expect first time buyer prices to increase in 2014. However this first time buyer market in 2013 will still be at historically low levels.

For the remainder of 2013 I think you will see an increase in second steppers putting their houses up for sale. Indeed anyone moving up the property ladder may be best advised to sell in 2013 and thus be able to buy in 2013 their upsized property.

Why would someone upsizing their property wait to act in 2014 when house prices will be higher and they will be relatively worse off. For example they sell a house in 2014 for say 130000 which has an annual increase of 5 % and buy a house for 250000 which has also increased 5% annually.

Of course their should be an increase in cash buyers in 2013, particularly buy to letters, if the expectation is for rising prices in 2014. This should help to support the mid and upper rung of the property market in 2013

However towards the bottom of the property market my view is that the HTB will see buyer numbers increase a little in later 2013 but any increase in buyers will be more than offset by an increase in sellers. I expect a dip in house prices over next 4 months in the first time buyer and second stepper market.

The second part of Help to Buy is not an Equity Loan as applies to newbuild properties currently. It is a 'Mortgage Guarantee', which means that the lender offsets some of the risk of issueing a HTB borrower with a high LTV loan by buying an insurance policy from the government to cover losses on up to 15% of the property value.

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I need a definitive answer on whether this 'mortgage guarantee' scheme is available in Scotland in exactly the same form as England. I thought it was, but..................

Anyone know??

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https://www.gov.uk/affordable-home-ownership-schemes/overview

You may be able to get financial help through a Help to Buy home ownership scheme if you live in England and can’t afford to buy a home.

Wales and Scotland have different schemes.

The 4 types of Help to Buy scheme are:

Help to Buy equity loans

shared ownership

NewBuy

Help to Buy mortgage guarantees - available from January 2014

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I've scanned the internet. My conclusion is that the mortgage guarantee component of the Help to Buy scheme will commence 1st January 2014 in Scotland just as it will in England.

Has anyone got any conclusive proof that this isn't the case.???

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  • 238 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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