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juvenal

Help To Buy Is Helping Rich

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Government intervention in housing market has unintended consequences (again) shock.....there's a lesson in there somewhere.

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Here comes the attacks on HTB.

Expect it to be withdrawn at some point.

No HTB, No BTL = No sup[port for the bottom of the pyramid.

About time that Big Brother stopped supporting the Outer Party and threw us Proles a bone.

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'In a panic about the government's failure on home-ownership, George Osborne is throwing money at those who can already afford to buy, at the expense of those who genuinely need a hand up.'

There was no panic - it was all done in a very planned, precise and calculated way.

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I think this is rather disingenuous. Was HTB aimed at helping those on low incomes or those who could not afford to save up a deposit fast enough to keep pace with HPI (We all know it was none of these really). However I do not see why a family on over 100k should not qualify.

Believe me you can be a family on over 100k a year and still not be able to afford to save a deposit. I am a pretty frugal yorkshireman. I am always going on at my wife for buying occasional starbucks coffees as a waste of money. I am not extremely frugal but I am certainly not extravagant.

While my wife was at Uni and I was earning just over 80k, we would fall back several hundred pounds a month just trying to make ends meet. Rent was £1850 a month for not a flash house, pretty small and shabby in Wimbledon. Council Tax £175 etc. By the time you have paid your bills, provided a modest reliable car, paid childcare costs and bought groceries there is nothing left. When unexpected cost come along or you finally cave in and decide to have a family holiday because you need it as a family you can easily be going into the red.

Now the wife is working we are trying to dig ourselves out of that debt hole before we can even start to think about a deposit on a house. Maybe living in Castleford 100k a year would be a good whack for a Family but believe me down here it certainly does not qualify as rich.

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I think this is rather disingenuous. Was HTB aimed at helping those on low incomes or those who could not afford to save up a deposit fast enough to keep pace with HPI (We all know it was none of these really). However I do not see why a family on over 100k should not qualify.

Believe me you can be a family on over 100k a year and still not be able to afford to save a deposit. I am a pretty frugal yorkshireman. I am always going on at my wife for buying occasional starbucks coffees as a waste of money. I am not extremely frugal but I am certainly not extravagant.

While my wife was at Uni and I was earning just over 80k, we would fall back several hundred pounds a month just trying to make ends meet. Rent was £1850 a month for not a flash house, pretty small and shabby in Wimbledon. Council Tax £175 etc. By the time you have paid your bills, provided a modest reliable car, paid childcare costs and bought groceries there is nothing left. When unexpected cost come along or you finally cave in and decide to have a family holiday because you need it as a family you can easily be going into the red.

Now the wife is working we are trying to dig ourselves out of that debt hole before we can even start to think about a deposit on a house. Maybe living in Castleford 100k a year would be a good whack for a Family but believe me down here it certainly does not qualify as rich.

Sorry a feeling sorry for myself moment. Makes me f*****g furious when I see blx like this cos believe me I am not feeling anything like rich right now!!

On the upside it is negative press against HTB.

There was no panic - it was all done in a very planned, precise and calculated way.

Lets hope that this is along the lines of getting the liabilities onto the balance sheets of the greedy.

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I think this is rather disingenuous. Was HTB aimed at helping those on low incomes or those who could not afford to save up a deposit fast enough to keep pace with HPI (We all know it was none of these really). However I do not see why a family on over 100k should not qualify.

Believe me you can be a family on over 100k a year and still not be able to afford to save a deposit. I am a pretty frugal yorkshireman. I am always going on at my wife for buying occasional starbucks coffees as a waste of money. I am not extremely frugal but I am certainly not extravagant.

While my wife was at Uni and I was earning just over 80k, we would fall back several hundred pounds a month just trying to make ends meet. Rent was £1850 a month for not a flash house, pretty small and shabby in Wimbledon. Council Tax £175 etc. By the time you have paid your bills, provided a modest reliable car, paid childcare costs and bought groceries there is nothing left. When unexpected cost come along or you finally cave in and decide to have a family holiday because you need it as a family you can easily be going into the red.

