Fat Boris to allow spongers to buy houses with their housing benefit

[Odysseus]

What kind of message does this send to aspiring FTBs who are scraping together a deposit whilst living in private rental accommodation?

This is an absolute disgrace. 

 

[FivePoundLatte]

Oh god. What a stupid policy. And to back it with mortgage insurance/guarantees...

You'd think that discussing how house prices are waaay too high would have been better, but of course it wouldn't be good politics for the Tory party.

So we're left with this inane policy which will only harm the poorest of society in the long run (by ramping up house prices even more).

[zugzwang]

Just now, Dorkins said:

Of course the 1 for 1 replacement won't happen, similar pledges on replacing council houses sold under RTB were never honoured.

There'll be no like-for-like replacement. A 12' x 12' dogkennel in the sky is a 'home' now.

[Horseradish]

1 minute ago, Odysseus said:

What kind of message does this send to aspiring FTBs who are scraping together a deposit whilst living in private rental accommodation?

They're going to be extremely angry and respond by stabbing the government at the next election. But imagine if you were a shared ownership owner, and then your neighbour gets a 70% discount on the same property, imagine how you'd feel about that.

There's a great thread here about it all:

 

[zugzwang]

15 minutes ago, Horseradish said:

In fact, the banks are going to absolutely love them.

The real spongers.

[NoHPCinTheUK]

2 minutes ago, Odysseus said:

What kind of message does this send to aspiring FTBs who are scraping together a deposit whilst living in private rental accommodation?

This is an absolute disgrace. 

 

That we need to buy a one way ticket from Ryanair. 

[TheResponsibleHouseBuyer]

The article is out:

https://www.thetimes.co.uk/article/benefits-to-bricks-as-boris-johnson-announces-right-to-buy-plans-for-low-paid-workers-wlg626frn

He will say that he ultimately wants to give millions of people the ability to buy their properties at discounts of up to 70 per cent of the market price, depending on how long they have lived there.

Johnson is also expected to announce a review of the mortgage market to see if there are ways to reduce people’s deposits. Ministers say that more than half of those in the private rented sector can afford to service a mortgage, but just 3 per cent have enough savings for a deposit.

 

 

[Horseradish]

I find it kind of tragicomic that the author of the mortgage guarantee part of this policy (Ian Mulheirn) openly stated that the right to buy part is dumb. Ace joined-up think-taking there, Boris.

[zugzwang]

1 minute ago, TheResponsibleHouseBuyer said:

The article is out:

https://www.thetimes.co.uk/article/benefits-to-bricks-as-boris-johnson-announces-right-to-buy-plans-for-low-paid-workers-wlg626frn

He will say that he ultimately wants to give millions of people the ability to buy their properties at discounts of up to 70 per cent of the market price, depending on how long they have lived there.

Johnson is also expected to announce a review of the mortgage market to see if there are ways to reduce people’s deposits. Ministers say that more than half of those in the private rented sector can afford to service a mortgage, but just 3 per cent have enough savings for a deposit.

 

 

They rhapsodise endlessly about the alleged efficiency of the market pricing mechanism except when it comes to buying a house - the most important purchase most of us will ever make. No price discounting intervention or supply-side subsidy is too big for the housing market.

[Horseradish]

Thinking about it a little, it probably won't actually make much difference to the main market in general? (there are other effects, but let's ignore those for now). Because those houses weren't on the market in the first-place it's really a closed-loop transaction with one buyer, one seller, and just a giant ton of implied government wealth transfer to the buyer. But it doesn't really affect the rest of the market, or the prices in the rest of the market, at all (?)

[TheResponsibleHouseBuyer]

Just now, Horseradish said:

Thinking about it a little, it probably won't actually make much difference to the main market in general? (there are other effects, but let's ignore those for now). Because those houses weren't on the market in the first-place it's really a closed-loop transaction with one buyer, one seller, and just a giant ton of implied government wealth transfer to the buyer. But it doesn't really affect the rest of the market, or the prices in the rest of the market, at all (?)

It does unfortunately... not now, not in 5 years, but over time these houses will reach landlords who will happily buy these off of new home owners and rent them out. The cycle then begins again.

Happened on most of those council houses in thatcher's day. 

