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

[sten_super]

I don't really understand all the hostility to BTL's (I'm not one by the way). If you are fortunate enough to have savings, BTL is one of the few ways to get a return on your money - 6% nett if you're lucky. It's not all about mortgage rates, the rates offered at present to savers are appalling.

The return is precisely the problem. BTLers purchase a proportion of the housing stock (often concentrating on smaller properties with lower overheads should the property remain unlet) using their larger asset base (meaning they are able to afford more significant deposits than FTBers) driving up prices for these properties AND then compounding the problem by charging rents sufficient to cover the mortgage. The tenant is then stuck paying mortgage-level rent (in many cases plus a 'management' fee), making it more difficult to save for a house deposit of their own.

Private rental either needs to be tightly controlled (probably involving price guides, limited increases, secured long term tenancy, etc.) or made extremely unattractive financially (which might in fact involve similar measures, but could also include hefty tax rates on second properties).

 

[unklbrian]

Here's a contraversial idea ...
Put an immediate seizure on Banked Land with Planning permission . any that has been undeveloped for more than say 3years, compulsory purchase it , then using the money left from Thatchers 'Right To Buy' scheme ----- build social housing ..

after all , the country is in a financial jam & we are all in it together ....
that'll work !

 

[The Antikythera Mechanism]

RBS and its Natwest subsidiary said they would be offering two and five-year fixed rate deals at 4.99% and 5.49% interest rates respectively with no fee. The brands expect a rush of interest - signing up 25,500 first and next time buyers over three years.

http://news.sky.com/story/1151527/help-to-buy-scheme-first-rates-are-revealed

 

[Nibble]

Have you seen some of the restrictions they have put on this? If yo are poor enough to have to use this scheme chances are you will be too poor to qualify. This will be two things. Pointless and costly.

 

[Gordon Bennett]

If yo are poor enough to have to use this scheme chances are you will be too poor to qualify.

Sadly, that is probably very true.

I know someone who looked at shared ownership and as a single parent in full time employment seemed like the perfect candidate but the Housing Association said she didn't earn enough at £24,000 pa to afford their 2 bedroom flat, yet the amount she'd be paying to rent a 2 bedroom flat was more than the Housing Association said she'd need (and supposedly couldn't afford) for the shared ownership property. Madness!

 

[Herr Tubthumper]

I can see your point , BUT - wouldnt it be better to encourage investment in some form of Manufacturing

Totally. Osborne even said himself the economy needed to be rebalanced; remember his "march of the makers" quip. So why doesnt he do something about it? Instead he sets the UK on exactly the same journey which led to this economic carnage. Utter, utter, utter madness. Some might say Labour made mistakes, it is an even more foolish person who does not learn from mistakes.

 

[cunning fergus]

Agreed, it's absolute pie-in-the sky - the government that guaranteed a real fall in house prices and the de-regulation of building on greenbelt land would be the party that received bugger all votes at the next election. Yet that is what's required.

I can't quite decide whether the problem they think they are 'solving' - that of households with sufficient income but insufficient savings - is due to the failure of the rental market (i.e. rents are too high) or the purchase market (i.e. the level of deposit required isn't consistent with the income multiples being offered). I think it's probably both.

Couldn't agree more, but given we are less than 2 years from a GE the only problem that needs addressing now is a political one.

In purely political terms this scheme is exactly the right trajectory for the Tories to take, you take care to maintain the perceived wealth of those voters who have benefited from house price rises and create a more optimistic environment for those who are up to the limit on their mortgages. If you were a voter on an interest only mortgage and up to your neck on the repayments this scheme is a Godsend.

It also serves to offer hope to the young aspiring tory voters who (as true capitalists would) see owning property as central to their future financial destiny (as it probably was for their parents).

Its not a plausible economic solution long term, however it was not designed with that objective in mind. If the electorate genuinely wants sound economic policy they should better not involve politicians or democracy.

 

[unklbrian]

Interesting quote in the I paper today

" The problem is that the Chancellor is creating the illusion of recovery by giving the addict more drugs "

seems to put it better than I ever could

 

[The Antikythera Mechanism]

Interesting quote in the I paper today

" The problem is that the Chancellor is creating the illusion of recovery by giving the addict more drugs "

seems to put it better than I ever could

He's fooled the IMF as well

 

[Albumen]

http://legalaidandme.proboards.com/...meron-hypocrisy-help-buy?post-20923=undefined

Cameron a liar? Never!
This is hilarious.