long time lurking Posted March 19, 2015 Share Posted March 19, 2015 Not multiples, leverage. The effect of changes to earnings multiples are at best matched and at worst dwarfed by the effect of deposit leverage while interest rates are where they are. The multiplier on higher earnings multiples might be say 5x, but on any extra £ deposit prop 10x or 20x depending on the LTV. That's why prices are so high and why it's now all about deposits (or lowering SDLT to leave more for deposit) while pretending to be bothered about lending multiples while earnings are hardly rising. e.g. Someone with 6k deposit topped up 25% by £1.5k. For a 95% LTV FTB mortgage that extra £1.5k translates into £30k more potential debt. Without touching the overall lending multiple and assuming affordable repayments. I don't know if/when effect will hit, but yes it's ridiculous and pure ponzi. Ahh see where you are coming from now Quote Link to comment Share on other sites More sharing options...
bankstersparadise Posted March 19, 2015 Share Posted March 19, 2015 Subsidised savings for FTB's (partly to counter the effects of artificially low rates). Subsidised savings for pensioners (partly to counter the effects of artificially low rates). Subsidised mortgages for homeowners (via artificially low rates). Subsidised asset prices (also via artificially low rates). Subsidised rents and pay via housing benefit and tax credits for, well, an awful lot of people esp. in London (because property too expensive due to artificially low rates). The Client State. Building since 1981. Welcome to communism.....just remember it is the free market that is evil, the institute of public opinion and propaganda (BBC) told me so. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted March 19, 2015 Share Posted March 19, 2015 Welcome to communism.....just remember it is the free market that is evil, the institute of public opinion and propaganda (BBC) told me so. All of which just happen to help an elite few and the people making the policies. Therein lies the problem. Quote Link to comment Share on other sites More sharing options...
winkie Posted March 19, 2015 Share Posted March 19, 2015 Welcome to communism.....just remember it is the free market that is evil, the institute of public opinion and propaganda (BBC) told me so. Quote Link to comment Share on other sites More sharing options...
bankstersparadise Posted March 19, 2015 Share Posted March 19, 2015 All of which just happen to help an elite few and the people making the policies. Therein lies the problem. Everyone in a communist society is equal, apart from those at the top that control it. http://www.forbes.com/2011/09/14/china-rich-lists-opinions-contributors-john-lee.html At least those guys over there call a spade a spade. Quote Link to comment Share on other sites More sharing options...
ccc Posted March 19, 2015 Share Posted March 19, 2015 Everyone in a communist society is equal, apart from those at the top that control it. http://www.forbes.com/2011/09/14/china-rich-lists-opinions-contributors-john-lee.html At least those guys over there call a spade a spade. Agreed. I have said it before - I have more respect for the likes of 'tinpot' African dictatorships. They know they are corrupt - they don't hide it - and its up to the population to stand up to them and stick their head on a stake. Far fairer IMO than what we have in the UK. Its 'honest' corruption. Quote Link to comment Share on other sites More sharing options...
