Help to Buy Scheme - Good,Bad,Risky, who knows!

Shoreham Gull · Oct 5, 2013

Help to buy- for new and existing home owners..

http://www.rightmove.co.uk/help-to-buy.html

Anybody's thoughts?

Good for the people or for the government in the long run?
( seems they want interest after 5 years and 20% of house sale if sold ) :moo:

Herr Tubthumper · Oct 5, 2013

Haven't we learn anything from the recession? Artificially stimulating house buying and the price rises which come with it is totally absurd. And basing a significant part of an economic recovery on it is even more ludicrous. Recipe for further disaster.

yxee · Oct 5, 2013

If history has taught us anything, it's that it's completely safe to encourage people to saddle themselves with huge debts.

Someone forgot to teach Cameron the supply part of a supply and demand curve.

Herr Tubthumper · Oct 5, 2013

Oh, and buy-to-lets are increasing severely as well; how is this good for the nation?

Hatterlovesbrighton · Oct 5, 2013

A very good thing IMO. You could easily have people who have high salaries in secure jobs but don't have the 20% deposit.

Take Brighton. A one bed flat is probably around 200k. Even on a big salary, it would probably take 5 plus years to save £40k. All the while they are paying out rent which in quite a lot of cases will be more than the equivalent mortgage repayments.

This will hurt rather than support buy to let landlords.

Butch Willykins · Oct 5, 2013

Terrible idea. This is just going to increase demand without increasing supply. The result house prices keep rising, more people priced out.

It's a just a ploy to buy votes for the next election by making everyone feel richer.

Shoreham Gull · Oct 5, 2013

Buy-to-let side..

I think it could encourage more buy-to-lets to be bought on this scheme, instead of 1st time buyers!!

Help to buy could be used to get a second home.....

Billy the Fish · Oct 5, 2013

Can't be for a second home according to that link:

Below is a quick checklist of who is eligible for the scheme:

Available to both existing home owners and first-time buyers
Buyers need a minimum of a 5% deposit
Available on all previously owned and new build properties up to the value of £600,000
Must be your only property
Available for properties in the UK
Borrowing from a participating mortgage lender

Shoreham Gull · Oct 5, 2013

Billy the Fish said:
Can't be for a second home according to that link:

Below is a quick checklist of who is eligible for the scheme:

Available to both existing home owners and first-time buyers
Buyers need a minimum of a 5% deposit
Available on all previously owned and new build properties up to the value of £600,000
Must be your only property
Available for properties in the UK
Borrowing from a participating mortgage lender

I notice it says : Must be your only property!

What happens if your 1st property is in your partners name, etc.. Then it will be your only property!

I'm Not sure if it's good for anyone, it will get you on property ladder, but may be with huge depts owed..

GingerBeerMan · Oct 5, 2013

Shoreham Gull said:
Buy-to-let side..

I think it could encourage more buy-to-lets to be bought on this scheme, instead of 1st time buyers!!

Help to buy could be used to get a second home.....

It won't be for buy-to-letters to use. BTL is what has got us in this mess in the first place.

beorhthelm · Oct 5, 2013

bad. it's literally the same policy that got us in this mess (albeit that was in the US). it does nothing to address the supply side issues, or help people not able to raise sensible deposits due to rental costs. if subsidies where needed then tax relief on building houses would have been sensible, or possibly underwriting large loan/salary multiples (3 or 3.5 is daft low when people afford twice as much in rents). allowing councils to release equity to build housing along with an actual bonfire of planning law (bit of it anyway) would do alot to help too. even, in certain areas, impose rent controls.

basically there's alot of options, Osborne took the easiest but dumbest one.

Herr Tubthumper · Oct 6, 2013

beorhthelm said:
bad. it's literally the same policy that got us in this mess (albeit that was in the US). it does nothing to address the supply side issues, or help people not able to raise sensible deposits due to rental costs. if subsidies where needed then tax relief on building houses would have been sensible, or possibly underwriting large loan/salary multiples (3 or 3.5 is daft low when people afford twice as much in rents). allowing councils to release equity to build housing along with an actual bonfire of planning law (bit of it anyway) would do alot to help too. even, in certain areas, impose rent controls.

basically there's alot of options, Osborne took the easiest but dumbest one.

