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Where does Help To Buy equity loan scheme stand now?

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As per title. It's a doozy. Govt surely going to lose money on any new lending on this scheme, surely?

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In theory, if prices drop, they will stand to lose money on all the lending ... Which at the end of 2018 was apparently £12bn lent to 211, 000 people, of whom 63% didn't even need to use the scheme. 

The National Audit Office reported that, by December 2018, the scheme had supported 
around 211,000 households to buy properties, through loans totalling £11.7 billion. The 
Department’s most recent evaluation of the scheme, published in October 2018, found 
that some 37% of buyers could not have bought a property at all without the support of 
the scheme. This implies that around three-fifths of buyers did not need the support 
of the scheme to buy a property. 

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Dianne Abbott gets blasted for her maths skills, but never spent a penny.

Meanwhile 'austerity' Tories spurt off more money in the face of the UK.  Forget 'trickle down' economics, this is splashback buk*kke economics. 

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2 hours ago, msi said:

Dianne Abbott gets blasted for her maths skills, but never spent a penny.

Meanwhile 'austerity' Tories spurt off more money in the face of the UK.  Forget 'trickle down' economics, this is splashback buk*kke economics. 

It shows how biased the media is.

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8 hours ago, regprentice said:

In theory, if prices drop, they will stand to lose money on all the lending ... Which at the end of 2018 was apparently £12bn lent to 211, 000 people, of whom 63% didn't even need to use the scheme. 

The National Audit Office reported that, by December 2018, the scheme had supported 
around 211,000 households to buy properties, through loans totalling £11.7 billion. The 
Department’s most recent evaluation of the scheme, published in October 2018, found 
that some 37% of buyers could not have bought a property at all without the support of 
the scheme. This implies that around three-fifths of buyers did not need the support 
of the scheme to buy a property. 

£11,700,000,000 / 211000 = £55450 HTB loan per property   Absolutely insane. 

I have no idea why shares in housebuilders are still trading for what they are, does the market just assume that housebuilders will always get a bailout?

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1 hour ago, Council estate capitalist said:

£11,700,000,000 / 211000 = £55450 HTB loan per property   Absolutely insane. 

I have no idea why shares in housebuilders are still trading for what they are, does the market just assume that housebuilders will always get a bailout?

Considering HTB is ongoing and publicly funded, and the private sector has mostly ceased to exist, then yeah, broadly.

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Will help-to-buy restrictions cut the price of new builds?

https://www.theguardian.com/money/2020/jun/01/will-help-to-buy-restrictions-cut-the-price-of-new-builds

"...Q I am looking into buying a new-build property and am considering using the help-to-buy scheme. I have weighed up the benefit of using the scheme and feel the interest savings over the first five years would outweigh the potential for the government’s 20% stake to appreciate in value substantially over the same term. My main concern is that help-to-buy will be restricted from next March to first-time buyers. I am a second-time buyer so wouldn’t be able to use the scheme. However, there is evidence that help-to-buy inflates new-build property prices (encouraging them to build more, I assume) so would it be better to wait until after next March and see if new-build purchase prices come down once the scheme doesn’t apply to most buyers? I am looking at a four-bedroom property at about £300,000 so assume that size of property wouldn’t be a popular first-time buyer choice and therefore most buyers would have less purchasing power once the scheme is withdrawn. Any thoughts would be great. SL"

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On 4/30/2020 at 7:11 PM, Council estate capitalist said:

£11,700,000,000 / 211000 = £55450 HTB loan per property   Absolutely insane. 

I have no idea why shares in housebuilders are still trading for what they are, does the market just assume that housebuilders will always get a bailout?

They have strongish balance sheets this time and plan to wait it out rather than chase down the market.

The share prices are reflective that they will have a time out with low transaction volumes but the amount of credit chucked into the market will mean it will come back strong. When it does those with the landbanks etc do quite well.

Retail on the other hand... 

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  • 395 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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