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Help to "Buy" (Sell) to be pumped up

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On 02/10/2017 at 11:41 AM, Sawitcoming said:

So yesterday on Facebook the Shadow Chancellor came out against HTB.  

Labour pretty much have the Tories where they want them.

I suspect they put HTB in their manifesto to outflank the Tories and trick them into extending HTB, making them look to younger people like they're working in the housebuilders' interests. 

Labour also know they just need to wait and sooner or later the London housing market will go off the edge, losing the Tories a lot of votes. They can blame a crash on seven years of Tory decisions. And if the Tories try to bail out the market Labour can scream that it's another bail out for bankers. 

This is of course rather cynical, which is why the biggest chance of Labour missing the open goal in front of them is that they push to hard and voters start to believe the party would be happy to see the economy crash to get into power. That's why the Tories are jumping up and down about the danger of Corbyn and stuff like Labour wargaming a run on the pound. 

 

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20 minutes ago, Sawitcoming said:

I totally agree. Its another £10bn mis spent. Does it mean they are really going to prop up house prices? I think they must recognise what is coming and know that they can not.  I think they are virtue signalling and providing a clear story that when TSHTF and house prices crumble that they were doing all they can to support the market. It also helps to sell a few of their mate's slave boxes.

I think this has some substance.

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4 minutes ago, Democorruptcy said:

I cannot find the original Private Eye article quoted in that forum post. Has somebody had it wiped?

 

Would not be surprised now.

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Excellent article on Mail Online, I could have written this myself - 

http://www.dailymail.co.uk/news/article-4957030/Wealthy-families-exploit-7billion-Help-Buy-home-scheme.html

QUOTE - 

Academics said the scheme – given a £10billion further boost by Theresa May this week – was driving up house prices. ‘Help to Buy is like throwing petrol on to a bonfire,’ said Sam Bowman, of the Adam Smith Institute. ‘This scheme is being used by investment bankers and doctors. They are certainly not the sort of people who the taxpayer should be subsidising.

Luke Murphy of the Institute for Public Policy Research, another think-tank, said Help to Buy had made houses less affordable. ‘The two fundamental problems are that it pushes up property prices and that it is primarily helping those who would have been able to buy anyway,’ he added.

It feels like the media are finally getting it.  Plus a lot more people on this forum now seem to realise HTB inflates prices, and only really helps the housebuilders / land owners.

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This Mail article deserves a topic of its own.

A government survey found that 57 per cent of people using Help to Buy said they could have afforded to purchase a home without the scheme. One in five was not a first-time buyer at all.

Read more: http://www.dailymail.co.uk/news/article-4957030/Wealthy-families-exploit-7billion-Help-Buy-home-scheme.html#ixzz4ulplm8l3 
 

Edited by juvenal

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Without help to buy a single couple in the north west could easily purchase a perfectly good two/three bed terrace, on a nice enough street,  that was built a century ago,  but is of better quailty than your average new build. However, the unwritten rule for houseprice gains is take HTB cash and borrow to the max. 

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18 hours ago, Ballyk said:

It feels like the media are finally getting it.  Plus a lot more people on this forum now seem to realise HTB inflates prices, and only really helps the housebuilders / land owners

 

evening standard last week had a half page article mocking this as a desperate move and talking about how it raises prices.

The data posted before by Beary mc bear face showed that overall it did not seem to inflate prices but it did not separate out new build from rest of market iirc. 

Definitely the media have changed their tune. 

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24 minutes ago, Sawitcoming said:

evening standard last week had a half page article mocking this as a desperate move and talking about how it raises prices.

The data posted before by Beary mc bear face showed that overall it did not seem to inflate prices but it did not separate out new build from rest of market iirc. 

Definitely the media have changed their tune. 

I think it would be very difficult to show that HTB didn't inflate prices, or at least prevent prices from levelling out or settling at a lower level.

Government interference in the market can either support prices, as in HTB or purchasing Mortgage Backed Securities (interesting article on that here - http://www.reuters.com/article/us-markets-mortgages-fed/u-s-fed-buys-7-billion-of-mortgage-bonds-sells-none-idUSKBN1CA2CC?il=0 ).

