boo Posted February 4, 2015 Share Posted February 4, 2015 I actually think in some cases the help to buy is good, if someone is on a low income. However today at work I was amazed to hear a colleague is using this scheme. The bank has said they can borrow £450k but as they only have £30k deposit and and the house they want to buy is £600k, they need help to buy as the bank will not lend them £570000 Surely if you have 30k and can borrow up to £450k already then if they save another £15k they could get a house for nearly £500 without govt intervention. I cannot believe yhr scheme is allowing this as they don't really need help!! Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted February 4, 2015 Share Posted February 4, 2015 (edited) I actually think in some cases the help to buy is good, if someone is on a low income. However today at work I was amazed to hear a colleague is using this scheme. The bank has said they can borrow £450k but as they only have £30k deposit and and the house they want to buy is £600k, they need help to buy as the bank will not lend them £570000 Surely if you have 30k and can borrow up to £450k already then if they save another £15k they could get a house for nearly £500 without govt intervention. I cannot believe yhr scheme is allowing this as they don't really need help!! Lower house prices would help a low income buyer, lower supermarket/fuel prices and lower rents would help them save for a deposit HTB keeps up the pretence that house prices are worth more than they really are. This rewards them at the top of the pyramid ( the rich and the old ). HTB is being paid for by tax payers, some of whom will be using food banks and can scarcely afford to live themselves. Why the **** should they be forced to support someone who wishes to become a bankers biatch and pay tax to the government just to put a shelter over their head ? I wouldn't borrow a tenner off a bank never mind £450,000, more than most people can save in a lifetime or working. HTB is a divisive tool used by the government to support the bankers and the rich. HTB is evil You should maybe think about what you say before you say it. Edited February 4, 2015 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
boo Posted February 4, 2015 Author Share Posted February 4, 2015 I wasn't endorsing help to buy in any way. My point is that its not helping the people who it claims to be. Quote Link to comment Share on other sites More sharing options...
Fully Detached Posted February 4, 2015 Share Posted February 4, 2015 What it claims to be and what it is are two totally different things. It was never about helping anyone on low income, it was about keeping house prices high. The govt don't give a toss who uses it, as long as the end result is the same. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted February 4, 2015 Share Posted February 4, 2015 I wasn't endorsing help to buy in any way. My point is that its not helping the people who it claims to be. I know, sorry, too much coffee today I do feel quite strongly about this though. It's helping the people that it was introduced to help...the bankers and the rich. As I said, it's evil. Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted February 4, 2015 Share Posted February 4, 2015 Is there not now a minimum income required for HTB over 500k. 4 times income. So they'd need to be on 143k for a 570k purchase? Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted February 4, 2015 Share Posted February 4, 2015 (edited) Actually it's capped at 4.5 times income. So for a 600k house they need to be on 133k. 6700 a month take home roughly. Mortgage payments around 3700. I wouldn't touch it with yours. Edited February 4, 2015 by 2buyornot2buy Quote Link to comment Share on other sites More sharing options...
boo Posted February 4, 2015 Author Share Posted February 4, 2015 Is there not now a minimum income required for HTB over 500k. 4 times income. So they'd need to be on 143k for a 570k purchase? They are both high earners in good jobs so joint income of 143k would be correct! The guy said the mortgage is less than he is paying on their rental in the docklands. As they are only borrowing 75% ltv the rate will be low so £456k over 25 years at say 3% is around £2200 a month! Mind U they will only own 80% of the house! Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted February 4, 2015 Share Posted February 4, 2015 They are both high earners in good jobs so joint income of 143k would be correct! The guy said the mortgage is less than he is paying on their rental in the docklands. As they are only borrowing 75% ltv the rate will be low so £456k over 25 years at say 3% is around £2200 a month! Mind U they will only own 80% of the house! Do they know they have to save 1900 a month for 5 years to payback the equity loan or start paying 1.75% increasing by rpi. Think its crazy really. We make a similar amount but in Belfast, a 300k mortgage would scare me let alone a 600k one. Still it helps that you'd be lucky to get 1500 a month rent on a 600k house here. Quote Link to comment Share on other sites More sharing options...
LL75 Posted February 4, 2015 Share Posted February 4, 2015 Sounds like a couple wanting to live the high life and will borrow regardless of the cost or scheme. If you have to rely on the Government on £143k p/a than you are living beyond your means or have expectations that are too high. Surely being sensible, you could save for a few months and make up the difference. HTB has screwed over people like me, average salary + £70k deposit. Two years ago properties were £185k, now they are £225k and shoot out the EA's doors as soon as they come in. I can't borrow any higher multiples of income, I can only keep saving more of a deposit, which is barely keeping up with the price increases. I am now around £25k short of what I need. So if you are a joint or above average earner, the Government will bail you out with HTB, if you have the deposit, but are a single average wage earner you are stuffed. It is infuriating as if you do the right thing and save you are screwed, if you only save the bare minimum the government will reward you and give you free money (for a few years). Quote Link to comment Share on other sites More sharing options...
boo Posted February 4, 2015 Author Share Posted February 4, 2015 The numbers do not add up. Income £143,000 per year and they only have a deposit of £30,000 and as the top 1%?? of earners they will go for a shared ownership of just 80%.In the real world where property prices were part of a free market economy a joint salary of 143k would buy a very nice property in a good area. NB property prices went up by 300% under labour when wages went up by just 30%.[/quot The numbers do add up they are earning good money now but they both only started earning this amount a couple of years ago. His wife has just been given a big promotion in the last year based on some studies she was doing. I think livng in London on that money, only having 30k deposit is entirely feasible Quote Link to comment Share on other sites More sharing options...
