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Calls For Ministers To Pull Help To Buy Out Of Booming London

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The controversial Help to Buy mortgage scheme should either be totally abandoned or scaled back in London.

The calls have come independently from buy-to-let specialist Assetz, and from website Home.co.uk.

Both say that support for the housing market in London is simply not needed and could prove damaging. Assetz believes that the South-East should also be excluded from Help to Buy.

Doug Shephard, director of Home.co.uk, said: “Policy makers need to treat London separately to the rest of the UK.”

He said that London “clearly needs no extra stimulus and is running too hot already”.

If the Government does go ahead with its plans, Assetz says that Help to Buy will simply drive up demand, but not supply, meaning that house prices will continue to surge.

This month, the Office of National Statistics showed that annually, house prices rose 8.1% in London. However, across the UK outside London and the South-East, prices went up by only 1%.

Stuart Law, CEO of Assetz, said: “What commentators should be pointing toward is the easing off of support for London house prices by abandoning Help to Buy in London and the South-East.

“The Government also needs to ensure the acceleration of construction in these regions through encouraging more aggressive planning policy in the South.”

Shephard said: “The strong property market recovery, post-crisis, evident in London and the South-East, has not been mirrored in other regions. House prices across the North are still below their 2008 levels and markets remain lacklustre.

“Moreover, the gap is widening and this trend is effectively centralising the bulk of the UK’s property wealth in London and the South,East.

“A huge surge in London property prices is well under way and shows no signs of slowing down. The average asking price for a property within Greater London now stands at £389,025, a rise of 6.8% in the last six months alone.

“Such growth and further relentless demand all point towards an overheating market. Despite this, the UK government and Bank of England are continuing their support for mortgage lending and loose monetary policies.

“Property prices in London are higher than ever before and the market in the capital bears little resemblance to the rest of the country. Property in the surrounding South-East has performed reasonably well, yet the price differential is still dwarfed by London’s super-premium pricing.”

He added: “Only time will tell if the market will overheat and naturally realign prices in the process. However, the concern is that, if the capital’s property bubble does burst, it may well shake the confidence of the wider market.”

The first phase of Help to Buy was launched in April and takes the form of a shared equity scheme, available to purchasers with just 5% deposits on new-build homes only.

The second phase is due to launch in January and will be available to purchasers with the same small deposits on both new and existing housing stock. It will take the form of a mortgage indemnity, to encourage lenders to lend 95% mortgages.

Calls for ministers to pull Help to Buy out of booming London

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HtB was designed for London that's why the limit is £600,000. People outside London buying a 600k would IMHO not need help as in most towns and cities a 600k property is a detached house with tennis courts etc not a new build two bed flat.

erm, you should get out more

2 bed terraced a snip at £750k

Or a littke cheaper at £545k

Or something in need of modernisation

Edited by LiveinHope

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Hmm, perhaps the UK tax payer should help me buy a mansion in a cheaper part of the UK?

In theory I could get a 600k loan with 30k down - ok, then get a 10 year fixed at 75% of 600k (Teachers Building Society

2.39% 3 years discounted) would be £1,994.

Government guaranteed house price inflation = lots of juicy profit after 3 years when I flip it on the next government scheme to some other mug.

You would have to be a fool to turn this offer down.

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Sure there are expensive properties all over the country. But I was wondering why the taxpayer should be underwriting the purchase of for example this property

http://www.rightmove.co.uk/property-for-sale/property-41392739.html?premiumA=true a five bed detached or

http://www.rightmove.co.uk/property-for-sale/property-39295201.html or

http://www.rightmove.co.uk/property-for-sale/property-38821438.html

Quite, the tax payer shouldn't be helping anyone to either buy a house or stay in one they can no longer afford, in most cases.

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The chancellor was also asked by MPs about the effects of his Help To Buy scheme, which aims to help those who want to buy a house but are only able to put down a small deposit. Committee chair Andrew Tyrie suggested he was "adding vodka to the punch bowl just as the party gets going".

Mr Osborne said: "The early evidence from Help to Buy is that three-quarters of those taken out are not living in London and the South East.

"The average house purchase that they have been looking for is £160,000, that's below the national average. In other words, it is dealing with exactly the families we want it to help."

Yesterday (towards end of the article): http://www.bbc.co.uk/news/business-25349236

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The average house purchase that they have been looking for is £160,000, that's below the national average.

No, that's more than 25% above the national average price paid for a first home (according to This recentish telegraph link)

How can they get away with such transparent lies?

Edited by (Blizzard)

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Yesterday (towards end of the article): http://www.bbc.co.uk/news/business-25349236

"Families", what a crock. Osborne et al are very careful to use the word 'families' whenever HTB is being discussed.

The crowd standing behind Cameron in Downing St. a couple of months ago, and the vast majority of the people in the HTB case studies, are young couples with no children.

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No, that's more than 25% above the national average price paid for a first home (according to This recentish telegraph link)

How can they get away with such transparent lies?

Because its the second time buyers who need the help. The first time buyers will realise they're ******ed too in a couple of years and HTB3 will come along, guaranteeing 40% of the purchase. Allpw long them and the now third time buyers to move up the ladder.

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But who and their friends have properties in london lol. Would be like turkeys voting for xmas.

Indeed they might be voting their own equities down. But as far as the rest of the population in London goes, they would return a Labour Government everytime, be it with the Liberals holding the balance of the power.

http://data.london.gov.uk/visualisations/atlas/general-election-2010/atlas.html

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Because its the second time buyers who need the help. The first time buyers will realise they're ******ed too in a couple of years and HTB3 will come along, guaranteeing 40% of the purchase. Allpw long them and the now third time buyers to move up the ladder.

It's the boomer nimby southern Tory voter at the end of the chain who needs the help.

How else can they monetise their investment?

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What struggling families really need is lower cost housing. The sooner Osborne's market-defying subsidies are withdrawn the sooner that end will be met.

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It's the boomer nimby southern Tory voter at the end of the chain who needs the help.

How else can they monetise their investment?

buy whippets and pigeons like you lot do of course....ecky thomp!

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It's the boomer nimby southern Tory voter at the end of the chain who needs the help.

How else can they monetise their investment?

Everyone in the chain needs the help. No one has anywhere to hide if it goes wrong.

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He's helping no one by the rich and the bankers.

Our leaders are a disgrace.

+1

They're helping the people like the property developers Osborne made a "keynote" speech to on 9 September 2013.

That speech was at

1 Commercial Street in London.

a property development under construction.

https://

www.gov.uk/government/speeches/chancellor-speech-on-the-economy

Doing a search the development is well covered in the media

Edited by billybong

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So how would this work?

If you happen to live and work in the south you will be specifically excluded from a scheme to which you are contributing via your taxes?

Given the southern bias of Tory support this idea has zero chance of happening.

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