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Flopsy

Help to buy schemes - Radio 4

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Moneybox Live last week

Listen again available on Radio 4  https://www.bbc.co.uk/radio/play/m0000ngh

Starts with a person aged 30, Iona from the Young Money Blog. People in their 20's say that no being able to buy their own home is their number 1 problem. Security and stability. 

Paula Higgins - "Homeowners Alliance" talks about the HTB ISA. First caller didn't know that they would not get the Govt contribution until completion.

Garath Shaw from "Which", was also there and confirmed. Radio 4 person says research shown that property sales are being delayed because of this.

3 Moneybox listeners complained about the same problem with HTB ISA's. Some solicitors will not process the paperwork to claim the Govt bonus as they don't feel the £50 fee is worth it. They also don't know how to process the paperwork.

Another HTB ISA owner didn't know she had to close her account 2 days before completion. There was no info when she opened the ISA and the bank didn't tell her when she closed it.

HTB ISA being closed down in 2019.

Talk about HTB ISA vs LISA. 

HTB Equity Loan - risks and returns. Would the panel agree "financially sophisticated"?  Yes. New build only. Similar schemes in Wales and Ireland.

Caller says "daughter borrowed money they don't know how much they owe as it is based at the value of the house in the future , at the end of the mortgage (25 years) if they cannot pay it back there will be a huge hole, actually then crucified them, as a family we need to save as much as we can to pay off"

Garath - If you bought a house for 250,000 and your house increased in price, you will be paying off more than 20% of 250,000. When you take out an equity loan it's a fixed  percentage. 

Also explained how the 20% interest is charged. "for the first 5 years no interest, pay management fee of 1£ per month, then after 5 years you pay 1.75% and then the interest rate increases every year  by RPI plus 1% until the 25 years are up. So at the end of the loan 25 years your interest rate has increased from 1.75% to 5.29 % and if you compare this to mortgage rates this is the sub-prime, the people with credit problems are paying this.

Who is this suitable for - Paula?, for someone who has a plan to pay it off with in the 5 years or think prices will go up. Who knows that they are going to be there for a while.  Not suitable for people who have no plan to pay off within the 5 years

 

Edited by Flopsy

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One of my coworkers had a HTB ISA, said it was a huge hassle and very stressful to get the money released in time to complete despite him chasing the solicitor well ahead of time.

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HTB is taking a battering at the moment:

 

Help to Buy purchasers moving back into rented once interest free period of loan ends

https://www.propertyindustryeye.com/help-to-buy-purchasers-moving-back-into-rented-once-interest-free-period-of-loan-ends/

First-time buyers who used Help to Buy to get on the housing ladder are faced with such large debts when the interest-free period of the loan ends that they are moving back into rented accommodation.

The claim was made in a round table – or property hub – of conveyancers, agents and brokers in Southampton.

Attendees heard that the typical pay-back for a first-time buyer in the area is around £80,000 when the five years are up.

Two property hubs were put on last week by TM Group, in Southampton and Northampton.

Help to Buy proved a thorny issue at both, with suggestions that the scheme has inflated new-build prices to the maximum amounts that the Government will lend.

The scheme was also said to have “paralysed” the resale market, and to be central to what is seen as the Government’s “obsession with new housing”.

Conveyancers also expressed exasperation that people who had purchased leasehold houses often portray themselves as victims, when the lawyers said they had strongly advised them against buying such properties.

However, the view was that people are so obsessed with becoming home owners that they went ahead anyway.

 

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34 minutes ago, rantnrave said:

HTB is taking a battering at the moment:

 

Help to Buy purchasers moving back into rented once interest free period of loan ends

https://www.propertyindustryeye.com/help-to-buy-purchasers-moving-back-into-rented-once-interest-free-period-of-loan-ends/

First-time buyers who used Help to Buy to get on the housing ladder are faced with such large debts when the interest-free period of the loan ends that they are moving back into rented accommodation.

The claim was made in a round table – or property hub – of conveyancers, agents and brokers in Southampton.

Attendees heard that the typical pay-back for a first-time buyer in the area is around £80,000 when the five years are up.

Two property hubs were put on last week by TM Group, in Southampton and Northampton.

Help to Buy proved a thorny issue at both, with suggestions that the scheme has inflated new-build prices to the maximum amounts that the Government will lend.

The scheme was also said to have “paralysed” the resale market, and to be central to what is seen as the Government’s “obsession with new housing”.

Conveyancers also expressed exasperation that people who had purchased leasehold houses often portray themselves as victims, when the lawyers said they had strongly advised them against buying such properties.

However, the view was that people are so obsessed with becoming home owners that they went ahead anyway.

 

The #####s. And how much did that cost them in fees?

Help to buy was the Tories' equivalent moment to Gordo selling off the nation's gold reserves. Reputation for economic competence. Gone.

 

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22 minutes ago, Si1 said:

 

Help to buy was the Tories' equivalent moment to Gordo selling off the nation's gold reserves. Reputation for economic competence. Gone.

 

Some might say that Gordon Brown did a very competent job. But for whom?

https://www.silverdoctors.com/gold/gold-news/gordon-brown-dumped-britains-gold-to-save-goldman-sachs-jp-morgan/

 

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I know this about the complete mess that Help To Buy is however as Gordon Browns gold fiasco has been mentioned, I really never understood why he announced he was selling so much gold rather than slowly and quietly releasing it onto the market.  I was not a fan of New Labour as they were far too right wing for my taste but the act of selling a valuable asset in that way was supremely stupid even by their standards.

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20 hours ago, Flopsy said:

"Homeowners Alliance" talks about the HTB ISA. First caller didn't know that they would not get the Govt contribution until completion.

 

20 hours ago, Flopsy said:

Another HTB ISA owner didn't know she had to close her account 2 days before completion. There was no info when she opened the ISA and the bank didn't tell her when she closed it.

 

20 hours ago, Flopsy said:

If you bought a house for 250,000 and your house increased in price, you will be paying off more than 20% of 250,000. When you take out an equity loan it's a fixed  percentage. 

Always remember these inventions of the government are made in such a way so as to be as unusable as possible, hence all the strange rules and fine print. If the government wanted more people in OO there would be.

 

This is by design

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HTB is a grotesque distortion of the market and goodness knows what the repercussions will be...this is only the beginning.  Expect HTB to be in the news a lot more over the coming years as this unravels. 

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Got to say that I used the Lifetime ISA recently through skipton. Found it all very easy and just needed a bit of foresight and planning to make sure it happened on time for our purchase. People whinging about it must have sub par IQs.

Help to buy isa has not been allowed to be used as deposit since day 1. If people read the rules and paid attention then they'd know this. Of course this is something we are well aware of given the situation with landlords and s24. Roll on January!

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  • 261 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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