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Could Help to Buy blow up in the government's face now?


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3 hours ago, Si1 said:

If house builders conduct fire sales. Where does that leave Help to Buy?

It still means buyers are buying 80% and the govt own 20%. whatever price a house is sold at.  

Builders will just stop building if the market falls when the existing sites are old out.  

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9 hours ago, Si1 said:

As per title.

If house builders conduct fire sales. Where does that leave Help to Buy?

Will the govt ever get its money back?

Which is why I genuinely believe, we will see inflation. Theres no other way out of this mess...

House builders will not sell cheaply on mass, that's not going to happen. They will simply stop building.

If these individuals default (recent HTB), where are we going to put them, in stoke or grimsby? Theres no council housing stock left.

The amount of new builds, in Bham, which are on 5% deposits is astonishing.

The other alternative, is to relax and deregulate laws, so we can legally cram more people into buildings. That, wouldn't be popular.

Unless the banks reposses and choose to rent them out, which makes no sense either... if people cannot make mortgage payments, they sure as hell aren't paying rent.

Only option in my eyes is inflation or some sort of direct relief for mortgage holders. State benefits prop up mortgages to 200k, however it's a loan which is paid back, they would need sufficient equity.

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11 minutes ago, Speed1987 said:

Which is why I genuinely believe, we will see inflation. Theres no other way out of this mess...

Or they lose control and pain is inflected 

9 hours ago, Si1 said:

Will the govt ever get its money back?

Was it ever the plan to get the money back?

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5 hours ago, richmondtw said:

Builders will just stop building if the market falls when the existing sites are old out.  

And builders will go bankrupt, you fail to mention

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2 hours ago, Freki said:

Or they lose control and pain is inflected

More likely IMHO.  How's inflation worked for the last decade?  Japan anyone??

2 hours ago, Speed1987 said:

The amount of new builds, in Bham, which are on 5% deposits is astonishing.

5% products have vanished.  Very few 10% left.  15% is the new bar.  Admittedly its much easier to get a 15% deposit for a 2 bed in Bham than it is down south!! 

2 hours ago, Speed1987 said:

If these individuals default (recent HTB), where are we going to put them, in stoke or grimsby? Theres no council housing stock left.

Private landlords are the new landlord, apparently, hence "landlord benefit", landlord speed.  But you knew that already ? This might be a good reason to "let it fall" IMHO, as why keep burdening the country with ever expanding housing benefit bills at the expense of the tax payer?

Oh yes I know your answer, so I'll save you some copy and paste "the gov wont let it happen".  

8 hours ago, richmondtw said:

Builders will just stop building if the market falls when the existing sites are old out.  

What will builders do for income?  Play the stock market? 

2 hours ago, Speed1987 said:

Only option in my eyes is inflation or some sort of direct relief for mortgage holders. State benefits prop up mortgages to 200k, however it's a loan which is paid back, they would need sufficient equity.

Or they could simply not intervene.  

They had a chance to extend the furlough scheme which quite honestly would have took care of this, acting as some kind of floor for the house market in effect.  They could offer further mortgage holiday extensions too. 

Might be time to write to your MP to get that scheme turned on again?  

Edited by blackhole
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Tories can't build social housing, it's against their ideology.

Hence help to buy.

They are going to throw a lot of cash at this before it fails. The problem the government has is that if it does fail, there will be endless sad faces in the Daily Rage saying how the government conned them into help to buy and how they want their money back. Which is not good pr for the government. That's traditionally why the government stays out of markets like this, because they don't want the negative pr when it all goes tits up. See banking as well.

I don't know whether help to buy will collapse, but it's not going to go down unless there is no alternative. They will continue to prop it up because the alternative, social housing, is an absolute no no for them.

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Plenty want the planning permission but don't want to actually build anything.....they hope they can off load it for a high price for some builder to build.

Looks like the big money is made from a planning stamp.;)

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Posted (edited)

If HTB causes a 2 tier market between new build and 2nd hand homes, will it mean people with small deposits are basically forced into the new build space, and people with bigger pots will have the choice of the 2nd hand market running at much lower levels.