Now the wife is working we are trying to dig ourselves out of that debt hole before we can even start to think about a deposit on a house. Maybe living in Castleford 100k a year would be a good whack for a Family but believe me down here it certainly does not qualify as rich.

Why do you need to rent a house - are flats not good enough? Why do you need to live in an expensive neighbourhood like Wimbledon? Why do you need to live somewhere with Council Tax of £175? Why do you need a car if you live and work in London?

Not having a dig but the level of spend on these things is a personal choice.

I'm also in London. My contribution is I cover all 'family costs' (so food, rent, Council Tax, leccy etc) + my discretionary spend. My better half covers their discretionary spend. In 2015 my total spend will be £24k. That would leave you with a lot of savings from that £80k of yours.

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Why do you need to rent a house - are flats not good enough? Why do you need to live in an expensive neighbourhood like Wimbledon? Why do you need to live somewhere with Council Tax of £175? Why do you need a car if you live and work in London?

Yeah, I agree with that. Also having the other half at uni whilst having the kids in day care is also a luxury most couldn't afford. If you can't afford a home because of the choices you made then it's tough.

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Why do you need to rent a house - are flats not good enough? Why do you need to live in an expensive neighbourhood like Wimbledon? Why do you need to live somewhere with Council Tax of £175? Why do you need a car if you live and work in London?

Not having a dig but the level of spend on these things is a personal choice.

I'm also in London. My contribution is I cover all 'family costs' (so food, rent, Council Tax, leccy etc) + my discretionary spend. My better half covers their discretionary spend. In 2015 my total spend will be £24k. That would leave you with a lot of savings from that £80k of yours.

When we arrived in London 9 years ago we landed in Wimbledon as I knew someone here. Personally I am not a big fan. Its a bit too mumsnet for me if you know what I mean.

Until 3 years ago we did live in flats. After 6 years thought I would not put kids life on hold while we rent and let them enjoy a garden. We also had to move to get into a decent school. Previous to this rent was £1150 and you don't get much cheaper than that to house a family down here.

We have looked at moving elsewhere. We have looked at other areas, even moving out to essex. By the time you factor in 2 x train costs at £350 a month, plus the £1200 you pay for a house out there, the costs are equivalent.

e.g. http://www.rightmove.co.uk/property-to-rent/property-38677683.html/svr/2706You don't get much for your money.

Do you have 2 kids? 24k is very good going if you do. If it were just me I could live on nothing.

Why do we have a car? The wife would commute to Uni in guildford which was 30 mins down the A3 in car taking our first baby to daycare next to the campus. Not very convenient by train and a none starter with a baby. We like to go on day trips to the seaside with our kids. My parents are in Yorkshire so to take the kids to see grandparents a car is handy.

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Yeah, I agree with that. Also having the other half at uni whilst having the kids in day care is also a luxury most couldn't afford. If you can't afford a home because of the choices you made then it's tough.

Sure many may not be able to afford that unless you get it paid for by the state.

Sorry but being able to allow your wife to invest in her career and so bring in more in the future does not really qualify as my perception of rich. Sure, fortunate to be able to do it, but I had my years of not being able to eat or pay rent while I skilled up in my career.

I buy a tent off ebay so we can go on a camping holiday after having no holidays for three years. We did have one nice dinner out for a treat. Not really feeling rich at that point either.

Part time handyman in my last apartment block living in council house getting tax credits with several children used to go to Jamaica 3 times a year.

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When we arrived in London 9 years ago we landed in Wimbledon as I knew someone here. Personally I am not a big fan. Its a bit too mumsnet for me if you know what I mean.

Until 3 years ago we did live in flats. After 6 years thought I would not put kids life on hold while we rent and let them enjoy a garden. We also had to move to get into a decent school. Previous to this rent was £1150 and you don't get much cheaper than that to house a family down here.

We have looked at moving elsewhere. We have looked at other areas, even moving out to essex. By the time you factor in 2 x train costs at £350 a month, plus the £1200 you pay for a house out there, the costs are equivalent.

e.g. http://www.rightmove.co.uk/property-to-rent/property-38677683.html/svr/2706You don't get much for your money.

Do you have 2 kids? 24k is very good going if you do. If it were just me I could live on nothing.

