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Help To Buy Damp Squid?

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First surveys in...

Aspiring first-time buyers are confused by the Help to Buy scheme.

A poll by discount website VoucherCodesPro.co.uk attracted responses from 1,825 adults, each planning to become a first-time buyer within the next 12 months.

The poll was prompted by an increase in searches on the site for ‘help to buy’, suggesting a lot of interest in the scheme.

Of those who took part, respondents who said they were unsure about what both the Help to Buy schemes entailed were shown an explanatory guide.

When asked how they felt about the concept on the whole, 71% claimed to find it ‘confusing’. And 24% said they were disappointed with the Help to Buy offering.

Those who said they were disappointed were asked to elaborate and explain why. One third (32%) said that phase one of Help to Buy – the shared equity mortgage available on new-builds – sounded like a ‘glorified loan’, while 66% said that on phase two, mortgage rates weren’t as low as they were expecting.

When asked if they planned to utilise Help to Buy, just 19% said a definite ‘yes’.

Aspiring first-timers struggle to get to grips with Help to Buy

[tongueincheek]

The full report mentions that 97% of respondents were shocked to discover they had to pay the 20% back. "So it's not free money after all then," was one disgruntled comment...[/tongueincheek]

Looks like Dave and George will have to find something else to bring in the votes... :ph34r:

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First surveys in...

Aspiring first-timers struggle to get to grips with Help to Buy

[tongueincheek]

The full report mentions that 97% of respondents were shocked to discover they had to pay the 20% back. "So it's not free money after all then," was one disgruntled comment...[/tongueincheek]

Looks like Dave and George will have to find something else to bring in the votes... :ph34r:

When people call the scheme "Help to Sell", they are not merely being sarcastic.

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The housing market appears to have lost momentum earlier than usual as we approach the end of autumn. I tend to think that the threat of HTB2 caused a greater rush of buyers trying to pre-empt a price rise than HTB2 has delivered itself.

The indicies for October may well show further rises, but the activity level is nothing like September imo.

Edited by crashmonitor

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If I were a squid, being damp would be quite a desirable state of affairs, and being submerged more so.

Squid: betentacled sea-dwelling creature.

Squib: a kind of firework.

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Osborne is pushing on a string. People don't want to take on big debts when job security is low and wages are falling in value.

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If I were a squid, being damp would be quite a desirable state of affairs, and being submerged more so.

Squid: betentacled sea-dwelling creature.

Squib: a kind of firework.

I did think there was something odd about the title of the thread, but I couldn't quite plaice my finger on it.

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It's still a kick in the tentacles for the prudent.

A real sucker punch indeed.

It's not a surprise that people are confused given the two different systems used for each part of HTB, allied to some shonky marketing displaying new build prices net of the equity loan portion.

The chancellor seemed pretty unsure himself for a while after budget day, and the rush to bring it forward will only have compounded the problem.

Yup, George, maybe giving people the impression you are doing them a big favour with HTB is a mistake when they realise it's not quite the reality. Help to Sell, couldn't be better.

Edited by The B.L.T.

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Some don't seem to get Help to Buy. Spoke to a woman in her late 20s that discovered she could only borrow enough to buy a bottom of the barrel one-bed flat and couldn't have really afforded the mortgage and all bills as a single person. I get the impression she thought HTB would provide more than it actually does. In many areas it's only going to help the pretty affluent buy a home sooner.

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Reaction Osborne/Cameron - Conservatives looking for from hard-working young families re launch of HTB2 debt-help.

"It was the most memorable time of my life. It was a touching moment because I never thought this day would ever happen. I won't have to worry about putting gas in my car. I won't have to worry about paying my mortgage. You know, if I help him, he's gonna help me."

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I had/have a feeling that HTB 2 may not go so well, you know why? It's because everyone is so f*cking clever.

the market participants have too much information, thus are trying to be clever. It's like those holding out for the market to recover, it won't recover why they are holding out. The reason is because they are holding out. which is also why prices won't fall it's the number of HPC'ers holding out.

Stalemate.

Go and have a look at Money Saving Expert forums and come back in 5 minutes.

First time buyers, btl landlords etc. are/were all trying to front run help to buy by 'getting in' early before it's launch. It has been fear driving the market the last 6 months, feat that prices will rise further and there will be a bubble.

Help to buy 2

The fact is making more 95% mortgages available ain't gonna do squit in the grander scheme of things. The only place it will really help is in the London bubble. Elseware in the country most people just cant afford the payments of a 95% mortgage at the 5% interest rates.

The market is maxed out - as proved by static falling rents and low yields.

Real wages are falling, people cant afford the pub - they certainly don't want to take on more debt. How will they pay it back?

Help to buy 1

I have no problem with help to buy v1 on new builds, they can extend that to 50% or 100% equity loan at 0% for 100 years all they like. As long as more dwellings are built.

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Origin of the phrase "damp squib"

While most modern squibs used by professionals are insulated from moisture, older uninsulated squibs needed to be kept dry in order to ignite, thus a "damp squib" was literally one that failed to perform because it got wet. Often misheard as "damp squid",[8] the phrase "damp squib" has since come into general use to mean anything that fails to meet expectations.[9] The word "squib" has come to take on a similar meaning even when used alone, as a synonym for dud.[10]

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First surveys in...

