First HTB fees due next month

[Old Guy]

Although I closed my business at the end of the year, I've just had a telephone enquiry for an RICS valuation for selling a HTB. I couldn't take the job but asked why he was selling.........expanding family so he needed a bigger house.

i wonder if he gets a shock as and when he finally gets a buyer, and how long that might take 

[Errol]

16 hours ago, Bear Hug said:

It will be interesting to see how this works in practice in a rapidly falling market as "Homes England will not agree to release its charge over the property for sales at less than market value."

If the market was falling rapidly, then sales would be at market value - so Homes England would release the charge.

By definition, if the homes find any price on the market then there is a market and the price therefore can't be at 'less than market value'.

[AdamoMucci]

3 hours ago, Si1 said:

 

 

I have seen him before somewhere. Who is it?

[Bear Hug]

6 hours ago, Errol said:

If the market was falling rapidly, then sales would be at market value - so Homes England would release the charge.

By definition, if the homes find any price on the market then there is a market and the price therefore can't be at 'less than market value'.

Market value in this particular case appears to be defined as a maximum of a price determined by Valuer and the price it actually sells for.  

Therefore, if market falls between the valuation and actual offer/sale, it does seem to be possible that the sale price could end up below the market value as defined above, leaving the borrower to cover the difference.

I have no idea how this will work in practice, all depends on how generous the surveyors valuations are going to be, I suppose. 

[Neverwhere]

12 hours ago, Andy T said:

From Sancho's thread (new house price index has uk house prices falling)

New-builds in England and Wales are now 65% more expensive on average (£345,118) than they were in December 2006, compared to 38% more for old stock.

 

As we thought, the Help to buy scheme has done nothing but distorted new build prices by 30% and gifted the house builders/banks.

I thought this was also interesting, given builders are apparently trying to recycle existing Help to Buyers:

Quote

Overall only 102,645 new builds were sold in the year to June 2017. This represents just 12.6% of all sales and a third of the projected 300,000 which are needed each year. It comes despite a landmark year for building, with a celebrated 217,350 new units being completed in the 2016/17 financial year, the first time this Government target has been met since before the financial crisis.

(Source; thread)

[Si1]

17 hours ago, AdamoMucci said:

 

I have seen him before somewhere. Who is it?

I think it might be Keith Chegwin?

[suresh786]

On 3/8/2018 at 11:44 AM, Andy T said:

interesting, what would of been the difference between the traditional 'discounted' price, and the inflated HTB price then?

around 5-10% discount from HTB price, while HTB was outside london hence 20% HTB.

[AdamoMucci]

On 09/03/2018 at 8:31 AM, Si1 said:

I think it might be Keith Chegwin?

 

No Cheggers died recently. Is it this mythical Venger guy I keep hearing about?

 

Edit: Oh no, apparently the smile would rule that out from what I understand.

Edited March 11, 2018 by AdamoMucci

[Mancunian284]

On 08/03/2018 at 11:25 PM, Neverwhere said:

verall only 102,645 new builds were sold in the year to June 2017. This represents just 12.6% of all sales and a third of the projected 300,000 which are needed each year. It comes despite a landmark year for building, with a celebrated 217,350 new units being completed in the 2016/17 financial year, the first time this Government target has been met since before the financial crisis.

(Source; thread)

•  
• Quote

Am I missing something or does that mean around 115,000 (over half) of the new builds didn’t sell?

(Source; thread)

 

[Mancunian284]

On 08/03/2018 at 11:25 PM, Neverwhere said:

I thought this was also interesting, given builders are apparently trying to recycle existing Help to Buyers:

(Source; thread)

Apologies, my phone crashed before I could tidy up my post and still can’t edit them.  Am I reading that right as that seems like a lot of in sold new builds that we aren’t hearing much about.

[Neverwhere]

1 hour ago, Mancunian284 said:

Apologies, my phone crashed before I could tidy up my post and still can’t edit them.  Am I reading that right as that seems like a lot of in sold new builds that we aren’t hearing much about.

I was thinking similar when I posted it, but actually looking at it I don't think they're comparing like with like - it looks like the sold figure is for the calender year to June 2017; whereas the completed units figure is for the financial year 2016/17

Sorry, not as interesting as I first thought.

[guest_northshore]

FT - 'UK Treasury looks to sell £7.4bn Help to Buy loan book'
https://www.ft.com/content/7cd3a5e0-22ea-11e8-add1-0e8958b189ea

"The UK government is in talks with large investors to sell its £7.4bn Help to Buy loan book, ahead of receiving its first fees from borrowers in April..."

[kibuc]

3 hours ago, guest_northshore said:

FT - 'UK Treasury looks to sell £7.4bn Help to Buy loan book'
https://www.ft.com/content/7cd3a5e0-22ea-11e8-add1-0e8958b189ea

"The UK government is in talks with large investors to sell its £7.4bn Help to Buy loan book, ahead of receiving its first fees from borrowers in April..."

No. Fecking. Way.

I simply cannot see that happening, but if it ever does then oh deary me, it will be glorious

Edited March 13, 2018 by kibuc

[Option5]

12 minutes ago, kibuc said:

No. Fecking. Way.

I simply cannot see that happening, but it it ever does then oh deary me, it will be glorious

Which bit won't happen, selling the loan book or receiving it's first fees?

[Si1]

13 minutes ago, kibuc said:

No. Fecking. Way.

I simply cannot see that happening, but it it ever does then oh deary me, it will be glorious

That would be mortgage prisoner++

It's not really non recourse, you can only sell your HTB house at the HTB agent's discretion. That could be positively outstanding. I look forward to the sad faces.

