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Damik

Help To Buy 2 And Foreign Speculators

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I am just checking how the Help To Buy can be used for pure speculation:

- foreign buyer in some lawless country

- bying only with 5% deposit in London

- waiting 1 year to make quick 15% profit (based on London price hikes)

- selling up (perhaps to a friend for over inflated price)

- ideally taking the money before paying stamp duty if possible

- we have a quick and clean at least 300% profit

- if they take a runner both guys are untachable by UK law

- or we can do the same thing with some UK unemployed citizens used as the "white horses"

or do I miss anything?

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I am just checking how the Help To Buy can be used for pure speculation:

- foreign buyer in some lawless country

- bying only with 5% deposit in London

- waiting 1 year to make quick 15% profit (based on London price hikes)

- selling up (perhaps to a friend for over inflated price)

- ideally taking the money before paying stamp duty if possible

- we have a quick and clean at least 300% profit

- if they take a runner both guys are untachable by UK law

- or we can do the same thing with some UK unemployed citizens used as the "white horses"

or do I miss anything?

Yes. London is less about profit, more about laundering cash.

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I am just checking how the Help To Buy can be used for pure speculation:

- foreign buyer in some lawless country

- bying only with 5% deposit in London

- waiting 1 year to make quick 15% profit (based on London price hikes)

- selling up (perhaps to a friend for over inflated price)

- ideally taking the money before paying stamp duty if possible

- we have a quick and clean at least 300% profit

- if they take a runner both guys are untachable by UK law

- or we can do the same thing with some UK unemployed citizens used as the "white horses"

or do I miss anything?

I don't think Help to Buy is open to overseas residents.

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Yes. London is less about profit, more about laundering cash.

the problem is that with 20% deposit the UK banks and tax payers are safe; as you do not want to loose 20%

with 5% there is no risk and pure speculation plus fraud can and will emerge immediately

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prices wont rise 15%...why arent they 15% higher already if people could afford them

and you STILL have to meet the affordability criteria..just as you did last Friday...indeed, you have to earn MORE to get the full mortgage they say you need....Unless, of course, the banks are going to accept LIAR loans again.

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The banks only need to worry about getting 80% of the loan back rather than 95% so they can have more flexibility on the affordability criteria.

If the affordability criteria were locked in stone and the person signing off the loan was personally responsible for the cash short fall it might be different, but that will never happen.

the CSA are supposed to have tightened up on lending affordability.....that means if they sold a loan which you couldnt afford, there would be some kind of sanction.

so, in principle, regardless of the guarantee, the same borrower should be able to borrow more next week than he could last week.

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Nope. That is the US you are thinking of. We let everyone in.

The paranoia is strong in this thread. Can you point to the legislation that buying a property in the UK provides automatic residency? The last I saw was that investing >£1m gave you more points for immigration but was not automatic. Spain OTOH floated the idea of automatic residency based on buying a property over a certain value.

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Look, these are politcians we are talking about.

It makes no difference what restrictions they put in place or what they say in sound-bites and speeches.

A few years from now we will discover that his scheme has been used to provide mortgages for foreigners, buy to let landlords, people who already own properties, etc, etc.

That is how this country works. There will then be an outcry in the media for a day or so. TV journalists will have orgasms over it and the politicians will deny that they knew anything about it. They will all blame the bankers but no one will be held accountable.

This is Britain for feck's sake. Snouts in the trough and welcome in Johnny Foreigner, we will ignore all the nasty things you have done if you buy up loads of property and put all your money in our banks.

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You cannot discriminate against an EU national, that is true but they will have to be UK residents to qualify for the scheme. Which I think is what Camprvan wanted to know.

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Look, these are politcians we are talking about.

It makes no difference what restrictions they put in place or what they say in sound-bites and speeches.

A few years from now we will discover that his scheme has been used to provide mortgages for foreigners, buy to let landlords, people who already own properties, etc, etc.

That is how this country works. There will then be an outcry in the media for a day or so. TV journalists will have orgasms over it and the politicians will deny that they knew anything about it. They will all blame the bankers but no one will be held accountable.

This is Britain for feck's sake. Snouts in the trough and welcome in Johnny Foreigner, we will ignore all the nasty things you have done if you buy up loads of property and put all your money in our banks.