People buying using HTB equity loan on new builds will be in instant negative equity (, more so than they already are). A bit like the Northern Rock 110% mortgage.

At some point it could look pretty scandalous when you see the lifetime costs imposed on people using HTB. People trapped.

So it might not fail financially. But politically it could be a disaster. Speculating.

 

Edit: if 2nd hand values do fall very far compared to when they were new then the HTB customers could apply to get their loan written off. There's a thought.

Edited by Si1
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3 hours ago, Speed1987 said:

House builders will not sell cheaply on mass, that's not going to happen. They will simply stop building.

I don’t agree with this.  They will stop building when their company defaults.  Until then, they carry on regardless.  Some are so short for cash, then they rent the properties out and try and sell with tenant in situ.  Others would take 50% off in desperation to get the banks off their backs.  Reckon they would sell 2 at half price to make the payment due.  They have tight plans and have to meet the deadlines.  This is all over UK.  Sales are taking 3 times as long to go through.

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54 minutes ago, blackhole said:

More likely IMHO.  How's inflation worked for the last decade?  Japan anyone??

5% products have vanished.  Very few 10% left.  15% is the new bar.  Admittedly its much easier to get a 15% deposit for a 2 bed in Bham than it is down south!! 

Private landlords are the new landlord, apparently, hence "landlord benefit", landlord speed.  But you knew that already ? This might be a good reason to "let it fall" IMHO, as why keep burdening the country with ever expanding housing benefit bills at the expense of the tax payer?

Oh yes I know your answer, so I'll save you some copy and paste "the gov wont let it happen".  

What will builders do for income?  Play the stock market? 

Or they could simply not intervene.  

They had a chance to extend the furlough scheme which quite honestly would have took care of this, acting as some kind of floor for the house market in effect.  They could offer further mortgage holiday extensions too. 

Might be time to write to your MP to get that scheme turned on again?  

Yea, 5% products have vanished, correct. I'm discussing recent completions, in the past 5 years.

If we allow it to unwind, as you suggest, where do those, who have recently bought go? 

Landlords would buy cheaply and families would be left with bad credit. Hardly fair on honest hardworking people, the Tories would lose alot of votes.

Nah I don't agree with Furlough, never have. I'm guessing the goverment will intervene again, after testing the water. If not, it's down to mortgage lenders..

Edited by Speed1987
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2 minutes ago, Speed1987 said:

Yea, 5% products have vanished, correct. I'm discussing recent completions, in the past 5 years.

If we allow it to unwind, as you suggest, where do those, who have recently bought go? 

Landlords would buy cheaply and families would be left with bad credit. Hardly fair on honest hardworking people, the Tories would lose alot of votes.

Nah I don't agree with Furlough, never have. I'm guessing the goverment will intervene again, after testing the water.

You completely underestimate what Covid has done to the housing market.

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27 minutes ago, blackhole said:

Hang on, are we talking about the same tory party here? ?  

Well not just against their ideology.

But ... people who own their own houses are significantly more likely to vote Tory. So the idea that the Tories are going to undergo a large social housing build program is fanciful.

They may alter help to buy in many different ways to make it more attractive or viable . But they ain't gonna build council houses.

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6 minutes ago, xxxx said:

You completely underestimate what Covid has done to the housing market.

Nothing has really changed up until now, just transactions falling through and overpriced properties giving 5-10% discounts. Well the housing market was put on pause.

What's interesting, is the high level of recent sales at auction and recent STC over the past 2 weeks, shows demand is clear. I'm not sure about London, but right now Birmingham's stock is selling at an increased price.

Logic tells me we should see a fall, but I know the BOE and GOV will keep throwing money from the sky.

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Love fact that the advert currently showing on this page for me is for Bellway - "Help to Buy is due to change, we're here to help with great incentives ,  Find out more"!  " Let's get Britain moving with Bellway and Help to Buy!!"

