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

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Its a TRAP to get the young in DEBT at Bubble prices. It they really want to 'Help' then they must allow Free Market to prevail in housing and let it COOL off so the young have to borrow LESS.  

And perhaps there is massive economic Turbulance ahead with Jobs losses as London looses its status as Gateway to Europe forcing major Corporation to move HQs to EU capitals...

Not to mention the Interest Rate Rises that will increase Mortgage Payments which will be  very High to start with at current prices.

 

YOUTH BEWARE! you are being sacrifised by a clueless PM.

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2 minutes ago, RickyM said:

Its a TRAP to get the young in DEBT at Bubble prices. It they really want to 'Help' then they must allow Free Market to prevail in housing and let it COOL off so the young have to borrow LESS.  

And perhaps there is massive economic Turbulance ahead with Jobs losses as London looses its status as Gateway to Europe forcing major Corporation to move HQs to EU capitals...

Not to mention the Interest Rate Rises that will increase Mortgage Payments which will be  very High to start with at current prices.

 

YOUTH BEWARE! you are being sacrifised by a clueless PM.

Agree 100%. Too many youngsters have fallen for these help schemes that are traps for them. 

Of course people in the UK are hell bent on home ownership. Trying to make them see sense just angers them.

If we get a hard Brexit then maybe some of these young will have to give up their rabbit sized houses when mortgages become unaffordable due to sky high interest rates.

Losing their homes will be the best thing that ever happens to them in the long game. Debt is a trap. Debt is evil.

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2 hours ago, ExiledMatty said:

Agree 100%. Too many youngsters have fallen for these help schemes that are traps for them. 

Of course people in the UK are hell bent on home ownership. Trying to make them see sense just angers them.

If we get a hard Brexit then maybe some of these young will have to give up their rabbit sized houses when mortgages become unaffordable due to sky high interest rates.

Losing their homes will be the best thing that ever happens to them in the long game. Debt is a trap. Debt is evil.

If you think your household income will rise ~30% in 5 years then go for it.

Otherwise avoid.

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Most of those I knew used this scheme to buy in home counties but are now complaining that they have to pay more as the equity value increased since they bought.

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9 hours ago, regprentice said:

The MMR rules could be a driving factor in people going straight for a larger home. The rules actively penalise families needing childcare in a way that has never been the case before.

Shortly after MMR came in i read a post on MSE from a broker testing the new rules through a building societies online system. IIRC A young single guy earning around £17k would be authorised for about £80k in lending. If you changed the application to show a non-working spouse and a young child in the household and made no other changes the system would authorise less than £1k in lending. Virtually nothing.

If you havent upsized before you have to admit you're having your first kid you are stuffed. Seen quite a few threads on MSE along the lines of 'do i have to tell the bank im pregnant','maternity leave starting before completion - help' etc...

You could argue that til the late 70s/mid 80s mortgage lending criteria was equally strict as MMR has brought in and your bank manager would go through your budget with a fine tooth comb... But back then single income households were the norm.

Another factor is that lending standards are lower using the scheme. As I mentioned on here earlier this year, I know two couples with an impaired credit history refused mortgages on non new builds. They were told by the mortgage broker to use Help to Buy Bail Banks. They each got a larger mortgage on a larger house without a problem. Obviously the banks will lend more when the taxpayer hands over 20% if it's later sold at a loss. Both those couples were selling houses so not really FTBs.

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Notice the wording in the statement says £10bn for 135,000 PEOPLE, not houses/flats.  If they are assuming dual occupancy, that's only going to be 67,500 houses/flats anyway and more of a prop for house builders. 

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Just heard Spreadsheet Phil squirming on Radio 4 about how this will help people; the interviewer wasn't buying it.  Magic Money Trees were mentioned and Phil's discomfort was palpable. The Tories really haven't got a clue how much hatred they are stoking up by this ludicrous help for the house building mafia.

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The Help to Buy winners celebrate the good news - 

Barratt Developments Plc
LON: BDEV - Oct 2, 8:31 AM GMT+1
638.00GBX23.50 (3.82%)
Persimmon plc
LON: PSN - Oct 2, 8:33 AM GMT+1
2,680.00GBX98.00 (3.80%)
Bellway plc
LON: BWY - Oct 2, 8:34 AM GMT+1
3,401.00GBX104.00 (3.15%)

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To be fair if Help To Buy is only available on new builds, it should actually help to depress prices on older homes. After all, landlords are supposedly no longer buying. It's hard to see many buyers for your average 2 bed terrace at anywhere to close to current prices. Still a massive waste of money though.

