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sam1994

Sadly, I see no other option

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Speaking to friends my age (24; soon 25), some seem to have bitten the fruit of HTB.

They seem overwhelmingly leveraged, and have hedged on the idea that IRs will not rise for a long time.

I know that the HPI toolbox is not exhausted; but it was mentioned here with a graph before that BoE tracks Fed base rate aggressively. Seems Fed is backing off however, so we may have a bit more time before it hits the fan. 

If we raise rates, we will stimulate growth. It certainly seems unfeasible that we can keep these record low rates for much longer. 

When my friend bought a £500k 1-bed flat (not in London), I worry that not only will this all collapse, there is no other option but a bail out.

Is HTB going to be the next PPI? 

 

--

S

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Raising rates stimulates growth? That's a new one. The 'emergency' rates are the equivalent of morphine, which is becoming more and more ineffective as the patient builds resistance, once you take it away that wafer-thin growth ends up disappearing unless they find another set of statistics to explain it.

There are always options - you can rent, buy in a less expensive area, or buy a flat which isn't eligible for HTB. £500k for a 1-bed suggests. If that flat ain't in London they still would have to pony up 80% so must be on a decent wedge or have rich backing.

Know someone on HTB and I gather that the equity loan from the government is seen as a bit of a BOMAD loan, ie it doesn't count towards any thinking in leverage. 

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9 hours ago, sam1994 said:

Speaking to friends my age (24; soon 25), some seem to have bitten the fruit of HTB.

They seem overwhelmingly leveraged, and have hedged on the idea that IRs will not rise for a long time.

I know that the HPI toolbox is not exhausted; but it was mentioned here with a graph before that BoE tracks Fed base rate aggressively. Seems Fed is backing off however, so we may have a bit more time before it hits the fan. 

If we raise rates, we will stimulate growth. It certainly seems unfeasible that we can keep these record low rates for much longer. 

When my friend bought a £500k 1-bed flat (not in London), I worry that not only will this all collapse, there is no other option but a bail out.

Is HTB going to be the next PPI? 

 

--

S

HA HA 

that`s all i`m saying  

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10 hours ago, sam1994 said:

Speaking to friends my age (24; soon 25), some seem to have bitten the fruit of HTB.

They seem overwhelmingly leveraged, and have hedged on the idea that IRs will not rise for a long time.

I know that the HPI toolbox is not exhausted; but it was mentioned here with a graph before that BoE tracks Fed base rate aggressively. Seems Fed is backing off however, so we may have a bit more time before it hits the fan. 

If we raise rates, we will stimulate growth. It certainly seems unfeasible that we can keep these record low rates for much longer. 

When my friend bought a £500k 1-bed flat (not in London), I worry that not only will this all collapse, there is no other option but a bail out.

Is HTB going to be the next PPI? 

 

For someone so young you have acquired an astonishing level of cynicism realism. Yes, they will do everything but let house prices go down. They would rather destroy the entire economy than let property crash. I ended up giving up and moving to Canada in 2011 so I could own my own home having sat on the sidelines since 2002. In Canada the same situation started to occur there except provincial governments have tried to actually stamp on the market. I have now moved back for family reasons and its like freeking Groundhog day. I am probably going to need the bank of Mum and Dad to get a reasonable home here...oh yes, and I'm fifty FFS.

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10 hours ago, sam1994 said:

Speaking to friends my age (24; soon 25), some seem to have bitten the fruit of HTB.

They seem overwhelmingly leveraged, and have hedged on the idea that IRs will not rise for a long time.

I know that the HPI toolbox is not exhausted; but it was mentioned here with a graph before that BoE tracks Fed base rate aggressively. Seems Fed is backing off however, so we may have a bit more time before it hits the fan. 

If we raise rates, we will stimulate growth. It certainly seems unfeasible that we can keep these record low rates for much longer. 

When my friend bought a £500k 1-bed flat (not in London), I worry that not only will this all collapse, there is no other option but a bail out.

Is HTB going to be the next PPI? 

 

--

S

Fed is pausing. Then will raise a bit more.

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I'm seeing signs of them claiming that they didn't know what they were getting into (HTB) close to me in Buckinghamshire.

Joined the Facebook groups in areas I'd like to buy in. Initially to find out what problems were experienced there as people complain about anything related such as parking, commuting, local schools, doctors, crime etc.

It's been a good way to learn where not to live.

In the last year I've seen 2 threads now on HTB where local buyers complained about the system and only just seems to be understanding the full implications. This is probably because the 5 year stage have come up for the first lot of buyers in the new developments.

These Facebook posters are claiming in some cases that they didn't understand the HTB agreement, that the information online doesn't make it clear, and most importantly maybe ; that they were told to use the developers lawyer who didn't explain HTB to them at all.