renting til I die Posted March 19, 2015 Share Posted March 19, 2015 (edited) Used to be in Aus - not any more. Just to be clear - I am not talking about using your pension pot when you retire. The latest suggestion from Joe Hockey is that people should be able to use their pension pots to buy property at any time. They are actually suggesting that pre-retirement age people p!ss away their pensions to feed the bottom of the Ponzi, and some people seem to think this is a good idea.. It's already the case in Aus that it is far more common now for young people to buy an "investment property" (BTL) and rent it out, rather than buy themselves a home to live in. So everyone's buying BTL's and letting to each other, to take advantage of -ve gearing after a quick 6 months in the property to cash in on the first home buyers grant, of course. Aus property - and the attitude towards it - actually puts us in the shade, which takes some doing. I have no doubt Osborne is looking down under for inspiration.. Funnily enough, I had a discussion with a friend of mine few years back about doing this in UK (mostly his idea). Buying a BTL up north and using the rent to supplement my income living in the SE. It didn't sit right with me, partly for the moral implications but mainly due to my belief that interest rates are artificially low and anything that I purchase would be a poor investment once rates started to go up! I've read a little on some of the schemes Australian government has implemented and I think the UK can go a lot further! In fact it's quite scary! I have been convinced of this for a good few years now and it`s the reason i believe we will see negative gearing if the conservatives win in May ,it would not suprise me if Labour go down the same road if they win It`s sounds like Aus could suffer the same fate a Ireland as that just sounds like madness What is happening in Ireland now? What's the Irish peoples attitude towards property now? The thing is that they did have significant HPC, something like 50% but I heard that a lot of banks couldn't/didn't/wouldn't repossess. Are prices now recovering? Did anyone in negative equity really lose out, if the government propped up the market to let them keep their house? How will any of this really change peoples attitude towards property in the long term, changing it from an investment to a utility? Which is what I really dream for! Edited March 19, 2015 by renting til I die Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted March 19, 2015 Share Posted March 19, 2015 The Treasury document is littered with CML (Council for Mortgage Lender) references based on first time buyer data. However, the ISA document seems to suggest a first time buyer definition is someone who has never owned but I don't think this is aligned with the CML or industry definitions. Possibly even open to interpretation but I guess that will be handled by the scheme administrator? Quote Link to comment Share on other sites More sharing options...
long time lurking Posted March 19, 2015 Share Posted March 19, 2015 What is happening in Ireland now? What's the Irish peoples attitude towards property now? The thing is that they did have significant HPC, something like 50% but I heard that a lot of banks couldn't/didn't/wouldn't repossess. Are prices now recovering? Did anyone in negative equity really lose out, if the government propped up the market to let them keep their house? How will any of this really change peoples attitude towards property in the long term, changing it from an investment to a utility? Which is what I really dream for! Ireland is/was a basket case Dublin has seen a rise just like London but much smaller, the rest is the same as the UK other than London/SE flat stagnating IMO Dublin is skewing the numbers for Ireland just like London/SE is doing for the UK as for repossessions i think it was a case of having to extend and pretend Was in the ROI Autumn before last there was no talk of get rich quick from flipping/BTL most were just happy to have a roof over their heads and on an anecdotal note i think jingle mail is still a common practice when it comes to the youngsters that can forge a life/career in another part of the world Quote Link to comment Share on other sites More sharing options...
Si1 Posted March 20, 2015 Share Posted March 20, 2015 Jingle mail is no longer an option in the uk, the debtor still owes any shortfall Quote Link to comment Share on other sites More sharing options...
renting til I die Posted March 20, 2015 Share Posted March 20, 2015 Jingle mail is no longer an option in the uk, the debtor still owes any shortfall I don't think it was ever an option in the UK, was it? I remember reading somewhere that Jingle mail isn't no longer an option in the US either. Quote Link to comment Share on other sites More sharing options...
long time lurking Posted March 20, 2015 Share Posted March 20, 2015 (edited) I don't think it was ever an option in the UK, was it? I remember reading somewhere that Jingle mail isn't no longer an option in the US either. It`s always an option ,if you have no socks you can't pull them up ,why do you think there`s such a reluctance to repossess ? Somthing is better than nothing Edited March 20, 2015 by long time lurking Quote Link to comment Share on other sites More sharing options...
long time lurking Posted March 20, 2015 Share Posted March 20, 2015 Jingle mail is no longer an option in the uk, the debtor still owes any shortfall I did not get the impression they were worried about that most were heading for NZ/AUS/CAN with long term views I know plenty that done it in the 90s they were chased but they never paid Quote Link to comment Share on other sites More sharing options...
Snugglybear Posted March 20, 2015 Share Posted March 20, 2015 It`s always an option ,if you have no socks you can't pull them up It's only ever been an option through bankruptcy. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted March 20, 2015 Share Posted March 20, 2015 http://money.aol.co.uk/2015/03/20/dubious-help-to-buy-isas-will-drive-up-house-prices/ Quote Link to comment Share on other sites More sharing options...
long time lurking Posted March 20, 2015 Share Posted March 20, 2015 It's only ever been an option through bankruptcy. You can post the keys back at anytime you like you don't need to be bankrupt ,but they will chase you for up to 12 years,just like they will chase you for 12 years for the shortfall if they repossess the only difference is one can choose the date of leaving Quote Link to comment Share on other sites More sharing options...