boo Posted February 4, 2015 Author Share Posted February 4, 2015 I forgot to mention his wife is a bit high maintenance and wanted a new place they could just move into. There is also another interesting twist as she is pregnant!!! Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted February 4, 2015 Share Posted February 4, 2015 The numbers do not add up. Income £143,000 per year and they only have a deposit of £30,000 and as the top 1%?? of earners they will go for a shared ownership of just 80%.In the real world where property prices were part of a free market economy a joint salary of 143k would buy a very nice property in a good area. NB property prices went up by 300% under labour when wages went up by just 30%.[/quot The numbers do add up they are earning good money now but they both only started earning this amount a couple of years ago. His wife has just been given a big promotion in the last year based on some studies she was doing. I think livng in London on that money, only having 30k deposit is entirely feasible Even in London surely they should have been able to save more than 30k in 2 years. What sort of rent are they paying? Quote Link to comment Share on other sites More sharing options...
boo Posted February 4, 2015 Author Share Posted February 4, 2015 (edited) Must be over £2000 a month it's in the docklands and he said his mortgage would be less than their rent Edited February 4, 2015 by boo Quote Link to comment Share on other sites More sharing options...
boo Posted February 4, 2015 Author Share Posted February 4, 2015 Actually just looked on zoopla for 2 bed Canary wharf for rent...unbelievable!!! Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted February 4, 2015 Share Posted February 4, 2015 He's clearly ignoring the equity loan. And probably the massive service charge. Quote Link to comment Share on other sites More sharing options...
renting til I die Posted February 4, 2015 Share Posted February 4, 2015 Sounds like a couple wanting to live the high life and will borrow regardless of the cost or scheme. If you have to rely on the Government on £143k p/a than you are living beyond your means or have expectations that are too high. Surely being sensible, you could save for a few months and make up the difference. HTB has screwed over people like me, average salary + £70k deposit. Two years ago properties were £185k, now they are £225k and shoot out the EA's doors as soon as they come in. I can't borrow any higher multiples of income, I can only keep saving more of a deposit, which is barely keeping up with the price increases. I am now around £25k short of what I need. So if you are a joint or above average earner, the Government will bail you out with HTB, if you have the deposit, but are a single average wage earner you are stuffed. It is infuriating as if you do the right thing and save you are screwed, if you only save the bare minimum the government will reward you and give you free money (for a few years). I'm in a similar position to yourself. Hang on in there! Let the reckless have their debt binge, the more reckless they are and the hard they push prices up the worst the fall out from this mess will be! Quote Link to comment Share on other sites More sharing options...
mmt Posted February 4, 2015 Share Posted February 4, 2015 I haven't really looked at the detail of HTB but when they sell they have to pay back 20% of whatever they sell for- correct? If they are already at the HTB upper limit how can they possibly upsize after the government takes a slice - they won't get HTB on a more expensive property, no? Quote Link to comment Share on other sites More sharing options...
boo Posted February 4, 2015 Author Share Posted February 4, 2015 The won't need to up sell as its a 3 bed house so I expect they plan to stay in it for a while Quote Link to comment Share on other sites More sharing options...
boo Posted February 4, 2015 Author Share Posted February 4, 2015 But yes they have to pay back 20% of the sale price so the govt makes a profit if prices go up. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 4, 2015 Share Posted February 4, 2015 yes, that gifted deposit is only free for the first five years...she will be on her second sprog by then...there will be times when they will be on close to 9 times his income for their mortgage debt. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted February 4, 2015 Share Posted February 4, 2015 yes, that gifted deposit is only free for the first five years...she will be on her second sprog by then...there will be times when they will be on close to 9 times his income for their mortgage debt. Maybe interest rates will fall, that'll help them. Quote Link to comment Share on other sites More sharing options...
spyguy Posted February 5, 2015 Share Posted February 5, 2015 yes, that gifted deposit is only free for the first five years...she will be on her second sprog by then...there will be times when they will be on close to 9 times his income for their mortgage debt. There's a young couple in my home village (27/29) who I suspect have a HTB mortgage. The bought the house pre-MMR - Jan 2014ish. She works 16h as a hairdresser, partime summer job as a waitress. Originally I thought he had a short-term FT contract in 'social enterprise'. Turns out he works behind a bar for 30h/week. Mortgage is for ~190k. Come tax credit changes, 2nd kid, end of 5 years, they are fcked. Its cruel really. I wish MMR had come in a lot sooner to save them. They'd have been a lot happier and more secure in social housing - there is some in the village and its pretty nice. HTB has that ahole Shapps fingers all over it. Quote Link to comment Share on other sites More sharing options...
SarahBell Posted February 5, 2015 Share Posted February 5, 2015 The numbers do not add up. Income £143,000 per year and they only have a deposit of £30,000 and as the top 1%?? of earners they will go for a shared ownership of just 80%. +1 If they have only saved £30k then they need to try harder. And this is what banks shuold be saying to people. It is really hard to save money if you're on minimum wage but when you're raking it in you need to seriously reassess your life if you can not save £mega. Quote Link to comment Share on other sites More sharing options...
janch Posted February 5, 2015 Share Posted February 5, 2015 I wouldn't like to be in their position if/when prices plummet. They will be stuck in a flat in negative equity with a massive mortgage and a young child with no prospect of getting out intact. If/when they sell they will not be able to afford anything in inner London after paying back the govt 20% and will still have mortgage debt even without the property. This is what will happen if/when prices go down which is more than likely sooner or later as London is in a massive bubble. Quote Link to comment Share on other sites More sharing options...
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