Or it can enact policies to encourage supply and bring down land and house prices.  Previously councils were allowed to compulsorily purchase land at agricultural prices, then develop themselves or sell off parcels to developers, the increase in value largely paying for infrastructure and facilities such as libraries, etc.  Government now prohibits councils from doing this.

Similarly a tax on land with planning permission 'banked' by developers would encourage the building of houses = more supply.

HTB does little to stimulate supply, rather it is allows the same population of house buyers to bid more for each new property.  In the absence of HTB, land prices would fall (perhaps after a disruptive period where housebuilders incur losses writing down the value of their investments) but this would ultimately feed through to cheaper property.

Help to Buy is therefore a very specific policy choice, aimed not at helping home buyers, but at helping sellers of both land and finished houses / apartments, and preventing banks from making losses.  It leaves taxpayers on the hook for any fall in value, as well as  a great deal of administrative costs.  And apparently, even in these 'non-emergency' times, it is a tap which cannot be turned off.

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34 minutes ago, Ballyk said:

I think it would be very difficult to show that HTB didn't inflate prices, or at least prevent prices from levelling out or settling at a lower level.

Government interference in the market can either support prices, as in HTB or purchasing Mortgage Backed Securities (interesting article on that here - http://www.reuters.com/article/us-markets-mortgages-fed/u-s-fed-buys-7-billion-of-mortgage-bonds-sells-none-idUSKBN1CA2CC?il=0 ).

Or it can enact policies to encourage supply and bring down land and house prices.  Previously councils were allowed to compulsorily purchase land at agricultural prices, then develop themselves or sell off parcels to developers, the increase in value largely paying for infrastructure and facilities such as libraries, etc.  Government now prohibits councils from doing this.

Similarly a tax on land with planning permission 'banked' by developers would encourage the building of houses = more supply.

HTB does little to stimulate supply, rather it is allows the same population of house buyers to bid more for each new property.  In the absence of HTB, land prices would fall (perhaps after a disruptive period where housebuilders incur losses writing down the value of their investments) but this would ultimately feed through to cheaper property.

Help to Buy is therefore a very specific policy choice, aimed not at helping home buyers, but at helping sellers of both land and finished houses / apartments, and preventing banks from making losses.  It leaves taxpayers on the hook for any fall in value, as well as  a great deal of administrative costs.  And apparently, even in these 'non-emergency' times, it is a tap which cannot be turned off.

Oh no doubt. I was not saying that the intention is anything but helping the builders and the banks. there have been studies showing that it does inflate new build prices by the amount helped. However I just observed that the data shown earlier in this thread showed no particular inflation to the market overall.  Support highly likely but importantly the data did not separate out new build from the rest of the market. 

Edited by Sawitcoming

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1 minute ago, Sawitcoming said:

Oh no doubt. I was not saying that the intention is to help the builders and the banks. there have been studies showing that it does inflate prices by the amount helped. However I just observed that the data shown earlier in this thread showed no particular inflation. Support highly likely but importantly it did not separate out new build from the rest of the market. 

I guess in theory it would be slightly deflationary on older properties, as some will perceive HTB as actually 'helping', and will have a preference for a newer property.  But certainly inflationary on all the HTB properties.

It is awful that these HTB buyers it seems aren't necessarily thinking through the future consequences, ie having to find funds in the future to purchase the stake of their house owned by the government.  How strange that the Conservative government is effectively 'nationalising' a % of a huge swathe of private newly built British homes!  

It was sickening to hear on the one hand Theresa May decrying the fact that house prices are 8x earnings, while moments later pushing the policy partly responsible for this happening.  [Sorry if I am ranting!]  

Of course it is not just HTB which is sustaining abnormally high house prices, it's also the low interest rates, inertia, easy lending and a collective lack of consciousness that house prices in the South can actually fall (except in the memories of the older buyers who lived through the early 1990s).

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4 minutes ago, Ballyk said:

I guess in theory it would be slightly deflationary on older properties, as some will perceive HTB as actually 'helping', and will have a preference for a newer property.  But certainly inflationary on all the HTB properties.

It is awful that these HTB buyers it seems aren't necessarily thinking through the future consequences, ie having to find funds in the future to purchase the stake of their house owned by the government.  How strange that the Conservative government is effectively 'nationalising' a % of a huge swathe of private newly built British homes!  