Digsby Posted March 20, 2015 Share Posted March 20, 2015 http://money.aol.co.uk/2015/03/20/dubious-help-to-buy-isas-will-drive-up-house-prices/ Personally, if I do buy, and the scheme is in place, and I qualify, I'll open a couple of accounts in me and the wifes name with £1k opening balance, just before, and collect my free £500 It'll make sod all difference to affordability, but will cover some of the stamp duty. Quote Link to comment Share on other sites More sharing options...
MrXxx Posted March 21, 2015 Share Posted March 21, 2015 Anybody know what qualifies as a 'first time buyer' within this scheme?...i.e. is it actually somebody who has never (ever) bought a property, somebody who has not had a property for x number of years or somebody who currently doesn't have a property? Quote Link to comment Share on other sites More sharing options...
Guest Posted March 21, 2015 Share Posted March 21, 2015 You have to have saved £1600 before you qualify for a bonus, so you have to open the account at least 6 months before buying. Quote Link to comment Share on other sites More sharing options...
Digsby Posted March 21, 2015 Share Posted March 21, 2015 You have to have saved £1600 before you qualify for a bonus, so you have to open the account at least 6 months before buying. Cheers for that. Ok £800 free then! Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted March 21, 2015 Share Posted March 21, 2015 if i drop 1k on opening and £200 a month it will take 55 months, 4 and 1/2 years to get the maximum £3000 benefit from that policy and their is no quicker way to get it and its only like 1.4% discount on an averaged priced house, over 4 1/2 years for an average discount of 1.4%, ouch One minor clarification on this. The scheme outline says: "the bonus will apply to both the amount a person saves into their Help to Buy: ISA and the interest that is built up during the period the account is open" Therefore it will actually take slightly less than the oft-quoted 55-month period to accrue the maximum £12,000 eligible for bonus (assuming a positive interest rate on the ISA). With an initial £1,000 deposit and the max £200 p/m contributions thereafter, at a 2% p.a. interest rate (for example), £11,940 will have accrued after 52 months, resulting in a total deposit (after government bonus) of £14,925 from savings contributions totalling £11,400. This is equivalent to a tax free interest rate of 11.8% p.a. [To be clear, I'm making a technical point and not passing any comment on the wisdom of taking out a HTB ISA.] Quote Link to comment Share on other sites More sharing options...
Trampa501 Posted March 21, 2015 Share Posted March 21, 2015 Is it time to admit that Hamish and Sibley were right? Quote Link to comment Share on other sites More sharing options...
renting til I die Posted March 21, 2015 Share Posted March 21, 2015 Anybody know what qualifies as a 'first time buyer' within this scheme?...i.e. is it actually somebody who has never (ever) bought a property, somebody who has not had a property for x number of years or somebody who currently doesn't have a property? I wouldn't worry too much about the current rules. By the end of the scheme I'm sure it will be open to everyone. Young, old, unborn children, etc! Plus the introduction of the help to buy a TV ISA, the help to go on holiday ISA and my currently favourite the help to pay my gas bill ISA! Quote Link to comment Share on other sites More sharing options...
durhamborn Posted March 21, 2015 Share Posted March 21, 2015 Is it time to admit that Hamish and Sibley were right? Sibley now considered a Guru?.Last i heard he was painting aeroplanes somewhere. Quote Link to comment Share on other sites More sharing options...
RandomFactor Posted March 21, 2015 Share Posted March 21, 2015 Does anyone know if this is only available for new builds, and whether it's also available for someone wanting to buy outright rather than use it as a deposit with a mortgage? I had a quick skim over the pdf but I didn't spot any mention of this (might have missed it). Quote Link to comment Share on other sites More sharing options...
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