My guess is that this is going to form the action I can see happening at some stage in the future when they will expect a bail out.

What does surprise me and this is just an observation is that up to now some have been able to resell their HTB homes and achieved very good asking prices (compared to when they bought them).

This offloads the problem of inflated house prices onto a new buyer who doesn't have HTB to blame directly.

Nothing newish is selling in the developments I have been following now and sellers are blaming newer developments and FTBers being able to use HTB there instead and get a brand new home instead of their overpriced second hand one...

Edited by Flopsy

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Flat? Surely a bridge would be more suitable?

Id love to see the RM listing for a 500k flat not in London.

Even with htb, the person would need a mortgage of 360k, requiring an income of ~100k 'not in London'

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18 minutes ago, Captain Kirk said:

It could be the next subprime. I don't think people can claim they didn't know what they were getting into.

Htb is tiny in tge scheme of things.

Its a crpa scheme, gidiot should be shot for it. But it wont bring down the banks.

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3 hours ago, HovelinHove said:

For someone so young you have acquired an astonishing level of cynicism realism. Yes, they will do everything but let house prices go down. They would rather destroy the entire economy than let property crash. I ended up giving up and moving to Canada in 2011 so I could own my own home having sat on the sidelines since 2002. In Canada the same situation started to occur there except provincial governments have tried to actually stamp on the market. I have now moved back for family reasons and its like freeking Groundhog day. I am probably going to need the bank of Mum and Dad to get a reasonable home here...oh yes, and I'm fifty FFS.

The Japanese tried to 'not allow' a crash 30 years ago, via vehicles such as 50-year intergenerational mortgages. It delayed the bursting of the bubble, but of course made it worse when it did go.

I foresee the same thing here - mortgage repayment periods are creeping up to try to keep the whole creaking edifice going - I would imagine it won't be long before we see the 50 year mortgage introduced in the UK. Same blinkered stupidity. But people can only afford what they can afford, particularly in a nation increasingly of precarious, low-skill, low-pay employment.

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13 hours ago, sam1994 said:

Speaking to friends my age (24; soon 25), some seem to have bitten the fruit of HTB.

They seem overwhelmingly leveraged, and have hedged on the idea that IRs will not rise for a long time.

I know that the HPI toolbox is not exhausted; but it was mentioned here with a graph before that BoE tracks Fed base rate aggressively. Seems Fed is backing off however, so we may have a bit more time before it hits the fan. 

If we raise rates, we will stimulate growth. It certainly seems unfeasible that we can keep these record low rates for much longer. 

When my friend bought a £500k 1-bed flat (not in London), I worry that not only will this all collapse, there is no other option but a bail out.

Is HTB going to be the next PPI? 

 

--

S

WOW!!! that's insane!

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Interest rates aren't going anywhere FED or no FED. The BOE don't have the stomach to raise rates unless absolutely forced to (major incident maybe) and only then it'll be at a trickle.  Maybe a big event could shift them, but what's a big event these days?? Brexit? who knows?!

Hpi is slowing because it has to - the country is skint and scared. The overall trend is heading down and the EAs and more and more home owners by the day know it. Asking prices around me are falling across a range of housing, mostly the bigger stuff as people realise "it ain't shifting!". Still silly prices, but visible price reductions are being instructed resulting in some (but not enough) decent homes now valued below smaller sized less appealing new builds.

I'll stick my neck out, but if things are allowed to progress as they are, which is no bad thing - slowly slowly catchy monkey - a slow steady decline in hpi (at a time whilst Mr Carney and Gov are appearing to be relatively quiet in their actions on the matter of falling house prices - i.e. not raising rates as I would like them to being a saver) it is my impression the market will continue to correct, albeit slowly (too slow for some of us) but at a rate the Gov and BOE are happy with as it does not point the finger directly at them as the cause of hpi falls. This suits them just nicely as the blame will point elsewhere having taken no direct action to lower hpi themselves. Patience is a virtue and no matter how bad we think Government can be, they can on occasion be smart or lucky, and often act simply by not reacting.

Brexit is a fortunate distraction from introducing new legislation and props to support hpi. I also firmly believe the electorate has begun to turn and are more accepting lower house prices might be a good thing, which the Gov will happily run with. The Gov and BOE are fully aware hpi must end, and with public sentiment turning, which is what they've been waiting for, it is now just a matter of time (as I said, too slow for some of us) as asking prices decline and the new reality sets in of a younger generation gradually gaining a foothold in important roles in our society and their view (sometimes our HPC view) of wanting a reduction in house prices becoming their driven agenda and becoming a reality.  It really is a waiting game, that's all.

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I actually think the seeds of populism have been sown with Brexit.

Put it this way, even many homeowners know and say that house prices are ridiculous and would welcome them, although this is usually followed by a comment that it is for the sake of their children.

