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Freki

Persimmons could lose access to HTB loan scheme

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Britain’s housebuilders are bucking the trend this morning, as they slide to the bottom of the FTSE 100 leaderboard.

Persimmon has slumped by almost 7%, after it emerged the company could lose its right to sell houses under the Help to Buy scheme.

Government insiders say housing secretary James Brokenshire is “increasingly concerned” by Persimmon’s behaviour - from complaints over quality of its homes to the row over the huge bonuses paid to CEO Jeff Fairburn.

Persimmon has boosted its profits thanks to the Help to Buy scheme (which helps new customers onto the property ladder). So if Brokenshire decides to red-card Persimmon, it could have a major impact on its bottom line.

The prospect of a government clampdown has hurt rival housebuilders; Taylor Wimpey are down 3%, with Barratt down 2.5%.

At last the gvt is looking into this. Bandits and robbers, I hope there will be ground for class action for their houses not being fit for purpose.

Edited by Freki

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2 minutes ago, Freki said:

At last the gvt is looking into this. Bandits and robbers, I hope there will be ground for class action for their houses not being fit for purpose.

Trebles and debt forgiveness all round for the mortgagors?

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I do sometimes wonder if builders don’t just build shite new builds poorly for profit, but if it’s actually a gov led instruction. Or just a happy coincidence.

imagine all the stimulus the economy is going to get in 3 years times when all these new builds start falling to bits? 

perfect way to make mugs pay twice for something worth of fraction of what they paid. 

I don’t have much sympathy for those buying leaseholds, they still bought at crazy high prices, they set new highs, sod them. 

Shouldnt of bought or at least asked for massive discounts etc. 

seems no matter how much debt you offer the plebs will always drink it down, the lenders themselves have to limit the money as the brits are such debt heads. 

a bit depressing really. 

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https://www.bbc.co.uk/news/business-47356378

Reported in BBC..

Leasehold houses with rents that step up are a scam...there is another thread on that issue I think.  There is no good reason why a house (as opposed to a flat)  should be leasehold, it should be freehold...it is a scam exploiting naïve usually FTBs desperate to buy.  With HTB it is a scam on top of a scam.

 

I think the point to take from attached article is..

Analysts at Liberum said they would be very surprised if Persimmon was excluded from the next phase of the Help to Buy scheme. They noted that Persimmon is the biggest user of the scheme, and many of the issues are said to have been resolved.

Nothing will be done.

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1 hour ago, Wayward said:

[...]

I think the point to take from attached article is..

Analysts at Liberum said they would be very surprised if Persimmon was excluded from the next phase of the Help to Buy scheme. They noted that Persimmon is the biggest user of the scheme, and many of the issues are said to have been resolved.

Nothing will be done.

*sigh*, true.

Well, if anything is done it will be someone getting bailed out.

Probably the company that can afford the big brown envelopes (for the record: I am not saying they use them, though). Though I don't think they need a bailout (not right now, anyway).

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2 hours ago, Wayward said:

Nothing will be done.

Especially after a rather healthy donation to the Tory party, I suspect. It's one of the reasons HTB was initiated in the first place. 

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I often think when looking at these newbuild hellhole estates from afar that they’ve been built to be easily bulldozed in a few years time

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Persimmon are a potential PPI scandal in the making.

At one site in North London (Harrow View West), they've applied for permission to build an additional 200 houses (on top of the 300 odd they had permission to build). Harrow Council seems to be in their pockets as it looks like they will be granted permission. The currents residents already complain about crap houses but are likely to be shafted even more!

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I wonder if anyone has ever asked to see the results of the testing against building regulations when they move into their new build?

I've never done it - do you get presented with a pack that contains all the necessary test results when you buy new?

I'd certainly want to know that all the requisite standards have been achieved, particularly if my opinion of my new house was that it's 'crap'.

 

 

 

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30 minutes ago, zilly said:

I wonder if anyone has ever asked to see the results of the testing against building regulations when they move into their new build?

I've never done it - do you get presented with a pack that contains all the necessary test results when you buy new?

I'd certainly want to know that all the requisite standards have been achieved, particularly if my opinion of my new house was that it's 'crap'.

 

 

 

YOu do get a pack full of various tests carried out, their results etc. I suppose if one isn't aware of the building regulations then the packs don't make much sense. It;s a load of tech jargon anyway.

The poor build quality is only apparent once you start to live in the house. The floorboards creak, the bathrooms leak, the door and windows dont align when closed, missing insulation etc - all these things ought to have been tested by NHBC but they dont I guess.

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18 hours ago, Wayward said:

https://www.bbc.co.uk/news/business-47356378

Reported in BBC..

