Help To Buy 2 - Actual Take Up

[TheCountOfNowhere]

From the from page of HPC:

"No one in the press seems to have realised that HTB2 is not being used by ANYBODY. HTB2 aimed to get the housing market moving again. It succeeded, but not because everyone flocked to take out government-subsidised 95% mortgages. It succeeded because everyone else mistakenly expected that to happen and tried to beat the rush, creating the bubble they were all expecting in the process. Less than 1700 people had used HTB2 within the first 6 months. That's less than 1% of the market. That's barely more than 1% of FTBs (25k/month according to the CML). I highly doubt removing HTB2 would make any difference anymore. The p"

"Less than 1700 people had used HTB2"

Is that true ?

Is this why I am seeing houses that have been sold for 6 months+ ?

Have all the 2nd steppers agreed to buy 3 rd steppers/down sizers homes without there being many people to actually support their steps up the pyramid ?

Are all these approval stats from deluded home owners who think at some point their chain will complete ?

Meanwhile back in the real work....the people who can actually buy are sat twiddling their thumbs thinking....**** that, the prices are insane.

Edited May 6, 2014 by TheCountOfNowhere

[wonderpup]

I highly doubt removing HTB2 would make any difference anymore.

I can't confirm the actual figures but most sources seem to suggest take up has been low. But just as HTB2 drove prices up in expectation of a rise, if /when it stops it will likely cause a dip in prices for the same reason- people will be anticipating a drop and so will set their offers accordingly.

In fact it may well be that the negative impact of taking it away will dwarf the positive impact it had in the first place.

[TheCountOfNowhere]

I can't confirm the actual figures but most sources seem to suggest take up has been low. But just as HTB2 drove prices up in expectation of a rise, if /when it stops it will likely cause a dip in prices for the same reason- people will be anticipating a drop and so will set their offers accordingly.

In fact it may well be that the negative impact of taking it away will dwarf the positive impact it had in the first place.

I think the psychological effect of buyers sitting in a chain got 6-12 months, the London bubble collapsing, followed by a hung parliament and the free rigged market tories getting the boot should shift sentiment down the toilet pan.

[John The Pessimist]

Well at least it means that we the taxpayers aren't on the hook, or at least not to the extent we thought!

Perhaps the boy chancellor engineered HPI without generating a massive liability? Unfortunately (for him) this level of take up won't generate another 12 months of positive sentiment. Is there another cunning scheme to be unleashed in the Autumn Statement?

[Venger]

Meanwhile back in the real work....the people who can actually buy are sat twiddling their thumbs thinking....**** that, the prices are insane.

Other buyers behaviour at the margin (and sellers raising asking prices to match), projecting effects of HTB1 and 2 for their own positions. Totally overlooked by many VI who say very few sales under HTB1 and 2, "so all is perfectly fine."

It could now be a similar impasse to what they're now calling it "Sticker Shock" in the US, for the remaining non-owners who haven't been lured in to buy, during the big big house price rises there of the last two years.

The hope there is is residential buyers will step in, at the much higher prices, as investors sliding away from market. It's a wait-and-see. As it might be here too.

Also this - you'd have to Google the title for the article - although it weakens towards the end, instead of getting hard crashy:

Impact of help to buy revealed

11/04/2014

[Graph/chart]

31,000 first-time buyers using help to buy

258,000 renters priced out of buying by the rise in house prices since the launch of help to buy in April 2013.

However, as Matthew Pointon, property economist at Capital Economics points out, the housing market works on confidence and on expectations that can become self-reinforcing.

[Other graph/chart]: ... it's very hard to ignore the link between the timing of announcements and trends in prices.

The graph shows how the annual rate of house price inflation as recorded by the Nationwide and the Halifax was around 1percent in March 2013 but began to rise after the help to buy Budget announcement, and then accelerated again when the launch of the second part was brought forward from October.

.. It’s a similar story on house prices. While help to buy sales so far cannot have had much impact on their own, it’s very hard to ignore the link between the timing of announcements and trends in prices.

[zugzwang]

Other buyers behaviour at the margin (and sellers raising asking prices to match), projecting effects of HTB1 and 2 for their own positions. Totally overlooked by many VI who say very few sales under HTB1 and 2, "so all is perfectly fine."

It could now be a similar impasse to what they're now calling it "Sticker Shock" in the US, for the remaining non-owners who haven't been lured in to buy, during the big big house price rises there of the last two years.

The hope there is is residential buyers will step in, at the much higher prices, as investors sliding away from market. It's a wait-and-see. As it might be here too.

Also this - you'd have to Google the title for the article - although it weakens towards the end, instead of getting hard crashy:

Not to mention the impact HtB has had in boosting confidence and activity in the construction industry generally, at least in the short-term.