[Odysseus]

1 minute ago, Horseradish said:

Thinking about it a little, it probably won't actually make much difference to the main market in general? (there are other effects, but let's ignore those for now). Because those houses weren't on the market in the first-place it's really a closed-loop transaction with one buyer, one seller, and just a giant ton of implied government wealth transfer to the buyer. But it doesn't really affect the rest of the market, or the prices in the rest of the market, at all (?)

Until the first purchasers sell their RTB houses to parasitic BTLers. I’m sure there will be checks in place to prevent flipping but I’m sure one will work out how to transfer the RTB to a second owners for some cash.

[TheResponsibleHouseBuyer]

Just now, Odysseus said:

Until the first purchasers sell their RTB houses to parasitic BTLers. I’m sure there will be checks in place to prevent flipping but I’m sure one will work out how to transfer the RTB to a second owners for some cash.

You would think the govt would think of this, but i don't think they think rationally anymore.

[Roman Roady]

38 minutes ago, henry the king said:

The government is broke. If they find £5-20bn down the back of the sofa it isn't going on housing props. It is going on fuel duty cuts and income tax cuts. 

That is what they need to do to get elected.

There will be no significant funding for HPI props. As this article shows. HTB is going too. 

This is actually good news. The spin is just politics, but with no new funding for HPI props it will achieve nothing and the fact HTB is going is a +ve.

Lets not get hysterical. They are broke. Any money they have will not be spent on housing. Its going to be spent on household bills of fuel duty cuts. 

Agree with all of this post...if this is it, the big policy, then I am a happy chappy.

Re: the text in bold, can anyone imagine the anger of the "hard pressed families" if any spare cash is spent on this rather than easing the cost of living "crisis".?

With this un-conservative move, he's just alienated most grass roots Tories and signed his resignation IMPO.

This won't stop a HPC.

[Horseradish]

5 minutes ago, TheResponsibleHouseBuyer said:

but over time these houses will reach landlords who will happily buy these off of new home owners and rent them out

Yup, that's the "other effects" I was referring to. Not great, but I wanted to focus on immediate housing market pricing.

[Odysseus]

Just now, TheResponsibleHouseBuyer said:

You would think the govt would think of this, but i don't think they think rationally anymore.

I can see leaflets going through letterboxes at HA homes,

”Don’t want to buy your home? Don’t worry, we’ll give you £10k if you sign up to RTB and then resell to us at the earliest opportunity. We will even cover the difference between your rent and future mortgage payments. That’s right, free £10k.”

 

 

 

[MARTINX9]

Perhaps one of the most comically stupid policy ideas I have ever seen from a UK government in relation to domestic policy. And there is a long list of those.

Giving people who can’t even afford to pay a housing association rent out of their earnings - so have to claim housing benefit - even more in benefits so they can supposedly buy the affordable home they can’t afford to rent. 

You have to laugh at the pure nerve of it. Is this idea supposed to win back votes for the Tories - from who?!

Will it ever happen though like so many of Boris’s bright ideas?

Edited June 8, 2022 by MARTINX9

[TheResponsibleHouseBuyer]

So, thinking about the future. What do we have in October?

Rising energy price cap, End of Help to Buy and probably at least another 0.5 - 1% increase in interest rates.

New build homes should expect to drop significantly, home owners may be tempted to put their crappy house on the market to buy one for bargain price (increasing available supply). All the supply and lowering prices is good.

For the short term it is right as@Horseradish said. This scheme wont affect the private market much at this point. But i think the timing and intent is definitely lost on whoever it was trying to please.

If Bojo was trying to piss off his conservative base enough, I think this just tips it further.

Edited June 8, 2022 by TheResponsibleHouseBuyer

[Horseradish]

4 minutes ago, MARTINX9 said:

Is this idea supposed to win back votes for the Tories - from who?!

Give someone a 70% discount on a property? It's a simple, naked vote purchase with billions of government funds.

[MonsieurCopperCrutch]

1 hour ago, henry the king said:

Surely this just does nothing?

If you are on housing benefit then you cannot have more than £6-16k in the bank. So no deposit worth talking about. So automatically they cannot get a mortgage.

