'Rent now buy later' housing plan - Govt plan

dannyboycey

carolt wrote: »

Please don't waste my hard-earned taxes on propping up the housing market. LET IT FALL.

I will drink to that.

carolt

Free_Conveyancing_Advice wrote: »

Interesting. In principle this sounds like a good idea. The problem, after all, with the housing market is that, 100% mortgages having been withdrawn, it is virtually impossible for first time buyers (who more often than not will not have deposit but they've all got used to the idea of not needing to save up for anything anymore) to be able to buy. Without a first time buyer of course, there is no chain. There are some practicalities to be addressed though - firstly presumably the government will not be purchasing these houses so if they are to be involved does this mean that they will be offering some sort of guarantee to builders in the event that the tenants, after the two years, decide not to buy after all? If so there is potential for this to cost the public purse a great deal of money. Noone in their right minds would enter into a contract today to purchase a property in two years time and so the tenant would have to be free to decline the option to purchase. Secondly, will there be any obligation on a tenant to actually save the deposit of not just take advantage of cheap rent for two years at the expense of the taxpayer? One possibility would be for the tenant to pay 100% of the rental value for 2 years, 20% of which could be retained and used as the deposit, or kept by the government if they did not go through with the purchase. I will be interested to see what the plans are if this idea develops.

Your reasoned analysis just shows how rubbish and ill-thought through this idea is.

I think the trouble is you spent longer typing your post than the Govt. did coming up with the idea in the first place. :eek:

IveSeenTheLight

carolt wrote: »

Your reasoned analysis just shows how rubbish and ill-thought through this idea is.

I think the trouble is you spent longer typing your post than the Govt. did coming up with the idea in the first place. :eek:

It would seem to me that the government is proposing something which is currently available via Housing associations, but I guess open to a wider market.

I'm not agreeing or disagreeing with the proposal, but I think Free Conveyancing Advice added some good points if this was to procede any further

loveandlight

The problem with the governments scheme is that you don't get to keep 100% of the equity.


It is possible nowadays for first time buyers to move into a house without a mortgage straight away and buy that same house in say 3 years time and rent it in the meantime. You can also lock in the purchase price and if you change your mind and don't want to buy it after all in 3 years time, you don't have to. You also get to keep 100% of the equity and any increase in value you may have added to it whilst renting it.


If I was a first time buyer, that is the way I would buy a house nowadays as you wouldn't need a mortgage for at least another 3 years but you get all the benefits of home ownership.