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17 hours ago, durhamborn said:

They seem to of lost their minds.We have a Labour party that are offering to collapse the economy while stealing peoples assets (shares) yet they can only come up with this.The Tories need to remove May and Hammond within months.They simply cannot carry on with bonkers policy like HTB.They seem to of forgot in the first two years of government you do the nasty stuff,then do the good stuff the last three years.May really does come across as a robot.It will be interesting to watch Boris give his speach and the hall reaction.I cant see any way May takes the Tories into the next election.She is clueless.

Goes back to QE/BoE  suppressing price signals on government debt.

Doign that relies on the Pols and voters to be sensible and knuckle down for 10 years, reducing the debt and rolling back all of that loon Brown's VoteFoorMe! schemes.

The coalition didnt. They piled on more debt.

The Cons had a go, fialed (by LibDem peer),then Brexit happened, May go in. Now shes finding hard to compete against Corbyn loons. All down to Gdiot not allowing houses to falal and not gettign rid of TCs and rolling Brown's 2m new public sector make-jobs.

The markets really *needs* to be pushing Gilt yileds higher. K has too much political risk at the mo.

But the markey is mainly the BoE.

So, after failing to regulate banks 200-2007, which resulted in 80% of the UK bans going bust.

Now the BoE have used their all seeing cleverness to remove market signals from Gilts. And look whats happening.

idiots.

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Funny isn't it that they can conjour up £10 billion to give to their house builder mates but they can't invest £10 billion on a massive social house building programme. I suppose the logic is that social housing tenants don't vote Tory. By the looks of things, nobody will be voting Tory soon...

Edited by fru-gal

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4 minutes ago, fru-gal said:

Funny isn't it that they can conjour up £10 billion to give to their house builder mates but they can't invest £10 billion on a massive social house building programme. I suppose the logic is that social housing tenants don't vote Tory. By the looks of things, nobody will be voting Tory soon...

This tiny section of the universe does appear to be in a confused state. Even those supposedly in charge aren't in charge. A vacuum of sensibility seems to have been created. Perhaps that is a result of certain aspects of society being roughly the same for too long. Complacency causes all sorts of ills.

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Just now, fru-gal said:

Funny isn't it that they can conjour up £10 billion to give to their house builder mates but they can't invest £10 billion on a massive social house building programme. I suppose the logic is that social housing tenants don't vote Tory. By the looks of things, nobody will be voting Tory soon...

Apart from the fact a lot of these end up with social tenants in them.My friends daughter has just been given one in Darlington built by Keepmoat Homes.They sell most with help to buy,but she has just been given one free off the HA.She had a baby at 17,housing benefit paying the rent.The person next door bought theirs on HTB,they paid £103k + the HTB loan.3 bed link houses.The call them "eco" houses and estates.Even a few boards pushed into places saying what wildlife will live there etc.A bit of water for the drainage,but the houses are rammed together,very little parking,tiny postage stamp gardens.The HAs pre buy some of the houses before they build them and they also buy up others if they arent selling.Most of these new build estates will end up with 30%+ social tenants.They are nice enough inside etc and a good use of space,but probably worth half the HTB price,and the estates themselves have a very good chance of looking terrible in 10 years.

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11 hours ago, regprentice said:

The MMR rules could be a driving factor in people going straight for a larger home. The rules actively penalise families needing childcare in a way that has never been the case before.

Shortly after MMR came in i read a post on MSE from a broker testing the new rules through a building societies online system. IIRC A young single guy earning around £17k would be authorised for about £80k in lending. If you changed the application to show a non-working spouse and a young child in the household and made no other changes the system would authorise less than £1k in lending. Virtually nothing.

If you havent upsized before you have to admit you're having your first kid you are stuffed. Seen quite a few threads on MSE along the lines of 'do i have to tell the bank im pregnant','maternity leave starting before completion - help' etc...

You could argue that til the late 70s/mid 80s mortgage lending criteria was equally strict as MMR has brought in and your bank manager would go through your budget with a fine tooth comb... But back then single income households were the norm.

I went onto HSBC yesterday, dual income (£50k total), 2 dependents ... came up with max mortgage of £190k approx. So in that instance kids didnt make a difference. It didnt ask age of kids, or childcare costs.... i was only at the very basic calculator.