The government are not providing mortgages to foreigners.

Banks are doing the lending...

Sure, you can follow the money to a foreign buyer from a bank bail out of some kind, but that applies to every financial "product" ever sold.

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As I understand it, the foreign buyers that have pushed up prime London prices are seeking a safe haven for their cash. I doubt that many would be wanting a mortgage.

exactement

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In theory, I could get a mortgage on a UK property with 5% down, then let it out.

If it goes tits up, then chase me for it :-)

The problem is it is almost impossible to get a mortgage on UK property if you are outside the UK - google ex-pat mortgages and you will find just one or two banks offering them under conditions.

Currently - there is little to worry about, however if the range and number of ex-pat mortgages are increased then worry.

I think the UK is now at a point where it has sold off everything apart from the roads and hospitals, the prime houses have now been sold off that if for sure.

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In theory, I could get a mortgage on a UK property with 5% down, then let it out.

If it goes tits up, then chase me for it :-)

The problem is it is almost impossible to get a mortgage on UK property if you are outside the UK - google ex-pat mortgages and you will find just one or two banks offering them under conditions.

Currently - there is little to worry about, however if the range and number of ex-pat mortgages are increased then worry.

I think the UK is now at a point where it has sold off everything apart from the roads and hospitals, the prime houses have now been sold off that if for sure.

are you really sure ??? 2/3 of London new builds are bought by foreign buyers. can you please confirm?

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are you really sure ??? 2/3 of London new builds are bought by foreign buyers. can you please confirm?

They're paying with cash. Now that cash might be borrowed from all manner of offshore banks and probably in many cases via China's shadow banking system. However, the government isn't going to back those loans. (Well, if when China's shadow banking system goes toes-up, we'll probably find the usual suspects over here have had their hand in the cookie jar and will demand bailouts, but that isn't going to be via H2B).

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They're paying with cash. Now that cash might be borrowed from all manner of offshore banks and probably in many cases via China's shadow banking system. However, the government isn't going to back those loans. (Well, if when China's shadow banking system goes toes-up, we'll probably find the usual suspects over here have had their hand in the cookie jar and will demand bailouts, but that isn't going to be via H2B).

Roger that. I hope that London will pop up in next 6 months from the top. Like Dubai. Waiting from 2006 and wife is getting itchy ... ;(

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I don't think Help to Buy is open to overseas residents.

Yes- and the banks have an excellent track record of following the rules in such matters as mortgage lending and associated activities.

Ok- that was a joke. :D

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exactement

It staggers me just how many times this point is forgotten. People simply live in the past and yet the world is changing at a ferocious pace outside their front doors.

Most foreigners I know with properties in the UK have no mortgage and don't see property in the same way the UK popn do. They see it as a long term store of wealth, for this and future generations. I know several Indian friends who are buying up flats and houses in West London, Paddington and Ealing seem to be very popular hot spots at the moment. They are buying for their kids and their grand kids. Somewhere for the kids to stay when they visit the UK to see families or even to study. The money to buy houses in the UK is mainly inherited or driven by land and property sales in India so the cash profit has been realised and deposited. Absolutely no interest in taking out mortgages, just buy cash.

The property pool in prime areas for foreigners (main towns and cities with existing foreign populations) is actually very small compared with the potential demand from overseas (ignoring any domestic demand). There are around 120m SEC A & B Indians (top 2 tiers of Indian socio economic strati) of which around 1-2% would be considered to be seriously wealthy (equating to -1% of total Indian popn). Add Russia, China, Hong Kong, Southern Europe, Middle East).. and you get say a population of say 20-30m people who currently (ignoring that this number is growing fast) possibly interested in having a bolt hole in the UK..

How many properties are there in the UK ? How many desirable properties ? (about 25m properties... about 10-20% desirable ? ).....

Hence as long as there is no restriction to foreign owners buying up more and more of the (fixed) UK property real estate, I sense HPI on desirable UK properties will continue for a long long time. Sadly as I have kids who one day I would like to see own a property of their own.

So.. would stopping foreign purchasers from getting mortgages stifle HPI

Not on your nelly

Edited by thefruits

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