Aspiring first-timers struggle to get to grips with Help to Buy

[tongueincheek]

The full report mentions that 97% of respondents were shocked to discover they had to pay the 20% back. "So it's not free money after all then," was one disgruntled comment...[/tongueincheek]

Looks like Dave and George will have to find something else to bring in the votes... :ph34r:

The thing is that your comment is not really that tongue in cheek at all if 66% of respondents were disappointed to see that HtB was 'just a glorified loan'. Errrmmm, isnt that what any mortgage is?

The fact is that HtB is too little too late to prop up the housing market, especially in London. It takes away the problem of not having a decent deposit, and replaces it with the problem of having to pay back a huge mortgage at the type of interest rate (5%) that would have been considered normal a decade ago but is now seen as very high.

It didn't even start to address the problem of how to get an 'average' couple earning £50k a year into an 'average' semi that costs at least 10 times that. In fact, it's whole aim was to make that gulf even worse.

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I was trying to include a subtle reference to Goldman Sachs..

Nice! Should have stopped there. Totally plausible.

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Anecdotal here, but it appears to have generated more FTB interest (here in Stockport). It's also brought a lot of additional supply to the market too. Prices appear to be up 5%ish, but until I see it in the sold data I'd question it.

The spectre of HTB appears to have generated some volume, almost dried up supply in one place I'm looking, but I'm still seeing a lot of 'sale agreed's fall through now too.

Delusion, the odd person overpaying, price drops, sensibly priced houses in nice areas sold within a week or two and lack of volume still seems to be norm though.

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I'll offer up a case study for discussion. I'm considering H2B2 despite the punitive rates when i have other (albeit limited) options.

There's a house i want to buy, it needs a bit of work to be what i want it to be. I've been waiting for a good time to buy for about 2 years now. Assume i'm going for a 2 year fix with the intention of remortgaging after that.

option 1) I can cover a 15% deposit if i really stretch, leaving a very small buffer once all the fees are paid leaving almost no room for doing any work in the next 12 months. This would give me the lowest interest rate and be the cheapest option in terms of interest paid.

option 2) I can use a 10% deposit and keep back a third to tart it up a bit, add some value and improve comfort/life in general. Higher rate, costing me an extra £1.8K over the 2 year fix.

option 3) I can use HTB2, retain 2/3 of my savings to do some major improvements, add value to the property, get it how i want it and be in a stronger position when it comes to re-mortgaging. The cost of this is £3k more than option 1 over the 2 year fix. The theory being that the deposit money is invested into the property giving a bigger uplift to the value of the property and our quality of life than the £3k in extra cost.

Option 2 & 3 are fairly heavily reliant on the market not collapsing by the end of the fix admittedly. Obviously there are other options such as continuing to rent but my family is growing up and we'll soon need to upsize, the rent then being not far off what a mortgage will cost me if we want to stay in this town.

This is my actual situation so would be interested in any insights.

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I'll offer up a case study for discussion. I'm considering H2B2 despite the punitive rates when i have other (albeit limited) options.

There's a house i want to buy, it needs a bit of work to be what i want it to be. I've been waiting for a good time to buy for about 2 years now. Assume i'm going for a 2 year fix with the intention of remortgaging after that.

option 1) I can cover a 15% deposit if i really stretch, leaving a very small buffer once all the fees are paid leaving almost no room for doing any work in the next 12 months. This would give me the lowest interest rate and be the cheapest option in terms of interest paid.

option 2) I can use a 10% deposit and keep back a third to tart it up a bit, add some value and improve comfort/life in general. Higher rate, costing me an extra £1.8K over the 2 year fix.

option 3) I can use HTB2, retain 2/3 of my savings to do some major improvements, add value to the property, get it how i want it and be in a stronger position when it comes to re-mortgaging. The cost of this is £3k more than option 1 over the 2 year fix. The theory being that the deposit money is invested into the property giving a bigger uplift to the value of the property and our quality of life than the £3k in extra cost.

Option 2 & 3 are fairly heavily reliant on the market not collapsing by the end of the fix admittedly. Obviously there are other options such as continuing to rent but my family is growing up and we'll soon need to upsize, the rent then being not far off what a mortgage will cost me if we want to stay in this town.

This is my actual situation so would be interested in any insights.

2 years is not a long time waiting

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I'll offer up a case study for discussion. I'm considering H2B2 despite the punitive rates when i have other (albeit limited) options.

There's a house i want to buy, it needs a bit of work to be what i want it to be. I've been waiting for a good time to buy for about 2 years now. Assume i'm going for a 2 year fix with the intention of remortgaging after that.

option 1) I can cover a 15% deposit if i really stretch, leaving a very small buffer once all the fees are paid leaving almost no room for doing any work in the next 12 months. This would give me the lowest interest rate and be the cheapest option in terms of interest paid.

Do option 1 to lock in the low interest rate over the bulk of your loan.

Once you've moved in take out a personal loan to do the renovations. You can borrow 10 grand at 5.1%.

This will be much cheaper than either of the other 2 options.

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