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1 hour ago, dougless said:

Just heard Spreadsheet Phil squirming on Radio 4 about how this will help people; the interviewer wasn't buying it.  Magic Money Trees were mentioned and Phil's discomfort was palpable. The Tories really haven't got a clue how much hatred they are stoking up by this ludicrous help for the house building mafia.

And he was given a very, very easy Boomer friendly interview.

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12 minutes ago, durhamborn said:

Apart from the fact a lot of these end up with social tenants in them.My friends daughter has just been given one in Darlington built by Keepmoat Homes.They sell most with help to buy,but she has just been given one free off the HA.She had a baby at 17,housing benefit paying the rent.The person next door bought theirs on HTB,they paid £103k + the HTB loan.3 bed link houses.The call them "eco" houses and estates.Even a few boards pushed into places saying what wildlife will live there etc.A bit of water for the drainage,but the houses are rammed together,very little parking,tiny postage stamp gardens.The HAs pre buy some of the houses before they build them and they also buy up others if they arent selling.Most of these new build estates will end up with 30%+ social tenants.They are nice enough inside etc and a good use of space,but probably worth half the HTB price,and the estates themselves have a very good chance of looking terrible in 10 years.

I see lots of these estates. They will be slums in a decade.

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1 minute ago, Freezer? Best place for it said:

And he was given a very, very easy Boomer friendly interview.

He also insinuated that the two year Brexit 'transition period' might last more than two years. :rolleyes:

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1 hour ago, Ballyk said:

The Help to Buy winners celebrate the good news - 

Barratt Developments Plc
LON: BDEV - Oct 2, 8:31 AM GMT+1
638.00GBX23.50 (3.82%)
Persimmon plc
LON: PSN - Oct 2, 8:33 AM GMT+1
2,680.00GBX98.00 (3.80%)
Bellway plc
LON: BWY - Oct 2, 8:34 AM GMT+1
3,401.00GBX104.00 (3.15%)

Share prices were on the rise in the week before the announcement. I wonder how many people got wind of this announcement?

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19 minutes ago, Grab_Some_Popcorn said:

I went onto HSBC yesterday, dual income (£50k total), 2 dependents ... came up with max mortgage of £190k approx. So in that instance kids didnt make a difference. It didnt ask age of kids, or childcare costs.... i was only at the very basic calculator.

The website calculator is to get you in. 4x is the absolute upper limit HSBW will lend you.

The formal application will ask for recurring spend and remove it from income.

Using your 50k, theyll remove 1k for ctax, 1k for utils, ~5k for cars/travel.

If the kids are pre school age and in childcare, thats going t cost ~1k/m - Mine did.

That 50k quickly becomes 35k which theyll apply a lower multiple - 3 x = ~100k mortgage.

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26 minutes ago, spyguy said:

The website calculator is to get you in. 4x is the absolute upper limit HSBW will lend you.

The formal application will ask for recurring spend and remove it from income.

Using your 50k, theyll remove 1k for ctax, 1k for utils, ~5k for cars/travel.

If the kids are pre school age and in childcare, thats going t cost ~1k/m - Mine did.

That 50k quickly becomes 35k which theyll apply a lower multiple - 3 x = ~100k mortgage.

You are correct I did the calculator on website gave me a decent mortgage total , went into branch gave them my childcare figures and halved what they were prepared to lend. 

http://www.cityam.com/273050/uk-must-get-off-help-buy-binge

Quote

 

It's been clear for some time that housebuilders are hooked on the help to buy drug.

Now it seems the government is, too.

In a bid to ensure that the Tory party conference has something to unveil, Theresa May has confirmed that an additional £10bn will be pumped into the scheme, helping (we are assured) another 135,000 people get on the housing ladder with as little as a five per cent mortgage.

 

Be interesting to here Labours response because they were keen to keep the policy in their election manifesto ...

For those buying I suspect they will end up trapped , once they use the HTB loan up on the new build people buying from them can not and have to stump up the full price and I suspect many won't .Shared Ownership is another shambles , article in Evening standard last week showing how great it is couple buy 25% share property has increased 75k since they brought so they have more equity ..they fail to mention the part where the 75% they don't own has gone up more than their 25% so yes they have gained some equity but that has been eaten up by the growth in the larger share .Basic maths if the property goes up 100k and you own 25% thats 25k for you but 75K on top of the price so actually your now 50K further from owning plus interest !!!!!!

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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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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