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2 minutes ago, Gigantic Purple Slug said:

Well not just against their ideology.

But ... people who own their own houses are significantly more likely to vote Tory. So the idea that the Tories are going to undergo a large social housing build program is fanciful.

They may alter help to buy in many different ways to make it more attractive or viable . But they ain't gonna build council houses.

I agree, they are also more likely to bail out HTB mortgage holders or create some scheme that they were miss-sold.

Speaker " was you miss-sold a new house via HTB during 2008-2020, we've found most of those houses are sub-standard and are offering compensation or gifting of equity loans".

We have to save these hard working families from ending up on the streets, whilst walking past Jim lying next to McDonalds.

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3 minutes ago, Speed1987 said:

Nothing has really changed up until now

Are you for real?  Are you actually living in the same world as me?  With all due respect, if you believe this, You are deluded.  Everything has changed and I am living it on a daily basis.

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40 minutes ago, Speed1987 said:

Nothing has really changed up until now

Oh dear.  

54 minutes ago, Speed1987 said:

If we allow it to unwind, as you suggest, where do those, who have recently bought go? 

Landlords would buy cheaply and families would be left with bad credit. Hardly fair on honest hardworking people, the Tories would lose alot of votes.

Oh I dont know, to other potential owner occupiers?  You know drain the swamp of vampire BTL model?  

Not all families have thrashed credit.  

Tories are good till 2024 at least... Labour keep performing public hari-kari (fun to watch, though) .... seems like they'll be fine!! 

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1 hour ago, Speed1987 said:

Nah I don't agree with Furlough, never have. I'm guessing the goverment will intervene again, after testing the water. If not, it's down to mortgage lenders..

They've been signalling a lot lately that its not an option to extend furlough scheme.  

IMHO quicker we pull that band-aid the sooner we can figure out this new economy/world.  Just can-kicking in meantime.

Besides, intervene again and doesn't this send the signal "its ok you dont need to save / put any aside, we'll come to the rescue" ?  Terrible messaging...

52 minutes ago, Gigantic Purple Slug said:

But ... people who own their own houses are significantly more likely to vote Tory. So the idea that the Tories are going to undergo a large social housing build program is fanciful.

They may alter help to buy in many different ways to make it more attractive or viable . But they ain't gonna build council houses.

Hard to say either way atm; seems ideology has gone out the window as things stand.  

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9 minutes ago, blackhole said:

They've been signalling a lot lately that its not an option to extend furlough scheme.  

IMHO quicker we pull that band-aid the sooner we can figure out this new economy/world.  Just can-kicking in meantime.

Besides, intervene again and doesn't this send the signal "its ok you dont need to save / put any aside, we'll come to the rescue" ?  Terrible messaging...

Hard to say either way atm; seems ideology has gone out the window as things stand.  

I suppose the question will be - what will the Tories feel they have to do to win the next General Election.

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59 minutes ago, xxxx said:

Are you for real?  Are you actually living in the same world as me?  With all due respect, if you believe this, You are deluded.  Everything has changed and I am living it on a daily basis.

Well, changed as in the sense of Covid19, Furlough hasn't ended yet... Until the props are completely removed, we won't see a proper impact.

Quick sales now at 10-20% below market value, on overpriced houses is nothing of value really.

Don't be surprised, if the goverment allows those with the capacity to manage their finances, to exit now and then later step in to give others financial support. Possible mortgage relief 

Tbh, I envision HTB becoming more generous long term.

 

17 minutes ago, blackhole said:

They've been signalling a lot lately that its not an option to extend furlough scheme.  

IMHO quicker we pull that band-aid the sooner we can figure out this new economy/world.  Just can-kicking in meantime.

Besides, intervene again and doesn't this send the signal "its ok you dont need to save / put any aside, we'll come to the rescue" ?  Terrible messaging...

Hard to say either way atm; seems ideology has gone out the window as things stand.  

Yea without a doubt Furlough is ending, I suspect, in work support may become more generous. Such as tax relief for keeping on workers etc... I doubt they are done yet.

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