Help To Buy Phase 3 - 100,000 First-Time Buyers To Get 20% Discount - Merged Topics

[ingermany]

To be announced by Cameron today. Homes at 20% below market value, built on Brownfield sites with government subsidies. Only for under 40s FTBs.

Quote from Eric Pickles: " the 2008 housing crash blocked millions of hard working creditworthy people from becoming home owners",

confirms that in government's mind falling prices make it more difficult to buy a house and therefore the more prices rise, the easier it is for people to buy a home. They don't apply the same logic to fuel prices of course. The statement does make sense of the government's deliberate strategy to pump up house prices. Link on Sky News.

[Bruce Banner]

Direct government subsidy to builders?

[Dorkins]

So Cameron is going to build ghettoes for my generation on toxic waste dumps?

[Venger]

http://news.sky.com/story/1391931/david-cameron-to-launch-home-discount-scheme

Please sign up and buy. I liked HTB1 newbuild for it means this fewer buyers competing against us for secondary housing stock, in a hpc ahead. This looks similar. People buying such houses are not really going to pump up house prices, but at some point, make the wider market even weaker. Developers get to skip certain tariffs on these brownfield sites, but so what... that's what they're really heralding as a saving lol.

Eric Pickles is a right pusher for these schemes. Credit worth hard working people, not able to afford locked-in protected HPI house prices, then reflated with QE/HTB sentiment.

http://www.bedfordshire-news.co.uk/Communities-Secretary-Eric-Pickles-visits-Silsoe/story-24842319-detail/story.html

[Oliver Sutton]

If these houses were built in addition to any other ones then this would reduce demand and prices in the normal market.

But we all know they won't. Just used to simply off-load otherwise unsellable properties at inflated prices.

[Dorkins]

So now we get a new class of housing, Starter Homes.

[Bruce Banner]

I wondered why certain forum posters were attacking me last night for having the temerity to suggest that the problem is one of loose credit rather than lack of supply, now I know.

[moedo12]

Would be better if the government paid for the houses to be built and then rented the majority of them out as social housing. Would reduce the housing benefit bill and also provide a steady income from the investment. It wouldn't matter if the government borrowed billions to build the houses too and they would borrow at very low interest rates.

[goldbug9999]

I wondered why certain forum posters were attacking me last night for having the temerity to suggest that the problem is one of loose credit rather than lack of supply, now I know.

The problem is the combination of the two - loose credit can only bid up prices if supply is constrained. If it were not the case then loose credit would be also be bidding up the prices of phones TVs and cars. Ireland is a good example of how no amount of credit can keep prices up if supply catches up with demand.

Edited December 15, 2014 by goldbug9999

[Bloo Loo]

Its a bit late for HTB3 isnt it?

[interestrateripoff]

Perhaps soon the govt will have to buy houses for people to live in and then charge them rent because they can't afford to buy....

[rantnrave]

I wonder if these will be available to under 40s cash buyers?

[dkujsbap]

The worst thing is, none of Milliband, Clegg, Farage or even Lucas will come out and condemn it.

Which means that it'll never be unwound, even once Cameron goes.

[Blod]

So these waste land sited new builds will be 20% discounted.

You can better that they'll still be over priced as they are new builds.

Pure political desperation.

[nnails]

help not to vote tory 3

[Bloo Loo]

The problem is the combination of the two - loose credit can only bid up prices if supply is constrained. If it were not the case then loose credit would be also be bidding up the prices of phones TVs and cars. Ireland is a good example of how no amount of credit can keep prices up if supply catches up with demand.

Loose credit IS boosting the prices of phones and cars.

It disguises the actual price for the end users...it enables sellers to sell to people who couldnt pay the asking prices for the goods, it therefore allows the market to determine the price as per the monthly contract.

[Squeeky]

I wonder what help to buy 4 will be ? 25 year 0% loan ?

I'd happily take up that scheme.

[Bruce Banner]

I'd happily take up that scheme.

Ever if, with hindsight, the house is worth a fraction of what you paid for it?

[zugzwang]

Ever if, with hindsight, the house is worth a fraction of what you paid for it?

+1

Everything denominated in sterling is going to zero.

[StainlessSteelCat]

If this is HTB 3 , I hate to think what Phase IV looks like:

BTL takes over the earth?

[Exiled Canadian]

Won't this take further first time buyers out of the "general pool" and also put downward pressure on rents if it is successful?

It is effectively creating an injection of new supply at 20% off market value in the FTB market.

Maybe I'm not thinking straight, but doesn't this hurt the 2nd hand home market?

[LiveinHope]

Won't this take further first time buyers out of the "general pool" and also put downward pressure on rents if it is successful?

It is effectively creating an injection of new supply at 20% off market value in the FTB market.

Maybe I'm not thinking straight, but doesn't this hurt the 2nd hand home market?

Those are my thoughts

And of course, every new home becomes a secondhand home

I wouldn't enter the housing market right now

[jammin35]

I think Exiled Canadian might well be right.

I suppose it all depends on how many actually get built, but i see this as deflationary.
Let's say you are a first time buyer. The government is going to build 100 homes in your town.

Do you:

a) Buy one of these homes for £180k, at a 20% "discount"

Buy an older home, for £240k, which is actually 25% more

If (a), then other sellers will need to reduce their prices to compete with that strategy.

The only fly in the ointment in this thinking, though, is that house prices are not fixed, so a builder could whack a price on the market at a 25% premium, discount it by 20%, and nobody would be any the wiser, since new build always seems to cost stupid amounts more than older stock, despite generally needing more fixing!

[jammin35]

I think Exiled Canadian might well be right.

I suppose it all depends on how many actually get built, but i see this as deflationary.

Let's say you are a first time buyer. The government is going to build 100 homes in your town.

Do you:

a) Buy one of these homes for £180k, at a 20% "discount"

Buy an older home, for £240k, which is actually 25% more

If (a), then other sellers will need to reduce their prices to compete with that strategy.

The only fly in the ointment in this thinking, though, is that house prices are not fixed, so a builder could whack a price on the market at a 25% premium, discount it by 20%, and nobody would be any the wiser, since new build always seems to cost stupid amounts more than older stock, despite generally needing more fixing!

I got my numbers slightly wrong there, but you get my drift. Top figure should have read £192k.

[19 year mortgage 8itch]

Won't this take further first time buyers out of the "general pool" and also put downward pressure on rents if it is successful?

It is effectively creating an injection of new supply at 20% off market value in the FTB market.

Maybe I'm not thinking straight, but doesn't this hurt the 2nd hand home market?

No offense to specific tenants like myself but what you suggest will also distill rental tenants down to the dregs, leading to even more hmo daddy type operators in an accommodation race to the bottom.