[stuckinlimbo]

I guess all the pieces are starting to fit together with them selling off the HTB loan book. The government washes their hands clean as the SHTF.

[UnconventionalWisdom]

5 hours ago, kibuc said:

No. Fecking. Way.

I simply cannot see that happening, but if it ever does then oh deary me, it will be glorious

They sold off a block of the student loans-I can't see why they wouldn't do the same with htb 

[UnconventionalWisdom]

5 hours ago, Si1 said:

That would be mortgage prisoner++

It's not really non recourse, you can only sell your HTB house at the HTB agent's discretion. That could be positively outstanding. I look forward to the sad faces.

So as I understand it (maybe wrong), if house prices go down by the same amount as the loan when selling, the loan doesn't get repaid. If selling is at the HTB agent's discretion, couldn't they just say, "no, you can't sell as you are in negative equity and we want you to pay your loan off?" 

[longgone]

9 hours ago, guest_northshore said:

FT - 'UK Treasury looks to sell £7.4bn Help to Buy loan book'
https://www.ft.com/content/7cd3a5e0-22ea-11e8-add1-0e8958b189ea

"The UK government is in talks with large investors to sell its £7.4bn Help to Buy loan book, ahead of receiving its first fees from borrowers in April..."

no HTB extension then 

[Bear Hug]

2 hours ago, UnconventionalWisdom said:

They sold off a block of the student loans-I can't see why they wouldn't do the same with htb 

I guess they would always prefer to sell ASAP because they would get the money upfront (while they are in power) compared to probably a larger payment to their successors.

In this particular case, I expect the discount to be massive compared to outstanding loans.  Would it be enough to convince the general public that this was nothing other than a money printing exercise directly into the pockets of house builders?  Probably not. 

[Scramz]

10 hours ago, Si1 said:

That would be mortgage prisoner++

It's not really non recourse, you can only sell your HTB house at the HTB agent's discretion. That could be positively outstanding. I look forward to the sad faces.

You can sell you HTB house at any time, its not at the discretion of the HTB agents.

If it turns out to be true then this WILL be another PPI . 

[Scramz]

5 hours ago, UnconventionalWisdom said:

So as I understand it (maybe wrong), if house prices go down by the same amount as the loan when selling, the loan doesn't get repaid. If selling is at the HTB agent's discretion, couldn't they just say, "no, you can't sell as you are in negative equity and we want you to pay your loan off?" 

Its a variable loan tied to the market value of the property. If the market drops 20%, then your loan decreases by 20% and you can pay your loan off at that point which would be less than borrowed. However, to date and posted in a previous thread, the GOV have made millions£ from increasing property prices and people selling on their HTB homes.

[longgone]

38 minutes ago, Scramz said:

However, to date and posted in a previous thread, the GOV have made millions£ from increasing property prices and people selling on their HTB homes.

sounds rigged  hmm not sure.

[Si1]

1 hour ago, Scramz said:

You can sell you HTB house at any time, its not at the discretion of the HTB agents.

If it turns out to be true then this WILL be another PPI . 

I find the argument a bit grey:

 

from: https://www.helptobuyese.org.uk/docs/default-source/help-to-buy-equity-loans/help-to-buy-buyers-guide.pdf?sfvrsn=18

 

What happens if property values fall? Will I have to repay the full amount of Help to Buy assistance or just a percentage of the total sale proceeds? When you sell your home, (unless you have repaid the Help to Buy equity loan document previously) the Help to Buy equity loan document commits you to repay a percentage of the market value equal to the percentage contribution of assistance received. This means if the market value of your property falls below the level at which it was first purchased, you will repay less than the original amount Homes England contributed to the original purchase. You must always show that the proposed sale value is at the prevailing market value before going ahead. Homes England’s Mortgage Administrator must approve the sale before allowing the second charge to be released. As long as you have complied with all your obligations in the Help to Buy mortgage deed, you will not be required to provide for any shortfall in the equity loan repayment if you sell when values have fallen. If you do not comply with the terms of the Help to Buy mortgage deed, Homes England will seek to recover all the money they are owed. Your solicitor will explain the Help

[Scramz]

8 hours ago, Si1 said:

I find the argument a bit grey:

 

from: https://www.helptobuyese.org.uk/docs/default-source/help-to-buy-equity-loans/help-to-buy-buyers-guide.pdf?sfvrsn=18

 

What happens if property values fall? Will I have to repay the full amount of Help to Buy assistance or just a percentage of the total sale proceeds? When you sell your home, (unless you have repaid the Help to Buy equity loan document previously) the Help to Buy equity loan document commits you to repay a percentage of the market value equal to the percentage contribution of assistance received. This means if the market value of your property falls below the level at which it was first purchased, you will repay less than the original amount Homes England contributed to the original purchase. You must always show that the proposed sale value is at the prevailing market value before going ahead. Homes England’s Mortgage Administrator must approve the sale before allowing the second charge to be released. As long as you have complied with all your obligations in the Help to Buy mortgage deed, you will not be required to provide for any shortfall in the equity loan repayment if you sell when values have fallen. If you do not comply with the terms of the Help to Buy mortgage deed, Homes England will seek to recover all the money they are owed. Your solicitor will explain the Help

At the point of sale or repayment of loan, the property has to be valued by 3 RICS persons, I beleive. Not a representative of HTB. 

Tbh it seems grey, but it's not. I sat with a solicitor and went into detail in regards to HTB, he was in favour of, if people need to buy before a possible drop in house prices then HTB would be the way to go as the GOV will share the hit, allowing a 25% fall before effecting you when it comes to remortgaging, which is a good point.