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The Reason For 40% London Htb ?

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Great stuff ! ..

another ppi type scandal in the making

We went on to speculate just what the further consequences might be. Apart from a crash, he predicted that people who were taken in by the “85 per cent sold” boasts might seek compensation. They had been led to believe 85 per cent were sold, and that wasn’t the case. Stand by for possible legal actions against developers and their agents.

It is, we agreed, fraudulent misrepresentation to claim that a property is sold with no certainty the transaction will be completed. Receiving a deposit is not the same as completion.

Anyone who has been induced into paying a sky-high price for an apartment in the belief that the bulk of the other units in the block have been sold and demand is huge – when they have not been sold at all – could, we believe, have good grounds to sue.

I'm having that quote for my sig.

Battersea Power stn flat blocks remind me of sets in Terry Gilliams film Brazil. That's the developers profits going up the chimney

Brazil%2001.jpg

Edited by Saving For a Space Ship

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I sincerely hope that's true. Also, isn't the lending criteria for Htb that you can show you can pay back the loan after five years? With 40% extra on top that's a massive hike to your mortgage.

Or will people bank on huge gains so they can remortgage. The whole thing is very murky.

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I sincerely hope that's true. Also, isn't the lending criteria for Htb that you can show you can pay back the loan after five years? With 40% extra on top that's a massive hike to your mortgage.

Or will people bank on huge gains so they can remortgage. The whole thing is very murky.

MMR only applies to the mortgage, you don`t have to pay back the loan after five years but there is a "fee" i think the HTB equity loans has to be paid back after 25 years

HTB is basically shared ownership in a different dress

Edited by long time lurking

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I thought the fee was interest on the loan, it's only interest free for five years. So what rate is it going to be charged at?

The fee is 1.75 per cent on the equity loan and that is increased by the percentage rise in RPI each year.

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There is of course another reason for this policy. They want Zac Goldsmith to become Mayor - his team apparently promoted it.

Private renters vote Labour - prospective homeowners are more likely to vote Tory.

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There's no affordability requirements for the HTB portion as far as I know. I think if you have a 5% deposit and can pass MMR on the remaining 55% you can buy.

HTB is an insane policy.

And it is paid for by public sector cuts of front-line services. These savings can go to more HTB schemes. Whoop.

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So after five years you're hit with an extra loan for up to 200k at nearly 2% on top of any potential increases in rates on your mortgage. Sounds like the sword of Damocles.

Wonder if their actual plan is to write off the interest...

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So after five years you're hit with an extra loan for up to 200k at nearly 2% on top of any potential increases in rates on your mortgage. Sounds like the sword of Damocles.

Wonder if their actual plan is to write off the interest...

Except the value of the house has gone up so you get some kind of equity release strategy to get money from someone, or your rich uncle or something. And if the value goes down so does the value of the loan. Amazing.

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There's no affordability requirements for the HTB portion as far as I know. I think if you have a 5% deposit and can pass MMR on the remaining 55% you can buy.

HTB is an insane policy.

It's a dreadful scheme if you might want to move?

I thought London might have been upped to 40% because people who bought using 20% could be stuck and unable to afford a larger house, when they have children. 40% on new builds gives them the option to sell the one bought using 20% and upsize with the larger 40% equity loan.

However now London is 40% on new builds, how could anyone sell one of those in the future? Who will want to buy it, once it's become an existing home instead of a new build? As an existing house there is no equity loan to help anyone pretend they can afford it.

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Anyone who has been induced into paying a sky-high price for an apartment in the belief that the bulk of the other units in the block have been sold and demand is huge – when they have not been sold at all – could, we believe, have good grounds to sue.

This to me confirms what most on here already know , these high prices are nothing to do with supply and demand ,it`s just a speculative bubble

If the article`s right ,and the Chinese only had to stump up £2k for a seat at the table ,it all becomes very clear what's been the driving force

Best of luck getting the balance of the deposit though

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When you look at most of these new builds they are on huge developments with thousands of flats in tower blocks.

A lot will be rented to council tenants and by buy to let landlords to private tenants. Maintenance will inevitably be poorly done by useless management companies with few actively complaining as few have a long term stake.

All I will say is are we Buikding the council estate slums of the future - which will no doubt impact on values as more and more are crammed in as the population grows.

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Great stuff ! ..

another ppi type scandal in the making

"could, we believe, have good grounds to sue. "

Seems unlikely there's a case to sue. Caveat emptor and all that. You paid for the flat as described, not as to others' purchasers. I've never heard of such a case before?

From comments on the article - £2k is very cheap for a deposit? Usually it is 10%?

(and after all, the flats prolly only costs 10% of the purchase price to build :) )

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Two sentences from the Standard's story are wondrous.

"They will need to find a 10 per cent formal deposit within 20 days but developers Galliard are also offering brokers to arrange this funding.

...

But Mr Galman insisted the company would not sell flats to people who could not afford them: “If they are struggling to get the 10 per cent together we will not sell to them, that’s not in anyone’s interests.”"

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£2k reservation fee, 10-20% deposit required within less than a month.

http://www.galliardhomes.com/property/off-plan-property

Where some of the overseas speculators are raising that finance from is a separate question but I'm sceptical that many developers have taken only £2k for many off plan flats.

I know where you are coming from with that ,stranger things have happened ,who would have thought banks would be lending 125% LTV self cert

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The block of flats I lived in last was in London NW1. Most were owned by foreigners (i.e. who did not ordinarily live in London) and were not occupied for most of the year.

I'd not underestimate the desire for foreign investors to buy something that they have no intention of ever occupying or renting out.

However financial changes or climates may limit those who can currently do so,

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