Government FirstBuy Scheme - what where and how!

mcmwhite

PROUD_TO_OWN_PROPERTY wrote: »

Hot off the HPC propaganda presses circa 2001. Meanwhile 10 years later...

What are you talking about??

Do you have anything meaningful to add to the discussion?

Cassandra_W

Shinkansen wrote: »

7. Resale is not an issue. There is lots of pent-up demand from first time buyers in the market and this is likely to persist into the future. The properties made available to you are obvious first-time buyers properties in nicely developed areas and as such will always be in demand.

If you buy a new a house on this scheme you have an interest only loan (interest free for first 5 years) of 20% on the property but when you sell you have to pay back 20% of the house value. Resale is a massive problem if you cannot afford to pay the 20% back. What if you lose your job and need to move somewhere to take up another job? You are stuck. This scheme is very very bad for social mobility and you had better hope your neighbours are OK.

As to your house prices can only go up due to inflation this is generally correct. However we have just had the largest house price boom in history like the USA, Ireland, Spain etc. Tell the people in those countries that house prices only ever go up!!

The benefit of the scheme is the interest saved on the loan for the first 5 years. Say the house is £200k you save interest for 5 years on £40k at say 5% that is £2k a year so you save £10k. Then year six is at 1.75% so say 5% - 1.75% = 3.25% is another £1,300. Total savings are £11,300 After that you pay RPI as the interest rate. RPI is currently 5.5% and higher than mortgage rates. What if RPI stays higher than mortgages rates for a lot of those 19 years? It could easily wipe out your "savings". But the bank will be happy….

If you didn't participate in this scheme which may support the prices of new build homes – how much do prices need to drop? Just 3.3%. The saving was £11,300 but on a £190k mortgage at 5% the total repayment is £333k, £190k capital and £143k interest (see why those bankers love their high house prices!). That means for each £1 of house value you pay £1.75 so divide the £11,300 by 1.75 and you get £6,457. Divide that by £200k and 3.2% is the required price drop to more than balance the "saving".

So the question is do you support this scam to give housebuilders taxpayer's money (the government doesn't have any money of it's own, they only have OUR money) and allow banks to generate profits/bonuses with less lending risk (the first 25% is risk free for them) or avoid it try buy a house when you can actually afford it? The scheme is like a dodgy three piece suite advert where you buy now and pay later. Too much debt on the never never is what has got the UK into the mess it is in now.

I would also draw parallels with the car scrappage scheme where car prices seemed to be inflated to cover the manufacturers share and the government's share (so they got our money!). Do people really think that house builders will be giving out 10% interest only loans for 25 years without recouping the cost up front?

The other main point about this scheme is what about the FSA? They are supposed to regulate the banks to ensure that our mortgage lending is sensible with no more return to reckless lending. In effect this scheme does the exact opposite of that. The banks are not prepared to give the FTB a 95% mortgage because it is too risky. Do you know what that means? It means it is too risky! Can someone please give the FSA a nudge? They appear to have nodded off again…. or are they wide awake and can see that the real beneficiaries of this scheme are their banking chums?

Incidentally I cannot understand why some people think this scheme will push house prices up in general. I can see it benefits new house builders which is why their shares have jumped up as they are getting their hands on our taxes. However if this scheme encourages 10,000 FTBs to it then that is 10,000 chains that cannot start as these people are buying new builds only. These FTBs are then out of the housing market for years and years – until they can afford to sell the house and pay back the 20% extra debt that is weighing them down. Imagine how you must feel if you are trying to sell a non new build house now – price drop on the way to compete with your government? And a price drop for the people in the chain above who now have less buyers below them? Chains could already be collapsing as FTBs pull out of existing purchases thinking this scheme is good for them.

leveller2911

mcmwhite wrote: »

What are you talking about??

Do you have anything meaningful to add to the discussion?

