Help to Buy Negative Equity

[Shrink Proof]

More Grenfell fallout.

[Bruce Banner]

 

Quote

Homes England has now determined that you may proceed with the redemption of your help-to-buy equity loan based on the valuation provided … ie at a market value of £50,000,” it said in a letter.

This means Langevin has to pay back 20% of the new valuation of £50,000, which is £10,000, leaving the government with a £85,000 shortfall on its original loan.

Homes England declined to comment on Langevin’s case but said: “Every case received by the Homes England mortgage administration team is considered on its own merits and will take in to account the local circumstances of each building. We will allow redemption of a loan if it is within the rules of the scheme.

 

Another bloody bailout.

[Flopsy]

and the other buyers of flats in the same block?

They can't bring a valuation to their mortgage company and ask to pay less each month.

[cashinmattress]

Fook me.

If I read that right her £95k was for the 20% down payment?

Half million for a 2-bedder?

What a country of mugs the UK is.

And I suspect in time there will be 100's if not 1000's of properties which will have to be written down due to inferior materials and shoddy developers. Councils can't keep up with the corruption, and they dare not bite the hand that feeds them.

Sadly it requires real tragedies to get any progress.

[ubuntu]

Discussed here

http://www.housepricecrash.co.uk/forum/index.php?/topic/232633-value-of-london-flat-plummets-from-£475k-to-£50k/&page=3

[happyguy]

1 hour ago, Bruce Banner said:

Another bloody bailout.

This is not a so-called bailout.  The agreement is that she has to pay back 20% of the value of the property.  The value of the property has fallen so her liability has fallen. She got lucky.  In life some people get lucky others do not .

 

1 hour ago, cashinmattress said:

If I read that right her £95k was for the 20% down payment?

Half million for a 2-bedder?

What a country of mugs the UK is.

And I suspect in time there will be 100's if not 1000's of properties which will have to be written down due to inferior materials and shoddy developers. Councils can't keep up with the corruption, and they dare not bite the hand that feeds them.

Sadly it requires real tragedies to get any progress.

It is called supply and demand.  There will not be 1000's pf properties written down due to inferior materials, there will be a few like this where UNSAFE material is found but most of those will be social housing tower blocks.  Very few private blocks have this cladding they have all been checked.  

 

11 minutes ago, fru-gal said:

******ing hell, didn't the Government think of this when they drew up HTB. Still it's only taxpayers money they are flushing down the drain so nothing for them to worry about...

So will you complain about the majority of properties whose value has increased therefore bringing in additional income to the govt finances when the 20% is repaid? 

[happyguy]

Just now, happyguy said:

Councils can't keep up with the corruption

what evidence and proof do you have of corruption? 

[Bruce Banner]

1 hour ago, happyguy said:

This is not a so-called bailout.  The agreement is that she has to pay back 20% of the value of the property.  The value of the property has fallen so her liability has fallen. She got lucky.  In life some people get lucky others do not .

You might not think it a "so-called" bailout but it looks like a bailout and quacks like a bailout.

More taxpayers money down the drain. 

Anyway, why are your posts so negative? You should be happy, prices are on the way down. 

[Trump Invective]

Who the hell says its worth 50k? Genuine question.

[opt_out]

Who is valuing the flat at £50k?    It's not realistic that a block of £500k flats are now only worth £50k each for want of £40k ? remedial works.

[cashinmattress]

1 hour ago, happyguy said:

what evidence and proof do you have of corruption? 

councils  pawn that off to big builders... giving them a lot of leeway... via 106 and other rules

and councils generally lack the capability to assess big projects...even small ones in fact

so yeah.. basically,

corruption... or rock and a hard place...probably both

call it what you will

evidence is in the Grenfell disaster and such

they need infrastructure... are essentially bound to the terms of the mega builders, and so much is going on with so much complexity that lots of little 'problems' are 'missed'

[cashinmattress]

2 hours ago, happyguy said:

It is called supply and demand.  There will not be 1000's pf properties written down due to inferior materials, there will be a few like this where UNSAFE material is found but most of those will be social housing tower blocks.  Very few private blocks have this cladding they have all been checked.  

 

Not just cladding mate. I'm talking about all kinds of inferior materials. I have civil engineery type friends in the business and they laugh at what passes on...plus they avoid new builds

[ingermany]

Err. Yes I think there is corruption here. 

Something worth 50k was "bought" from a developer for 500k with government funding 95k to cover "the deposit"....Taxpayers money which was given to the developer. Money that has now vanished. Into the developer's bonuses. That is an obvious scam. Surely the Treasury is not that stupid? 

All government subsidies are vulnerable to this sort of gaming. The cash just vanishes. The declared prices and values can be set at any random sum because there is no free market. Government is the guaranteed market maker. It is a clear scam and a fraud. 

