Jump to content
House Price Crash Forum
Sign in to follow this  
Conquistador

Who Will Buy Today's Help To Buy Newbuilds Tomorrow?

Recommended Posts

Apologies if I have missed previous discussion, but if Help to Buy enables first-time buyers to buy newbuild property that they couldn't ordinarily afford, to whom will they sell it to in, say, 2022? The purchase price was artificially boosted by government subsidy, but the house is no longer a new build, so its sale price will not benefit from subsidised demand (via HTB equity loan, if it continues). Won't the 'owners' be trapped?

Is the hope that wages will have increased in the meantime? Or will the mother of all Mega Help to Buy (mortgage guarantee) schemes support the next generation of purchasers? What is the official thinking on this (if any)?

Share this post


Link to post
Share on other sites

I beleive the current HTB is an enhancement of the first HTB which didnt HTB second hand homes whereas now it does...some refinement of that nature took place, bit hazy this morning, oh, and the deadline for the temporary scheme was extended.

Edited by Bloo Loo

Share this post


Link to post
Share on other sites

Everyone's a winner when you can own your own home.

That massive loan? Stay quiet whilst your employer screws you over conditions and wages cos no-one can/wants to buy your overpriced house that you had to buy because you didn't want to miss the s̶t̶a̶t̶u̶s̶ boat.

Don't know what will happen if wages don't increase, prices rise but above all if interest rates rise. Speaking in London, things are tight for many middle class professionals who are FTB's.

So yeah, they'll have to stay put. I still remember the glut of New build /flats after the recession that still haven't got their full value back in Manchester and Leeds city centres.

Edited by Tapori

Share this post


Link to post
Share on other sites

i suspect those buying new builds don't care too much about being trapped in negative equity. anyone with any sense of value don't buy new builds.

Will be some people who think that the obvious rip off instant negative equity of buying new builds will just limit some gains from future HPI.

a crash is coming but the government seem to be determined to take sterling down with the housing market.

Share this post


Link to post
Share on other sites

Apologies if I have missed previous discussion, but if Help to Buy enables first-time buyers to buy newbuild property that they couldn't ordinarily afford, to whom will they sell it to in, say, 2022? The purchase price was artificially boosted by government subsidy, but the house is no longer a new build, so its sale price will not benefit from subsidised demand (via HTB equity loan, if it continues). Won't the 'owners' be trapped?

Is the hope that wages will have increased in the meantime? Or will the mother of all Mega Help to Buy (mortgage guarantee) schemes support the next generation of purchasers? What is the official thinking on this (if any)?

This is what I've been saying and wondered if boosting Help to Buy Bail Banks in London from 20% to 40% was partly to help trapped people. If they stretch themselves too far at 20% for a new build flat and then children arrive, how can they afford a larger place without a larger equity loan? If prices rise the gap between the smaller and larger property will be higher but also they have to repay the equity loan. Help to Buy Bail Banks on existing houses is not an equity loan it's just a mortgage guarantee for the bank in the event that the buyer cannot pay and maybe gets repossessed.

New build prices are inflated because of the scheme but when they sell as existing houses without the governbanment's shared equity, who will be able to afford the whole house? Builders are making a killing inflating prices but lots of these new builds could be really difficult to sell later as existing houses?

It's a black hole of liability and the governbankment needs to stop digging but once it's started how do you stop? From day one I've said they can never end it overnight, it would result in a huge crash, if people could only buy what they could really afford. It can only be tapered down over years. Instead they might keep digging and up it from 20% to 40% countrywide. Then extend the equity loan to existing houses.

Share this post


Link to post
Share on other sites

i suspect those buying new builds don't care too much about being trapped in negative equity. anyone with any sense of value don't buy new builds.

Will be some people who think that the obvious rip off instant negative equity of buying new builds will just limit some gains from future HPI.

a crash is coming but the government seem to be determined to take sterling down with the housing market.

I've been saying for ages that Osbanker has gone 'all in'. Each day Help to Buy Bail Banks is running, sterling and house prices are becoming more entwined. The governbankment argue that the scheme hasn't boosted prices based on it's sales but what it did is change sentiment. When the governbankment declares it wants a housing bubble as Osbanker did, banks start lending more and if they lend it people come!

Share this post


Link to post
Share on other sites

Apologies if I have missed previous discussion, but if Help to Buy enables first-time buyers to buy newbuild property that they couldn't ordinarily afford, to whom will they sell it to in, say, 2022? The purchase price was artificially boosted by government subsidy, but the house is no longer a new build, so its sale price will not benefit from subsidised demand (via HTB equity loan, if it continues). Won't the 'owners' be trapped?

Is the hope that wages will have increased in the meantime? Or will the mother of all Mega Help to Buy (mortgage guarantee) schemes support the next generation of purchasers? What is the official thinking on this (if any)?

What many do not see when they buy their first home is the cost of the next step, especially from a newbuild which will fall in value anyway. With the property Ponzi in full swing over the last few years many will not be able to make this as the cost will be prohibitive. Incomes have gone up far, far less than prices and most will only be able to trade up on the basis of a windfall, not increases in income. That £400K shoebox in Shoreditch will only look good if you move to Caithness, but most will not be able to do that and the vast majority will be stuck in the shoebox. They will not be pleased.

Share this post


Link to post
Share on other sites

As each day rolls on it does look like the Gov had gone all in. I still think there will be a crash but the crash is now set to trash our currency.

will be a huge task to decouple the economy from the housing bubble now.

Are we no longer the cleanest of dirty shirts? will the government eventually break ranks to save sterling? At what point? When it's clear the housing market is toast?

guess we don't know if these help to buy new build debt heads have made the right choice or not. They have taken an extremely high risk position, not much they can now than sit and hope.

perhaps the HTB 40% is supposed to delay the crash a little longer until the next recession hits (so they can blame it on external factors)

Edited by jiltedjen

Share this post


Link to post
Share on other sites

They won't worry about that just think of all the rent money they won't be throwing down the drain.

100 times this. This is the argument that is always thrown to me. Which is ridiculous because to buy the house i rent in the same location - which is key - I'd have to pay 550k.

Share this post


Link to post
Share on other sites

In 2022 there will be 'HtB London22' where you need just 2% deposit and the 88% taxpayer funded interest free loan for 22 years mean you will only need a mortgage to cover the other 10% as the average London property price will have doubled to £1,000,000 from £500,000. So you can still buy on 4X your £25,000 salary. No need to worry ... they have it all in hand and in 2022 Carney says that interest rates may at sometime possibly or probably will or could rise.

A glimpse into dystopia in 6 years time. May not be far off the mark. :blink:

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   62 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.