If it could be put to a vote I am very certain that over 52% of the population would actually want the things that caused the bubble to be outlawed.

A managed decline in house prices could even be spun by the government as following 'the will of the people' spiel.

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14 hours ago, sam1994 said:

Speaking to friends my age (24; soon 25), some seem to have bitten the fruit of HTB.

They seem overwhelmingly leveraged, and have hedged on the idea that IRs will not rise for a long time.

I know that the HPI toolbox is not exhausted; but it was mentioned here with a graph before that BoE tracks Fed base rate aggressively. Seems Fed is backing off however, so we may have a bit more time before it hits the fan. 

If we raise rates, we will stimulate growth. It certainly seems unfeasible that we can keep these record low rates for much longer. 

When my friend bought a £500k 1-bed flat (not in London), I worry that not only will this all collapse, there is no other option but a bail out.

Is HTB going to be the next PPI? 

 

--

S

Can I ask which area did your friend buy in?

Outside of London, HTB is 20% so £100k. He would've needed a mortgage of £375k (assuming he put up £25k deposit) - even with todays ultra low interest rates, his mortgage would be about £1400 per month.

How is the rental market in that area?

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14 minutes ago, simon2 said:

I actually think the seeds of populism have been sown with Brexit.

Put it this way, even many homeowners know and say that house prices are ridiculous and would welcome them, although this is usually followed by a comment that it is for the sake of their children.

If it could be put to a vote I am very certain that over 52% of the population would actually want the things that caused the bubble to be outlawed.

A managed decline in house prices could even be spun by the government as following 'the will of the people' spiel.

If 52% of the populus voted for the things that caused the bubble to be outlawed, they’d be called uneducated racists daily by the establishment media, told they didn’t understand what they were voting for (unlike the 48%) and there would be a national propaganda campaign on the disgusting beeb for a revote 

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4 hours ago, spyguy said:

Flat? Surely a bridge would be more suitable?

Id love to see the RM listing for a 500k flat not in London.

Even with htb, the person would need a mortgage of 360k, requiring an income of ~100k 'not in London'

Perhaps slightly hyperbolic. I think it was in the region of 460-480k (Offers in Excess Of).

I know his parents downsized and gave him a lot of cash to help him. He doesn't like to get in to much detail and will shut down the subject quite quickly. It's not something I really want to push.

S

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6 hours ago, HovelinHove said:

 I have now moved back for family reasons and its like freeking Groundhog day. I am probably going to need the bank of Mum and Dad to get a reasonable home here...oh yes, and I'm fifty FFS.

Me too,  I started my uk property adventure too with a Dad loan, he lent me £1k to go with the £1.5k I had saved for my 1/2 of the deposit on a £55k 2 bed semi. Now I have over 50% equity in a house I purchased in 2016 for £501k. 

You had the choice to of being born at the right time to enter the property market anywhere around the mid 90's, when it was obvious things where too cheap as renting cost more than buying. 

Tut tut.

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2 hours ago, MinistryMan said:

Interest rates aren't going anywhere FED or no FED. The BOE don't have the stomach to raise rates unless absolutely forced to (major incident maybe) and only then it'll be at a trickle.  Maybe a big event could shift them, but what's a big event these days?? Brexit? who knows?!

 

Don't say that, I swapped my tracker for a slightly higher rate 5 year fix just before the last IR rise, That put me in the black as far a IR and monthly payments are concerned but any drop will be costing me money. 

Still as i'm up if IR stay where they are for another 4 years I will no complain, but I am expecting another few % rises over the next 4 years.

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1 hour ago, thewig said:

If 52% of the populus voted for the things that caused the bubble to be outlawed, they’d be called uneducated racists daily by the establishment media, told they didn’t understand what they were voting for (unlike the 48%) and there would be a national propaganda campaign on the disgusting beeb for a revote 

Hexit?

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6 hours ago, spyguy said:

Flat? Surely a bridge would be more suitable?

Id love to see the RM listing for a 500k flat not in London.

Even with htb, the person would need a mortgage of 360k, requiring an income of ~100k 'not in London'

Is that strictly true? Couldn't he have bought it with a deposit of 400k, 80k mortgage and 20k government help, or 450k, 40k and 10k? Are you only allowed to use help to buy if you borrow the maximum allowed?

 

There's not many asking for more than 500k. I wonder if "not in London" means "not in Inner London"

https://www.rightmove.co.uk/property-for-sale/property-77999003.html

https://www.rightmove.co.uk/property-for-sale/property-57395457.html

https://www.rightmove.co.uk/property-for-sale/property-67791163.html

https://www.rightmove.co.uk/property-for-sale/property-68170096.html

 

 

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  • 293 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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