[Ah-so]

There have also been hardly mortgages in London granted under either of the HTB schemes.

The liquidity effect of FLS along with the psychological effect of htb has really helped propel process ever higher.

[repetitive bleats]

There have also been hardly mortgages in London granted under either of the HTB schemes.

The liquidity effect of FLS along with the psychological effect of htb has really helped propel process ever higher.

Hardly any houses in London are cheap enough to qualify.

[billybong]

On the radio news this evening they announced that the government is considering stopping the Help to Buy scheme in a few months time.

Edited May 6, 2014 by billybong

[wonderpup]

On the radio news this evening they announced that the government is considering stopping the Help to Buy scheme in a few months time.

They must be really worried then- because this will hit sentiment hard I think. Give a man a crutch and he will walk a little easier- kick it away later and he will fall down ,having learned to depend on it's support.

Perhaps Osborne has at last seen the danger in creating a prop for market confidence and wants to pull it away before that dependency grows too great?

[Dweller]

On the radio news this evening they announced that the government is considering stopping the Help to Buy scheme in a few months time.

Probably in the hope of getting people sitting on the fence to LEAP IN and boost figures before house prices go up any more . Last Change to Buy, as someone posted yesterday. And/or, perhaps because the take up has been not what was expected, the government feel they can afford to say they are stopping it because they want to make sure property doesn't become unaffordable )

[Tonkers]

I just wonder about the sheer amount of funny money that's been rinsing through London, funny money that might mot give a shit if it loses 50% of its value? It's still a cheap launder. What sort of mugs would buy amongst that? Osbourne and Carney have little control of the London housing market unless they start to tax, and they won't do that. The latest fad in London is just shitloads of student housing, twin bed rooms with en suite sold to Asian investors, what ******ing use are these places? One near me was finished last year, and we have never seen anyone go in or out if the place. Some parts of London are becoming seriously depopulated.

[TheCountOfNowhere]

They must be really worried then- because this will hit sentiment hard I think. Give a man a crutch and he will walk a little easier- kick it away later and he will fall down ,having learned to depend on it's support.

I think it's more likely hardly anyone has used it and they've realised what a vote looser pushing up the cost of living is.

[Sancho Panza]

I think the psychological effect of buyers sitting in a chain got 6-12 months, the London bubble collapsing, followed by a hung parliament and the free rigged market tories getting the boot should shift sentiment down the toilet pan.

Made me smile.So true.

[Mr. Miyagi]

There are cheaper 95% mortgages out there, even before help to buy 2 mortgages came on the market http://www.monbs.com/mortgages/ Monmouthshire building society are/were offering a 95% 3 year variable at 3.95%. Natwest as an example are offering a 2 year fixed HTB2 at 5.39%.

Monmouthshire building society have had the 95% mortgage offer for quite some time. Depending of whether you think rates will rise in the next two years the HTB2 products looks poor value in comparison.

NB. The only applies to South Wales

Edited May 7, 2014 by Mr. Miyagi

[Bloo Loo]

There are cheaper 95% mortgages out there, even before help to buy 2 mortgages came on the market http://www.monbs.com/mortgages/ Monmouthshire building society are/were offering a 95% 3 year variable at 3.95%. Natwest as an example are offering a 2 year fixed HTB2 at 5.39%.

Monmouthshire building society have had the 95% mortgage offer for quite some time. Depending of whether you think rates will rise in the next two years the HTB2 products looks poor value in comparison.

NB. The only applies to South Wales

HTB 2 was NOT about reducing mortgage costs...It was about getting borrowers who would fail the usual criteria back on the list...although this is strenuously denied, one has to then ask what the frack WAS it about, as the act of guarantee AUTOMATICALLY raised the cost.

There is no logic to HTB2 other than to relax bankers criteria.

[TheCountOfNowhere]

HTB 2 was NOT about reducing mortgage costs...It was about getting borrowers who would fail the usual criteria back on the list...although this is strenuously denied, one has to then ask what the frack WAS it about, as the act of guarantee AUTOMATICALLY raised the cost.

There is no logic to HTB2 other than to relax bankers criteria.

And there was me thinking it was a hand out for the banks. I wish my business got government backed tax payer handouts with a basic win-win scenario.

HTB/FLS/HTBS/BLT are all a bunch of policies aimed at profiting the bankers, generating tax and squeezing money out of people.

The only HELP these schemes are a "HELP THEMSELVES TO PEOPLE CASH."

[Mr. Miyagi]

HTB 2 was NOT about reducing mortgage costs...It was about getting borrowers who would fail the usual criteria back on the list...although this is strenuously denied, one has to then ask what the frack WAS it about, as the act of guarantee AUTOMATICALLY raised the cost.

There is no logic to HTB2 other than to relax bankers criteria.

Whether it's that or something different it's certainly not about reducing the cost for consumers.