Times Front Page - Help to Buy 'Back on the Table'

[24gray24]

14 minutes ago, 24gray24 said:

40k per year × however many years × £1bn for every 10% fall. 

 

Sorry, correction: 40k per year × however many years× £1bn per 100k house for every 10% fall. 

[Bear Goggles]

You have to understand that they will throw everything they can at falling house prices, especially in the run up to a general election. Whether this new HtB ‘works’ not that important, if it doesn’t they’ll try something else. They’ve been pumping house prices for 20 odd years, they are not going to stop now. They will take YOUR money and use it to make houses more expensive than they otherwise would be. It’s what they do. 

[MARTINX9]

The autumn statement might not be until November - with presumably changes coming in next April given lead in times. Its getting a bit close to the wire if its to have any impact on the next general election.

Seems there is talk about it - but the article suggests that nothing is exactly imminent. We shall see.

If they did introduce it would Labour reverse it - even Corbyn backed help to buy. 

Edited May 1, 2023 by MARTINX9

[Blobsy]

The disaster stories from the original round are going to pick up pace from here on so...

[Si1]

2 hours ago, Bear Goggles said:

You have to understand that they will throw everything they can at falling house prices, especially in the run up to a general election. Whether this new HtB ‘works’ not that important, if it doesn’t they’ll try something else. They’ve been pumping house prices for 20 odd years, they are not going to stop now. They will take YOUR money and use it to make houses more expensive than they otherwise would be. It’s what they do. 

https://12ft.io/proxy?q=https%3A%2F%2Fweb.archive.org%2Fweb%2F20220725184549%2Fhttps%3A%2F%2Fwww.thetimes.co.uk%2Farticle%2Feconomist-fred-harrison-why-i-think-house-prices-will-crash-in-2026-3ln7rw35b

https://www.thisismoney.co.uk/money/mortgageshome/article-11327445/There-wont-house-price-crash-says-Fred-Harrison.html

"

Fred Harrison, a British author and economic commentator, is sticking by his prediction that house prices will crash in 2026.

Until that time, Harrison believes they will continue to rise, albeit not at the same pace of the past two years.

'I am sticking with the 2026 end-of-house-price-rise cycle,' Harrison told This is Money, 'subject to Putin not launching a nuclear weapon - at which point, all bets are off.

'There will be no crash, just a slowing of the rate of increase over the rates achieved during the Covid period.

'Governments in the UK, USA and China are on the cusp of splurging out large amounts of debt-fuelled spending, which will buoy up the property markets.

'Whatever else Liz Truss does, she will not offend her home-owning voters.'"

[Bear Goggles]

3 minutes ago, Si1 said:

https://12ft.io/proxy?q=https%3A%2F%2Fweb.archive.org%2Fweb%2F20220725184549%2Fhttps%3A%2F%2Fwww.thetimes.co.uk%2Farticle%2Feconomist-fred-harrison-why-i-think-house-prices-will-crash-in-2026-3ln7rw35b

https://www.thisismoney.co.uk/money/mortgageshome/article-11327445/There-wont-house-price-crash-says-Fred-Harrison.html

"

Fred Harrison, a British author and economic commentator, is sticking by his prediction that house prices will crash in 2026.

Until that time, Harrison believes they will continue to rise, albeit not at the same pace of the past two years.

'I am sticking with the 2026 end-of-house-price-rise cycle,' Harrison told This is Money, 'subject to Putin not launching a nuclear weapon - at which point, all bets are off.

'There will be no crash, just a slowing of the rate of increase over the rates achieved during the Covid period.

'Governments in the UK, USA and China are on the cusp of splurging out large amounts of debt-fuelled spending, which will buoy up the property markets.

'Whatever else Liz Truss does, she will not offend her home-owning voters.'"

“Whatever Liz Truss does…” 🤔

I presume this was written before the Kamiqwasi budget pushed mortgage rates up?

Apart from that, yes, bailing out the wealthy at the expense of everyone else has to be the odds-on bet. 

[henry the king]

Is HTB good for the people who get it?