It was sickening to hear on the one hand Theresa May decrying the fact that house prices are 8x earnings, while moments later pushing the policy partly responsible for this happening.  [Sorry if I am ranting!]  

Of course it is not just HTB which is sustaining abnormally high house prices, it's also the low interest rates, inertia, easy lending and a collective lack of consciousness that house prices in the South can actually fall (except in the memories of the older buyers who lived through the early 1990s).

On of the best points I saw on this thread was that who would be able to afford to buy the property from them when they come to sell. If those buyers existed surely they would be buying the new houses. The HTB buyers will lose their 5% deposit and the taxpayer will pick up the bill for the rest of it. :unsure:

Feel free to rant. This is a very rantable topic.

I didn't for one minute believe that TM is trying to help buyers. She knows the game is up. She is positioning herself to say that she did try to support the housing market and at the same time help her mates to offload some of the new build stock.

Edited by Sawitcoming

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@TheCountOfNowhere

On some social-media platform away from HPC, I think you posted an article about 3 building bosses at one developer, and what they recently each took out in dividend payments / profits.

Wasn't it in £10M+ each region?

And then there was some sort of calculation about HTB... how much overall that money to 3 individuals stacked up against all of HTB.

At the time I had red-mist so I didn't take it all in.

A developer that also sells some properties through HTB.    To me a developer who sells anything through HTB is definitely part of all of this.  They don't have to be part of it.

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25 minutes ago, Venger said:

@TheCountOfNowhere

On some social-media platform away from HPC, I think you posted an article about 3 building bosses at one developer, and what they recently each took out in dividend payments / profits.

Wasn't it in £10M+ each region?

And then there was some sort of calculation about HTB... how much overall that money to 3 individuals stacked up against all of HTB.

At the time I had red-mist so I didn't take it all in.

A developer that also sells some properties through HTB.    To me a developer who sells anything through HTB is definitely part of all of this.  They don't have to be part of it.

Can't see HTB as anything other than fraud, perpetrated by a Tory government who were funded by the builders who've profited

 

HPC has gone way past house price and its exposed class opression , corruption, fraud, criminality of the British establishment.

 

If people want to support this by buying into their debt ponzi then go for it, I for one will never buy a house in the UK till the fraudsters are strung up,physically or metaphorically.

Edited by TheCountOfNowhere

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Guest

HTB is the taxpayer lending money to people who can't afford to borrow it. Basically printing money with no hope of getting it back. Senseless.

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7 hours ago, Grab_Some_Popcorn said:

HTB is the taxpayer lending money to people who can't afford to borrow it. Basically printing money with no hope of getting it back. Senseless.

I'm not sure it's even that simple. It's the govt lending extra money to people who simply want to max out, including already well off people. At subsidised rates.

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On 07/10/2017 at 6:41 PM, Sawitcoming said:

On of the best points I saw on this thread was that who would be able to afford to buy the property from them when they come to sell. If those buyers existed surely they would be buying the new houses. The HTB buyers will lose their 5% deposit and the taxpayer will pick up the bill for the rest of it. :unsure:

 

 

Sitting in my local last night I was earwiging a conversation between some people in the area for a conference all about mortgages and house finance etc.

The guys were not your average EA or broker types talking they appeared to be several levels above that judging by the way they were talking and cars being driven.

Anyway they were having an in-depth discussion specifically about second hand homes on HTB schemes and how they were targeting finance on these type of homes for people wanting to buy them or currently living in them and unable to sell or remortgage when the HTB period ended.

The general idea seemed to revolve around the purchaser having minimum 10% deposit they would ‘settle’ out the HTB part of the loan with the government and the purchaser slowly ‘buys’ via monthly ‘rental scheme’ the remaining % of the property back from them, The rental yield quoted was minimum 4.8% (internally).

The elder gent (who introduced himself to me as the Chairman of the conference before his two colleagues arrived) quickly commented how the ‘rental’ side of the equation would have to be rather high for it to work which was indeed how it was supposed to work with the whole process being rinsed and repeated at the end of every fixed term.

Sorry if it sounds a bit vague but that was the general gist of it and I unfortunately had to leave.

BF

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  • 242 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • up 5%



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