Why do we have a car? The wife would commute to Uni in guildford which was 30 mins down the A3 in car taking our first baby to daycare next to the campus. Not very convenient by train and a none starter with a baby. We like to go on day trips to the seaside with our kids. My parents are in Yorkshire so to take the kids to see grandparents a car is handy.

Nicely demonstrates how it takes all kinds. Thanks for sharing.

I also landed in a 'nice area' when I first arrived. I chose to leave as to stay would mean delaying/never achieving Financial Independence and Early Retirement. Criteria was a new build flat (yeh, I know they are built cheaply but as a renter it'll last for the period I need it) as they are well insulated meaning very little heating required. I also chose/choose to live in an 'up and coming area' of London to keep the rent down but paid a little extra in the neighbourhood as wanted to be a short well lit main road distance from a Tube station for security reasons. Also live near to some big parks so a garden is not required.

I do have a car now as I need it for my work. I did however go many years without one. Sure being without one is not as convenient but it's all about priorities.

Eight years on and this family is not discussing whether to stay in Wimbledon or move to Tooting (long time since I've in that neck of the woods so probably expensive by now). We're discussing whether we should move to Herefordshire, Italy, Spain, Malta or Cyprus. I (and my family) prefer that to bigger house and nice car discussions.

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Sure many may not be able to afford that unless you get it paid for by the state.

...

Part time handyman in my last apartment block living in council house getting tax credits with several children used to go to Jamaica 3 times a year.

I agree that life is certainly not fair. My only thought to this is don't let it distract you from what's really important - family and friends.

I came to HPC in 2007 just wanting to buy a small family home and was quick to align myself with the injustice of it all. It's why I called myself wish I could afford one. In addition to monitoring progress here in the UK what I am thankful for is that I rather than lying on a mortgage application I enacted a Plan B which is now not far off being complete.

Just remember we now live in a globalised world which rewards those that have capital rather than those that work hard. Tax then sees that anyone who works hard has large portions of it extracted to 'help the more needy' at the expense of those with the capital. We also live in a world where it is not normal to pay £500k or more for a modest family home, that's just a UK (and a few other mad countries) problem. You can complain about how unfair it all is or you can get on the side of capital and in parallel look outside the South East of England for opportunities.

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Nicely demonstrates how it takes all kinds. Thanks for sharing.

I also landed in a 'nice area' when I first arrived. I chose to leave as to stay would mean delaying/never achieving Financial Independence and Early Retirement. Criteria was a new build flat (yeh, I know they are built cheaply but as a renter it'll last for the period I need it) as they are well insulated meaning very little heating required. I also chose/choose to live in an 'up and coming area' of London to keep the rent down but paid a little extra in the neighbourhood as wanted to be a short well lit main road distance from a Tube station for security reasons. Also live near to some big parks so a garden is not required.

I do have a car now as I need it for my work. I did however go many years without one. Sure being without one is not as convenient but it's all about priorities.

Eight years on and this family is not discussing whether to stay in Wimbledon or move to Tooting (long time since I've in that neck of the woods so probably expensive by now). We're discussing whether we should move to Herefordshire, Italy, Spain, Malta or Cyprus. I (and my family) prefer that to bigger house and nice car discussions.

Really pleased things have worked out for you. Genuinely.

We tend not to have bigger house or nice car discussions. As I said I complain at every non essential spend or anything that may be construed as luxury. I am fighting very hard with the wife to give up all non essential spending such as swimming lessons and other activities for the kids and her gym. I have cancelled my gym membership which was subsidised anyway. Really don't appreciate you portraying me as some fatuous idiot debating bigger house or nicer car. Tend to be can we move to a cheaper house and do we need the car still discussions actually.

Unfortunately for the couple of hundred pounds a month we might save on renting in Peckham or whichever up and coming areas are left its not worth uprooting the kids and putting them in a cr4p school. We have done the school with the disastrous demographic and frankly didn't like it and let me tell you I am very multicultural and no middle class snob.