Leasehold houses with rents that step up are a scam...there is another thread on that issue I think.  There is no good reason why a house (as opposed to a flat)  should be leasehold, it should be freehold...it is a scam exploiting naïve usually FTBs desperate to buy.  With HTB it is a scam on top of a scam.

 

I think the point to take from attached article is..

Analysts at Liberum said they would be very surprised if Persimmon was excluded from the next phase of the Help to Buy scheme. They noted that Persimmon is the biggest user of the scheme, and many of the issues are said to have been resolved.

Nothing will be done.

Leasehold houses........who consented to that? Ground rent increases doubling up in a short period of time, who consented to that?.........equity loans, what is that all about, who benefits from that?

Who would want to buy a new build, who would want to buy any home with bleed you dry restrictions and clauses, having a long-term chain around your neck.........someone must be making from it.;)

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Property expert Henry Pryor has been on the Today programme talking about Persimmon's results and the UK housing market in general.

He points out that last year half the number of homes Persimmon built were underpinned by support from the taxpayer-funded Help to Buy scheme.

Under the Help to Buy equity loan scheme, people in England trying to buy a new-build property who have a 5% deposit can take out a 20% loan from the government (40% in London) and cover the rest with a mortgage.

Mr Pryor says the scheme was brought in for legitimate reasons following the credit crunch, to restore confidence in the sector.

But he warns: "Help To Buy has been the crack cocaine of the building industry... when we are weaned off it, it is going to be painful."

no sh1t!

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Overnight, this would poison them. They would be unable to buy any site in the open market, as both prices and rates would be far less than competitors. Ditto, they would struggle massively as the sales channel is effectively removed, thus the quick sellers (2 bed homes) which are fundamental to servicing debt, will be anything but. Ditto; sales would primarily be to those in chains, as opposed the FTBs.

This won't impact supply as another company will pick up the slack. It's only really the land owner who suffers from lower expected sales prices.

This would be terrific news for the industry generally. Perhaps it could be followed with a bond, whereby a portion of the purchase price is held, and only released to the developer on satisfaction of defects resolution / [x] years. Again, this would just reduce land prices rather than hurt developers (unless they consistently built crap product).

Truth is developers get the heat (and often rightly so), but it's a system that ultimately prizing the landowner first. Given that planning is a public good, it follows (to me) that regulation isn't a dirty word.

 

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Housebuilder Persimmon has announced annual profits of £1.091bn for 2018, up from £970m a year earlier.

Like other housebuilders the firm has been boosted by its involvement in the government's Help to Buy scheme, low UK interest rates, and high rates of employment.

On Monday shares in Persimmon fell sharply after the company's continued participation in the Help to Buy scheme came under government scrutiny.

do we as tax payers get a dividend? :blink:

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The name persimmon always strikes me as odd, supposedly it is name after a horse. Is very similar to permission, maybe some unsubtle subliminal message intended.

Theses companies all have too many friends and nothing will happen to them. In the off chance it did it would make no difference as all the building is done by contractors. Most of the contractors are as dodgy as the builders are are often their mates

 

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£1 Billion profit for building 8,000 houses. That £125,000 profit per house. Never mind numeracy skills, the government doesn't even know how to use a calculator.

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1 hour ago, hurlerontheditch said:

Mr Pryor says the scheme was brought in for legitimate reasons following the credit crunch, to restore confidence in the sector.

Allowing markets to revert to mean, as they were doing after the subprime bubble burst, would have been the legitimate thing to do.

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8 minutes ago, peter_2008 said:

£1 Billion profit for building 8,000 houses. That £125,000 profit per house. Never mind numeracy skills, the government doesn't even know how to use a calculator.

That's a huge profit on a measly 8,000 houses. What a pi$$ take.

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The most devastating effect of HTB is that it effectively lowers LTV ratio.

Say FTB only have £15,000 as a deposit and say the max they can borrow is 75% LTV. Then, the max the house can sell is £60K

Say FTB only have £15,000 as a deposit and say the max they can borrow is effectively 95% LTV (i.e with 20% HTB), the max the house can sell is £300,000. 

It is truly the "crack cocaine",  and now people are hooked on it,  the government just need to invent the mortgage equivalent of "meth". 

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1 hour ago, peter_2008 said:

£1 Billion profit for building 8,000 houses. That £125,000 profit per house. Never mind numeracy skills, the government doesn't even know how to use a calculator.

HMG want a piece of this action, and will threaten P. with more Share Price destruction, that will deduct, rather than add to bonuses.  Currently, it is an obvious example of Public money migrating to Private wealth.

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