This. I find it incredible that given the mess the world got itself into over mortgages the UK is going down this path yet again. And whilst on the subject of stimulating the economy what happened with Osborne's "March of the makers"? Stimulate manufacturing not sodding housing. It's an utterly brain dead approach. You need to get Osborne out at the earliest opportunity; you really do.

Beach Hut · Oct 6, 2013

Herr Tubthumper said:
This. I find it incredible that given the mess the world got itself into over mortgages the UK is going down this path yet again. And whilst on the subject of stimulating the economy what happened with Osborne's "March of the makers"? Stimulate manufacturing not sodding housing. It's an utterly brain dead approach. You need to get Osborne out at the earliest opportunity; you really do.

I actually agree on this as well, very stupid idea to inflate the housing market and just recreate the same total carnage again. What happens when the inevitable rise in interest rates has to happen ?

Tom Hark Preston Park · Oct 6, 2013

Home ownership in the UK has become fatally entwined with casino capitalism fast-buck Thatcherist dogma. By allowing you to buy your council house she was expecting to buy your vote (never worked in Scotland, bitch! )Take a look at this Wikipedia entry for home ownership percentages. OK, some of the figures are a bit dated but citizens of Germany, The Netherlands and France don't feel the need to own their own home. For citizens of our mature European neighbours a home is patently somewhere to live rather than a fast-buck investment vehicle. Personally I blame Sarah Beeny, Thatcher's evil emissary on earth.

http://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

Herr Tubthumper · Oct 6, 2013

Beach Hut said:
What happens when the inevitable rise in interest rates has to happen ?

Exactly. The housing market should be left alone to find its own level. As another poster said you're increasing demand whilst keeping supply static and so the cycle starts again, house prices soar, and when interest rates go up it comes crashing down again. I also think the buy-2-let market needs reining in.

Tom Hark Preston Park · Oct 6, 2013

Herr Tubthumper said:
Exactly. The housing market should be left alone to find its own level. As another poster said you're increasing demand whilst keeping supply static and so the cycle starts again, house prices soar, and when interest rates go up it comes crashing down again. I also think the buy-2-let market needs reining in.

For sure. If you've got a holiday home in, say, Greece, their government is not slow in coming forward to squeeze yer pips. Would hope that our own government would get a handle on people profiteering out of an affordable homes shortage. The mere fact that the term 'affordable homes' is used at all is an admission that there's rampant profiteering going on.

seagullsovergrimsby · Oct 6, 2013

Waino696969 said:
Terrible idea. This is just going to increase demand without increasing supply. The result house prices keep rising, more people priced out.

It's a just a ploy to buy votes for the next election by making everyone feel richer.

A good ploy for the Conservatives as the property bubble will burst during the lifetime of the next Government and the blame will lay at the feet of Labour for not sorting it out once they got back into power.

Herr Tubthumper · Oct 6, 2013

Tom Hark said:
For sure. If you've got a holiday home in, say, Greece, their government is not slow in coming forward to squeeze yer pips. Would hope that our own government would get a handle on people profiteering out of an affordable homes shortage. The mere fact that the term 'affordable homes' is used at all is an admission that there's rampant profiteering going on.

Quite. I really fail to see who buy-2-let benefits other than landlords. We need a tax on second homes.

looney · Oct 6, 2013

Herr Tubthumper said:
Quite. I really fail to see who buy-2-let benefits other than landlords. We need a tax on second homes.

I agree but you are confusing 2 issues.

Buy to let is a distribution issue, where wealth is redistributed from have nots to haves, a kind of parasite Capitalism with zero social welfare.

Demand driven price rises are to do broadly with numbers of people, Erm that would be the millions of people comming here which you are in favour of.

Supply hasn't changed much, in fact its increased, but not as much as population/Demand.

This subsidy is the Government playing favourites, its impact on total prices would depend on the number of people who want to use it as a percentage of buyers and the elasticity of demand.

BLOCK F · Oct 6, 2013

It really is a daft idea.
House prices are still far too high on an average price to average earnings ratio.Many will still be saddling themselves with debts they can't really afford and when interest rates rise and the bubble bursts,negative equity will rear its ugly head again.
Our unhealthy obsession with house prices in this country really will end in tears and I find it so sad that young people cannot buy a house for an amount that doesn't crucify them financially.
House prices should be allowed to find their correct level over time and not be artificially stimulated by a crackpot scheme.
Do Governments never learn?
I write as a Tory voter!

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