I mean, 5 years interest free and then a mortgage rate of 1.75% sounds insanely generous.

But the downside is if house prices go up (which naturally they do purely due to inflation - much like the price of everything goes up) then you actually owe more than the original when you sell. So then it becomes a really bad deal. 

[Innkeeper]

You start to pay interest from year 6, on the fifth anniversary that you took out your equity loan. Your first interest payment will be 1.75% of the equity loan amount you borrowed. Your interest will go up each year in April by the Consumer Price Index (CPI), plus 2%.

An insanely bad deal surely?

[Bruce Banner]

2 minutes ago, Innkeeper said:

You start to pay interest from year 6, on the fifth anniversary that you took out your equity loan. Your first interest payment will be 1.75% of the equity loan amount you borrowed. Your interest will go up each year in April by the Consumer Price Index (CPI), plus 2%.

An insanely bad deal surely?

Everything's on the "Never Never" these days, even "help".

[spyguy]

36 minutes ago, henry the king said:

Is HTB good for the people who get it?

I mean, 5 years interest free and then a mortgage rate of 1.75% sounds insanely generous.

But the downside is if house prices go up (which naturally they do purely due to inflation - much like the price of everything goes up) then you actually owe more than the original when you sell. So then it becomes a really bad deal. 

With 5% CPI inflation that free loan will start to get painful after y10.

 

[petetong]

2 minutes ago, spyguy said:

With 5% CPI inflation that free loan will start to get painful after y10.

 

They will count on it being 2% inflation or less by then.

[MARTINX9]

1 hour ago, henry the king said:

Is HTB good for the people who get it?

I mean, 5 years interest free and then a mortgage rate of 1.75% sounds insanely generous.

But the downside is if house prices go up (which naturally they do purely due to inflation - much like the price of everything goes up) then you actually owe more than the original when you sell. So then it becomes a really bad deal. 

Problem is don't the developers/builders just whack 20% (or 40% in London) on the price of new builds - so its not a good deal - in line with the level of the interest free loan. As opposed to charging what the free market - via bank lending/FTB deposits - would bear.

 

Which is exactly what in effect happened with HTB 1.

[Orb]

^^ 

That's why I don't understand it when people say HTB wouldn't be too bad in the scheme of things. I thought the consensus here was that HTB was disasterous and led to massive HPI. I couldn't imagine it being different next time around, and I couldn't imagine house builders not offering donations, again, to get this policy implemented, again. 

The bottom 99.9% live in a massive daily exploitative scam, and the vast majority lack even the slightest whiff of critical thinking and knowledge to see it, yet alone understand it. 

Edited May 1, 2023 by Orb

[kzb]

1 hour ago, Innkeeper said:

You start to pay interest from year 6, on the fifth anniversary that you took out your equity loan. Your first interest payment will be 1.75% of the equity loan amount you borrowed. Your interest will go up each year in April by the Consumer Price Index (CPI), plus 2%.

An insanely bad deal surely?

It depends what it means.

Say CPI is 10%, does it mean

1.75% x 1.12 = 1.96%

or does it mean

1.75% + 12% = 13.75% ?

Big difference !

[24gray24]

1 hour ago, spyguy said:

With 5% CPI inflation that free loan will start to get painful after y10.

 

Is that cpi +2% in year 6? That amount + cpi + 2% in year 7 etc?

[henry the king]

16 minutes ago, kzb said:

It depends what it means.

Say CPI is 10%, does it mean

1.75% x 1.12 = 1.96%

or does it mean

1.75% + 12% = 13.75% ?

Big difference !

It means 1.96%. But you would be surprised how quickly that can spiral out of control if inflation is sticky at 10% (if mortgage rates come down then it could become a bad deal fairly quickly)

Edited May 1, 2023 by henry the king

[kzb]

10 minutes ago, henry the king said:

It means 1.96%. But you would be surprised how quickly that can spiral out of control if inflation is sticky at 10% (if mortgage rates come down then it could become a bad deal fairly quickly)

Are you allowed to remortgage if the market is offering better rates ?