And even if they could get a 100% mortgage then they still aren't going to be able to borrow much of anything as to be on housing benefit you have to earn little. No banks are going to lend to these people to buy a 400k home. They aren't lending £400k to a family on £40k a year lol. That is mad and they will never do it.

Doesn't matter how much you fudge the numbers, people on benefits aren't buying £300k homes.

Sounds like Boris policy. Aka it does nothing and grabs a headline.

So, if this is their prop then I don't see it doing anything. 

As I said in other threads, they have no money. Both of these schemes are without any funding and the right to buy scheme is capped at £500m in certain areas. So it is just meaningless. HTB going and no replacement basically. Props actually disappearing. HPC more likely having read this.

You need new entrants at the bottom of the pyramid to prop up the top. Sorry to say (as I'm looking to buy a new home myself) but this is going to boost prices, or at least stop any significant crash. You get what you vote for and I can happily say I never voted for these Brex_hiteer house price inflation loving elitist clowns.

[MARTINX9]

25 minutes ago, TheResponsibleHouseBuyer said:

You would think the govt would think of this, but i don't think they think rationally anymore.

You would hope there would be a time limit or restriction on people buying under this scheme qualifying for social housing again. But at a discount, sell it to a BTL who may 'help you buy' - and then back on the housing list renting. Hopefully councils and HAs will put them to the bottom of their long list - given affordable housing will be even more stretched.

Of course this idea to sell off HA homes under right to buy isn't new - it was in the Tories 2015 manifesto. It was later quietly dropped. Will this happen here too?

How many billions will it cost as well to compensate the housing associations who have huge amounts of borrowing on many of these homes.

 

https://www.mirror.co.uk/news/uk-news/george-osbornes-right-to-buy-scheme-add-5978457

[TheResponsibleHouseBuyer]

Just now, MARTINX9 said:

You would hope there would be a time limit or restriction on people buying under this scheme qualifying for social housing again. But at a discount, sell it to a BTL who may 'help you buy' - and then back on the housing list renting. Hopefully councils and HAs will put them to the bottom of their long list - given affordable housing will be even more stretched.

Of course this idea to sell off HA homes under right to buy isn't new - it was in the Tories 2015 manifesto. It was later quietly dropped. Will this happen here too?

How many billions will it cost as well to compensate the housing associations who have huge amounts of borrowing on many of these homes.

 

https://www.mirror.co.uk/news/uk-news/george-osbornes-right-to-buy-scheme-add-5978457

I personally don't think it will happen.

This came out earlier:

If they cant sort the houses through housing associations, just throwing the house from HAs to people on benefits without finance aren't going to be able to do the work themselves.

These houses will jsut go into disrepair and as stated above, over time they will be bought up by 'parasitic' BTLers who will refurb it and rent it out (probably to the same people they bought it off).

[BaldED]

Presumably the cost will come out of local authority rather than central government - win.

[spyguy]

8 hours ago, henry the king said:

Surely this just does nothing?

If you are on housing benefit then you cannot have more than £6-16k in the bank. So no deposit worth talking about. So automatically they cannot get a mortgage.

And even if they could get a 100% mortgage then they still aren't going to be able to borrow much of anything as to be on housing benefit you have to earn little. No banks are going to lend to these people to buy a 400k home. They aren't lending £400k to a family on £40k a year lol. That is mad and they will never do it.

Doesn't matter how much you fudge the numbers, people on benefits aren't buying £300k homes.

Sounds like Boris policy. Aka it does nothing and grabs a headline.

So, if this is their prop then I don't see it doing anything. 

As I said in other threads, they have no money. Both of these schemes are without any funding and the right to buy scheme is capped at £500m in certain areas. So it is just meaningless. HTB going and no replacement basically. Props actually disappearing. HPC more likely having read this.

Has the small of the kite flying about 30y fixed mortgages, floated 12 months bsck.

Just not possible without bind market and Federal backed Maes like US.

IRs are moving a lot in the wrong direction for people with limited buying.

[spyguy]

Theres this, which is much less flagged 

https://www.bbc.co.uk/news/uk-politics-61737646

Radios mangling  n confusing 2nd homes and holiday lets.

2x ctax will get 2nd homes.

Removal of small business rate relief and planning will do for FHL