Not saying that we couldn't have made some more optimal choices and over time we may not have gone over several hundred a month. I tell you its easy to do but we are now in a position to pay our way out of it and begin to get ahead again. 3 years ago we had cash in the bank. I did take 6 months off to work on a personal project between contracts. The intention was to make something productive but it failed. Was only meant to be a couple of months but again easy to get tunnel vision on these things and a couple of months turns into 6.

We have also talked about moving to Berlin. Kinda had enough of being here now unless it turns around. Anyway now we have made the investment in the wife's career she is flying along and we will come out on top. The kids are happy in their school. I have managed to avoid becoming a mumsnet numpty and more importantly managed to avoid the wife becoming a mumsnet numpty so all looking good.

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...Really don't appreciate you portraying me as some fatuous idiot debating bigger house or nicer car. ...

Many apologies if that was how it was seen. That was not my intention at all.

...

We have also talked about moving to Berlin. Kinda had enough of being here now unless it turns around. Anyway now we have made the investment in the wife's career she is flying along and we will come out on top. ...

Why don't you do it for a few years? (disclosure: have done no research on Germany so anecdotal only) If you can secure similar salaries then surely you're going to come out on top financially given lower home prices. In addition the kids pick up a foreign language which might just help them later in life.

I genuinely wish you well with it all. It sounds like you are (or have) turned a corner. Make hay while the sun shines. The sooner you can get to a point where your spending is a lot less than your earnings then the sooner the world starts to take on a a very different look.

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I agree that life is certainly not fair. My only thought to this is don't let it distract you from what's really important - family and friends.

I came to HPC in 2007 just wanting to buy a small family home and was quick to align myself with the injustice of it all. It's why I called myself wish I could afford one. In addition to monitoring progress here in the UK what I am thankful for is that I rather than lying on a mortgage application I enacted a Plan B which is now not far off being complete.

Just remember we now live in a globalised world which rewards those that have capital rather than those that work hard. Tax then sees that anyone who works hard has large portions of it extracted to 'help the more needy' at the expense of those with the capital. We also live in a world where it is not normal to pay £500k or more for a modest family home, that's just a UK (and a few other mad countries) problem. You can complain about how unfair it all is or you can get on the side of capital and in parallel look outside the South East of England for opportunities.

Thanks for the advice. Since reading HPC I have become a lot more educated about economics, money, investment etc. In truth I was completely ignorant to all of that that before. I come from a pretty poor family where when we were kids we lived month to month. Investment and wisdom with money is just not something I was brought up with.

I learn a lot from how people talk about managing money on this site at various levels from average earners to high earners. I recall a story from someone mentioning that they would only have orange juice as a treat once a month or something and I use this as a story to illustrate to my wife what you need to do to buy your freedom.

I have spent much of my life trying to build tech projects for myself. I was doing startups before it had a name. Unfortunately not all tech projects turn into multi-billion success stories (It did for some of my good friends) and I have been pretty skint the whole time so again investment and managing my salary toward retirement was not my path.

Anyway, getting really off topic here.

I think I just wanted to say that I don't really feel rich to the point that should I have a complete mental collapse and decided to buy a house, that I should be denied HTB that my taxes bl00dy pay for. 100k is not rich its the middle and its the bit of the middle that pays for a lot of other people's HTB. Something along those lines

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Why do you need to rent a house - are flats not good enough? Why do you need to live in an expensive neighbourhood like Wimbledon? Why do you need to live somewhere with Council Tax of £175? Why do you need a car if you live and work in London?

Not having a dig but the level of spend on these things is a personal choice.

I'm also in London. My contribution is I cover all 'family costs' (so food, rent, Council Tax, leccy etc) + my discretionary spend. My better half covers their discretionary spend. In 2015 my total spend will be £24k. That would leave you with a lot of savings from that £80k of yours.

His 80k will be before tax.

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Many apologies if that was how it was seen. That was not my intention at all.

Why don't you do it for a few years? (disclosure: have done no research on Germany so anecdotal only) If you can secure similar salaries then surely you're going to come out on top financially given lower home prices. In addition the kids pick up a foreign language which might just help them later in life.

I genuinely wish you well with it all. It sounds like you are (or have) turned a corner. Make hay while the sun shines. The sooner you can get to a point where your spending is a lot less than your earnings then the sooner the world starts to take on a a very different look.