[chronyx]

5 hours ago, cashinmattress said:

Not just cladding mate. I'm talking about all kinds of inferior materials. I have civil engineery type friends in the business and they laugh at what passes on...plus they avoid new builds

Can you go into more detail without specifics that would cause trouble? It's good to know what to look out for and working in construction it's good to know what the latest scams are

[smash]

7 hours ago, happyguy said:

So will you complain about the majority of properties whose value has increased therefore bringing in additional income to the govt finances when the 20% is repaid? 

As I understand HTB this is correct. However my objection is that essentially this just makes the Gov. speculators with taxpayers money. Was any of this in published plans/proposals or a manifesto? Many/most on this forum would object to contributing to what seems like being a forced speculator just by the virtue of being a taxpayer.

[tm_81]

but if the new valuation "sticks" wouldn't it still be in negative equity from the other 80%? thats a 300k+ debt still on a property "valued" at 50k.

Not sure how the bank will like that  at all once its time to remortgage (or even before that)

If the bank still thinks the flat is worth the bigger price, then I think we are looking at taxpayer fraud (one price for the taxpayer, another for the private lender...)

 

[Parkwell]

18 hours ago, happyguy said:

This is not a so-called bailout.  The agreement is that she has to pay back 20% of the value of the property.  The value of the property has fallen so her liability has fallen. She got lucky.  In life some people get lucky others do not .

Yeah. More government policy should be based on luck. People on job seekers should be forced to come to the office once a month and spin the wheel of fortune to determine how much benefits they get.

[Errol]

18 hours ago, fru-gal said:

******ing hell, didn't the Government think of this when they drew up HTB. Still it's only taxpayers money they are flushing down the drain so nothing for them to worry about...

We all did on HpC. It was widely discussed here at the time HTB first appeared that it would inevitably lead to bailouts and essentially more money printing.

[ccc]

18 hours ago, happyguy said:

It is called supply and demand.  There will not be 1000's pf properties written down due to inferior materials, there will be a few like this where UNSAFE material is found but most of those will be social housing tower blocks.  Very few private blocks have this cladding they have all been checked.  

You have not been into many new builds - have you ?

You are correct on one point though. We wont be talking thousands here. Quite possibly millions. The 'Quality' of UK new builds of recent years is atrocious. Its actually an insult to the word 'quality' to even use it in reference to most of these places.

[Assume The Opposite]

HTB worked as intended. The economy flatlined in 2010-2012 and it created a mini boom, enough to get through the 2015 election. Banks got lending again, developers could sell overpriced houses as the govt would backstop 20%, and Osbooon/Camoron got voters cheering. Win win.  

[tm_81]

45 minutes ago, Parkwell said:

She got lucky.

It remains to be seen if its "lucky". When it comes to remortgage, even the 125% "for existing customers in negative equity" type loans won't cover her. Taxpayer lost 85k but she lost over 200k on the LTV calculation.

Normally it would go to SVR (e.g. extortionate rates) on an already huge loan.

Unless of course there is another bailout involved. It will be interesting to see if there is any more "help" involved in this case..

[Si1]

4 hours ago, TonyJ said:

The developer got lucky. Because it received all that money for its shoddy flats.

This raises a serious scam.

If you'd bought a htb new build house, at any point in the future that the market value of the house goes below the original sale price, you can offer to buy out your HTB loan from the govt at a serious discount.

Since markets always have ups and downs then this seems quite likely.

Realistic?

[durhamborn]

HTB,Persimmon boss gets £75 million pay.Thats all you need to know about where the money goes.Just drove past some young lads having their bait on the grass outside a factory black as the roads.They will be on about £18k.Their tax is going direct to the Persimmon boss.Thats all HTB is,a direct transfer from workers/taxpayers to chief execs of housing companies.The most vile part of it isnt even the theft from taxpayers,its the fact it traps young people who just want a home and to get on with life in a terrible house,and negative equity for 20 years,(they just dont know it yet).

[UnconventionalWisdom]

1 hour ago, durhamborn said:

HTB,Persimmon boss gets £75 million pay.Thats all you need to know about where the money goes.Just drove past some young lads having their bait on the grass outside a factory black as the roads.They will be on about £18k.Their tax is going direct to the Persimmon boss.Thats all HTB is,a direct transfer from workers/taxpayers to chief execs of housing companies.The most vile part of it isnt even the theft from taxpayers,its the fact it traps young people who just want a home and to get on with life in a terrible house,and negative equity for 20 years,(they just dont know it yet).

It's crazy, my brother is early 20s and a lorry driver so good money. Has bought an over priced 2 bedroom house with htb. When I heard, I tried to convince him how it was a stupid idea(especially as he spends most of his time driving in Europe), response I got was, "I've made up my mind and the government has good schemes to help first time buyers like me". I'm ten years older than him so he seemed to forget that I'm also someone who's ever owned a house and have had a proper look at the options. So many people go along thinking the government couldn't possibly do something that wont be to their benefit. 

Edited April 26, 2018 by UnconventionalWisdom

[Giraffe]

This must be a scam??  The Government accepts a valuation of 50k?? WTF ! Who did she have to pay to get that valuation? So the cladding on each flat surface is worth 450k??