Jump to content
House Price Crash Forum
Mrs Bear

Persimmon profits soar - thanks to Help to Buy

Recommended Posts

Big article in Times business section today - 'Help to Buy keeps profit rolling in for first-time specialist Persimmon.' 

13 % rise in profits, according to the article. 

I'm sure all the taxpayers among us will be delighted with that piece of news. 

 

 

Edited by Mrs Bear

Share this post


Link to post
Share on other sites
1 hour ago, maffo in oxford said:

My contact at my old place of work mentioned that Persimmon are now struggling to sell the remainder of the plots at the Heritage development. Perhaps the 2nd half of the year won't be so profitable?

Would this mean that a one more major prop to ever-HPI has finally failed ... one more *pop* under the fragile (glass?) floor that all those 'bricks-n-mortar' types will be staring incredulously through as it descends from the dizzy heights?

Sorry ... overdone metaphor. I just got excited at the idea that my children may actually have a future without endless propping up of several older generations ...

Edited by Aidan Ap Word
Clarity.

Share this post


Link to post
Share on other sites

This was reported on BBC R4 yesterday morning...the 'expert' invited in did refer to HTB but didn't made the obvious point you would expect about the profits being due to HTB.  He made the point that today we only have one third the number of small to medium size builders (of houses) and really only the big boys are left in the game.  This was the reason for the still low supply numbers he claimed and therefore we needed a 'help to build' rather than a 'help to buy' scheme.

Expect more press column inches about HTB in the years to come as this cynical scheme all unravels and falls off the rails into a ditch with many unexpected and nasty consequences....

Share this post


Link to post
Share on other sites
1 hour ago, Wayward said:

This was reported on BBC R4 yesterday morning...the 'expert' invited in did refer to HTB but didn't made the obvious point you would expect about the profits being due to HTB.  He made the point that today we only have one third the number of small to medium size builders (of houses) and really only the big boys are left in the game.  This was the reason for the still low supply numbers he claimed and therefore we needed a 'help to build' rather than a 'help to buy' scheme.

Expect more press column inches about HTB in the years to come as this cynical scheme all unravels and falls off the rails into a ditch with many unexpected and nasty consequences....

Build to Rent is the Tory boys' next HPI forever scheme.

125,000 kennels completed or planned thus far (Q2 2018).

https://www.bpf.org.uk/what-we-do/bpf-build-rent-map-uk

 

Share this post


Link to post
Share on other sites
5 hours ago, Aidan Ap Word said:

Would this mean that a one more major prop to ever-HPI has finally failed ... one more *pop* under the fragile (glass?) floor that all those 'bricks-n-mortar' types will be staring incredulously through as it descends from the dizzy heights?

Sorry ... overdone metaphor. I just got excited at the idea that my children may actually have a future without endless propping up of several older generations ...

 

I am sure they can reduce the prices and still do ok.... The housebuilders not the poor shafted owners.

Norfolk Average folks on 24,000£ per year (x2 48k).  The poshest postcodes have a household income 55/65

1 persons wages ( 24K) > wages with mortgage (108K-130k hp) > 2 persons wages with mortgage (216K-260k hp) > 2 persons wages with mortgage and mum and dad help* (216k-260k+10-50k = 350k) > BTL INVESTOR / 2 persons wages with mortgage and mum and dad help* + HTB (20k deposit = £400k and 20K deposit + mum and dad 10k = 450k) 

https://www.bovishomes.co.uk/information-on/help-to-buy-mortgage-calculator/

Using the calculator above a local norfolk dual income couple with help from mum and dad can make the leap to 350k (still a lot of money 7.2x joint salaries) to over 400K (8x+).  

In that scenario the couple with their combined 4k a month should be ok with their circa 1200£ a month 30 year mortgage (until rates rise of course).

but in that sixth year they will have a bill for = 1.75% of that 82k loan = 1,435 (which added to the mortgage is £1319 pm)

Then its 1.75 + 1%+RPI .  So for example its about 3.2% (+4.2 added) at the moment so in year seven you would be paying 1.82% or £1492py

So assuming no higher inflation (which never happens)

y8 = 1.9% = 1558

y9 = 1.979% = 1622.78

y10 = 2.06% = 1689.2

y11 = 2.15% = 1763

y12 = 2.24% = 1836.8

y13 = 2.33% = 1910.6

y14 = 2.43% = 1992.6

y15 = 2.53% = 2074.6

So if everything stayed the same as right now you HTB loan would  by half way through your mortgage approach two month mortgage payments equivalent.

If Carney "looks though" inflation you HTB loan becomes a toxic loan say we get 5% RPI + 1% and its gets nasty quite quickly.  You will be thinking my god I wish i could borrow that 82k on the same terms as the mortgage!....but you cannot get a mortgage for that much

The real power of HTB is boosting prices in cheaper areas which I presume makes it even more wonderful for the industry that lobbied it into existence.

It is a truly awful scheme and will either be bailed out or HTB on used houses will be re introduced so that new HTB owners can sell to someone. 

I wonder how many owners have not budgeted for the 6th year onwards payments?

Edited by Fromage Frais

Share this post


Link to post
Share on other sites
17 hours ago, zugzwang said:

Build to Rent is the Tory boys' next HPI forever scheme.

125,000 kennels completed or planned thus far (Q2 2018).

https://www.bpf.org.uk/what-we-do/bpf-build-rent-map-uk

 

I don't have a problem with institutions such as L&G investing big in BTR..why do you think this flood of supply will cause inflation?  It will put downwards pressure on prices and rents (everything else being equal) and the nation will be better housed (EEBE).  Do you think it would be better if these 125,000 units were not built or planned...can't see why??

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 152 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%



×
×
  • Create New...

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.