[henry the king]

2 minutes ago, kzb said:

Are you allowed to remortgage if the market is offering better rates ?

Dunno honestly. I would doubt it as the amount they owe depends on how much it sells for. So if it sells for a 100k profit then the government gets 20k of that profit. Even though the owners has to do all the maintenance etc. Also means extending is not worth it 

Edit: You need permission to make structural alterations and then might not owe the government money. But this has to be for medical reasons. 

Edited May 1, 2023 by henry the king

[kzb]

9 minutes ago, henry the king said:

Dunno honestly. I would doubt it as the amount they owe depends on how much it sells for. So if it sells for a 100k profit then the government gets 20k of that profit. Even though the owners has to do all the maintenance etc. Also means extending is not worth it 

Edit: You need permission to make structural alterations and then might not owe the government money. But this has to be for medical reasons. 

I don't know if I would fancy it if you can't remortgage for the whole length of the term.

Like you say, compound interest can make it very expensive towards the end of a 25 year term.  It's a gamble with you betting that inflation will be low.

Edited May 1, 2023 by kzb

[Armus]

I was most likely never going to vote Tory again but this would just hammer the nails into the coffin and then de-consecrate the burial ground.

[henry the king]

38 minutes ago, kzb said:

I don't know if I would fancy it if you can't remortgage for the whole length of the term.

Like you say, compound interest can make it very expensive towards the end of a 25 year term.  It's a gamble with you betting that inflation will be low.

It all depends on the detail honestly. I'd guess any new HTB won't have the 6 year rate at 1.75% when the average mortgage rate is 5%. 

[Aidan Ap Word]

9 hours ago, 24gray24 said:

This is just an advertising puff piece requested by people who pay for ads: estate agents. 

Newspapers don't do reporting or  investigating these days. They just write whatever advertisers want. 

+1

 

Like this piece recently:

[24gray24]

2 hours ago, kzb said:

Are you allowed to remortgage if the market is offering better rates ?

Yes you are allowed to remortgage. Then you use some of that remortgage money to pay off the HTB loan. And have a normal mortgage. 

The problem is that you have to find a mortgage company that says the house is worth the price you paid for it (which was inflated by the developer to grab the HTB amount). 

If you can't, you sell it. And HTB (ie the taxpayer) takes a loss. 

[DarkHorseWaits-NoMore]

Charlie says:

https://youtu.be/uIWejN9quBs?t=61

[spyguy]

11 hours ago, kzb said:

It depends what it means.

Say CPI is 10%, does it mean

1.75% x 1.12 = 1.96%

or does it mean

1.75% + 12% = 13.75% ?

Big difference !

The interest increases by CPI + 2%, so if thats 10% -  1.75 becomes 1.90 -> 2.1 -> 2.3

And keep in mind, for most HTBers the equity loan was money they could not afford.

 

*IF*UKGOV dont change the formulae, which they probably will if theres too big a gap between the Equity loan APR and average mortgage/UK gilt

Keep in mind that outside of  London.Se the equity has been capped at a small amount - 40k in my case.

Outside of London/SE have been buying houses. If and thats a big if they bought a decent new build (is there such a thing?) then HTB may turn out to be a winner for the buyer - if the new build is decent.

LondonSe theyve been buying flats and tiny houses. These have been falling in London/Se since HTB was introduced -yes, housing for the plebs has been falling for ~7y in LondonSE.

Also bear in mind that majority of HTB lending is Halifax and Nationwide. All that other banks just went thru the motions.

And - the biggy - numbers show that you basically cant remortgage  a HTB, at least to a different lender. No bank wants another banks fkup.

I dont thin kthe article is anything more than oroperdee VI spinnging BS.

The treasury has been killing properdee related fkwittery as the cost and effort of shift UKGOV debt is becoming massive ballache.

A lot of clever idea during Gidiots time are comign back and dumpign at the mo. UKGOV reduced the bond loan rate during ZIRP. And sold a lot of idnex linked bonds.