Just ignore the Trolls they "Get off" on winding people up.After a while you tend not to even notice there around....:D

ViolaLass

PROUD_TO_OWN_PROPERTY wrote: »

You and your ilk in your pathetic attempts to initiate a house price crash have been trying to scare good honest FTBs away from buying their first dream home by regurgitating the bile you wrote, day in day out, for 10 years now. The fact is the OP wants specific details on the scheme, not some jumped up judgment from the armchair faux-economists from HPC.co.uk preaching to him if the scheme is a good idea or not. No either add details to the OPs request or toddle off back to your vile hole of a website.

Why are you taking people's views so personally? They aren't doing it to annoy you.

geoffky

PROUD_TO_OWN_PROPERTY wrote: »

You and your ilk in your pathetic attempts to initiate a house price crash have been trying to scare good honest FTBs away from buying their first dream home by regurgitating the bile you wrote, day in day out, for 10 years now. The fact is the OP wants specific details on the scheme, not some jumped up judgment from the armchair faux-economists from HPC.co.uk preaching to him if the scheme is a good idea or not. No either add details to the OPs request or toddle off back to your vile hole of a website.

read this...
http://www.insidehousing.co.uk/ihstory.aspx?storycode=6501770 :rotfl::rotfl::rotfl::rotfl:

Jimmy_31

PROUD_TO_OWN_PROPERTY wrote: »

In years to come you will remember that stupid comment and look up to your two friends with great jealousy as they get on with their lives, get married, and having children, all the while you are still scrapping your next months bedsit rent together.

In years to come when both friends are struggling to find a way to move from their first house to their second due to the vast amount of negative equity they are in, (they have to move you see because you said they got married and had kids and we all know you cant fit an average sized family in a FTB new build), i will sit in my affordable bedsit happy in the fact that the government didnt fool me into paying 150k plus for a tiny tiny house.

gbsilp

PROUD_TO_OWN_PROPERTY wrote: »

IMPORTANT WARNING TO ALL FTBs - This thread has been linked to the fanatical extremist website hpc that are trying to crash the entire UK economy and put genuine buyers off purchasing their first dream home. Take all the bitter doomsaying postings with an extremely large pinch of salt. These idiots are priced out of owning their own home and want everyone else to be throw to the mercy of corrupt landlords. Shared ownership schemes however you want to wrap them up are a FANTASTIC way to secure your first eager step onto the ladder and homeownership class.

Fanatical extremist? Crash the entire economy? Mercy of corrupt landlords? Homeownership class?

Sounds intriguing. Please enlighten us.

ALso, buying with 5% deposit (which is what the Firstbuy scheme is) is a FANTASTIC way to secure your first eager step into negative equity.

pararct

geoffky wrote: »

read this...
http://www.insidehousing.co.uk/ihstory.aspx?storycode=6501770 :rotfl::rotfl::rotfl::rotfl:

Good link....

A Joseph Rowntree Foundation investigation shows that only a very small proportion of residents are actually able to move into full
ownership.

While some shared owners are able to move on due to improvements in their finances, many are unable to afford the greater cost of a full ownership mortgage, the study found.

OP do your own research on the Joseph Rowntree Foundation. Their reports are ground breaking and often used in Government feasibility studies.
If they say the scheme is a lemon then pretty good chance it is....

Their view is worth 10,000+ comments on this thread and some more.

johnny_storm

Be careful about reading too much into what they say on HPC, you might as well form your opinion on immigration by reading the bnp site. They are that extreme, blinkered and close minded.

Do you want to imitate people who missed the boat, have waited 10 years for house prices to drop, convinced they are correct? Or just get on with your life.

reykjavik78

johnny_storm wrote: »

Be careful about reading too much into what they say on HPC, you might as well form your opinion on immigration by reading the bnp site. They are that extreme, blinkered and close minded.

Do you want to imitate people who missed the boat, have waited 10 years for house prices to drop, convinced they are correct? Or just get on with your life.

People can do what they want with their money...it's completely up to them...it's not my life...but people may also have to accept that a wrong choice may cause financial hardship...They need to think hard before they act because they will have to live with the decision not me...