Thanks.

Our oldest will be going to secondary school in two years, wife will have a couple years experience and we will be debt free. Just got to sit it out for now and pay down the debt.

Then we will review where to go.

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Thanks for the advice. ...

Just my story and beliefs. Certainly not advice and of course worth exactly what you paid for it.

...I come from a pretty poor family where when we were kids we lived month to month. Investment and wisdom with money is just not something I was brought up with.

I'm identical to yourself. No bank of mum and dad and certainly no inheritance. If I get it wrong then I have to dig myself out of it with nobody to help.

I think I just wanted to say that I don't really feel rich to the point that should I have a complete mental collapse and decided to buy a house, that I should be denied HTB that my taxes bl00dy pay for. 100k is not rich its the middle and its the bit of the middle that pays for a lot of other people's HTB. Something along those lines

This table might prove useful. It's a little out of date but it shows that if you are earning (which is of course very different to dividends/interest from capital) £100k then you are pretty close to being in the top 2% of earners in this great country. Of course high earnings like you are on don't make you rich (you become rich by accruing capital/wealth) but £100k is in my view a lot of money and gives you opportunity that the vast majority of the population can only dream of.

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Government intervention in housing market has unintended consequences (again) shock.....there's a lesson in there somewhere.

Indeed. Who'da thunk it?

Even Gordon Brown, in his maddest of moments, never came up with anything as nasty as this spiteful scheme.

It was never really designed to help first time buyers. It was designed to help a very well organised housebuilders lobby. Steve Morgan, boss of Redrow Homes was particularly vocal, and seemed to have the PMs'ear..

Here he is in 2010 complaining loudly that banks wouldn't give easy money to people tempted by his firm's product

http://www.constructionenquirer.com/2010/11/04/redrow-boss-blasts-mortgage-shortage-for-buyers/

Clearly, what a conservative PM should have said to Morgan and his ilk was something like "..drop your prices old boy, thats what businesses have done to deal with excess stock since time began."

What we actually got was HTB.

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When your son starts secondary school it will be more difficult to make the move.

My wife and I decided to get out of Paris in the early 90s. Crazy HPI and no good for bringing up kids.

Moved to cheaper area 100s of Kms away. changed jobs. I travel a bit more but has been well worth it.

IT these days means I can do my work almost anywhere.

Good luck with your choices btw.

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This table might prove useful. It's a little out of date but it shows that if you are earning (which is of course very different to dividends/interest from capital) £100k then you are pretty close to being in the top 2% of earners in this great country. Of course high earnings like you are on don't make you rich (you become rich by accruing capital/wealth) but £100k is in my view a lot of money and gives you opportunity that the vast majority of the population can only dream of.

Over 100k is our combined income. Mine is 82.5k and wife is 35k now (She just got a raise a month ago after finishing grad year from 30k) That puts me personally in the top 4 or 5% and I get it, I earn good money. However paying fees for Uni, Child Care etc adds up. I considered it a worthwhile investment and it will now pay off. If you think about it from another angle its no more debt than the average grad leaves education with now. I have no idea how those guys are going to cope with 30 - 40k worth of debt. It is demoralising enough when you are earning what we are.

Sure I could have invested elsewhere, but our chosen investment paid 35k last year and is now paying 35k a year and that will grow rapidly to be 60 - 70k in a couple of years. We can then take the surplus earnings and go all in on Bitcoin!! :ph34r:

Once I have a bit in the bank again, I will start to apply the learnings I have gained here and begin to invest. Have to say I am a bit scared I will f*** it up and lose it but got to give it a try.

When your son starts secondary school it will be more difficult to make the move.

My wife and I decided to get out of Paris in the early 90s. Crazy HPI and no good for bringing up kids.

Moved to cheaper area 100s of Kms away. changed jobs. I travel a bit more but has been well worth it.

IT these days means I can do my work almost anywhere.

Good luck with your choices btw.

Thank you. We were going to time it with him starting secondary school.

The wife is starting to warm up to the idea that there is life outside of London.

Unfortunately Mrs Sawitcoming doesn't read HPC so she doesn't always see what I see.

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