One Million FTB-s prevented from buying

Jimmy_31

DervProf wrote: »

I think we need to be careful here. I might be wrong, but I think you might be thinking - "if FTBs can get access to funds, that'll push prices up, which will benefit me". However, let's put our moral differences aside, and try get some agreement here.

I see what you are saying Hamish, and I will say that on first glance, it makes sense. Instead of simply pumping in the £££ and hoping for the best, how about this........

A scheme, coordinated by the government (but a good one this time, I think).

Banks offer a scheme to builders/FTBs which ties the 3 together. The bank lends money to the builder to build a house, but only if there is a suitable FTBer who will sign up to buy that house. When all 3 parties are in agreement, the bank lends to the builder. The builder builds the house. The bank lends the money to the FTBer to buy the house from the builder.

That's probably an idea that will be torn to pieces, but it seems kind of sensible to me. If you just lend to builders, they will be concerned about where the buyers will come from, or just build the wrong kind of properties. If you just lend to FTBers, you are putting more pressure on limited supply. If you lend to both, that might do the trick, but you can't guarantee that the builders will use the money to build suitable properties for FTBs. My idea might be the best option.

I have a similar way of thinking that also doesnt involve the major house building companys, i Think the FTBs would see more value for money if they could choose their own builders or go via the self build route, i think this would save the FTBs thousands of pounds so would consequently have to borrow less money from the banks so that would mean there is more money left to go to other FTBs for their mortgages.

HAMISH_MCTAVISH

DervProf wrote: »

I see what you are saying Hamish, and I will say that on first glance, it makes sense. Instead of simply pumping in the £££ and hoping for the best, how about this........

A scheme, coordinated by the government (but a good one this time, I think).

Banks offer a scheme to builders/FTBs which ties the 3 together. The bank lends money to the builder to build a house, but only if there is a suitable FTBer who will sign up to buy that house. When all 3 parties are in agreement, the bank lends to the builder. The builder builds the house. The bank lends the money to the FTBer to buy the house from the builder.

That's probably an idea that will be torn to pieces, but it seems kind of sensible to me. If you just lend to builders, they will be concerned about where the buyers will come from, or just build the wrong kind of properties. If you just lend to FTBers, you are putting more pressure on limited supply. If you lend to both, that might do the trick, but you can't guarantee that the builders will use the money to build suitable properties for FTBs. My idea might be the best option.

I have no issue with linking in a scheme to ensure more houses get built.

We need more houses.....

And whilst I believe that simply increasing the availability of mortgages will result in more houses being built, it's probably sensible to guarantee that in some way..

But I do think you need to be careful limiting choice of FTB-s to newbuild only. Because if you do, you'll be forcing them to spend more than they have to in a lot of cases. Existing houses are usually cheaper, and often better quality, than new ones.

For example, as jimmy31 points out, self-building should be an option....

And the tried and tested entry point for many a youngster in my day was to start off in a cheap place that needed a lot of work doing and fix it up yourself.

Not sure it makes sense to remove those opportunities from todays youngsters?

DervProf

HAMISH_MCTAVISH wrote: »

I have no issue with linking in a scheme to ensure more houses get built. :beer:

We need more houses..... :beer:

And whilst I believe that simply increasing the availability of mortgages will result in more houses being built, it's probably sensible to guarantee that in some way.. :beer:

But I do think you need to be careful limiting choice of FTB-s to newbuild only. Because if you do, you'll be forcing them to spend more than they have to in a lot of cases. Existing houses are usually cheaper, and often better quality, than new ones. :beer:

For example, as jimmy31 points out, self-building should be an option.... :beer:

And the tried and tested entry point for many a youngster in my day was to start off in a cheap place that needed a lot of work doing and fix it up yourself. :beer:

Not sure it makes sense to remove those opportunities from todays youngsters? I agree, but this idea of mine could be "modified" to be a little more flexible. :beer:

I commend it to the house (building scheme).

I don't know, maybe it's the nice weather or something, but it appears that Hamish and I are finding common ground. It's not all name calling and verbal kick-boxing, is it ? :beer:

HAMISH_MCTAVISH

DervProf wrote: »

I don't know, maybe it's the nice weather or something, but it appears that Hamish and I are finding common ground.

Now all you have to do is explain it to Graham.....:D

And good luck getting any of the rest of the bears to agree that vastly more mortgage funding for FTB-s is a good idea, and indeed, a pre-requisite to solving the housing shortage.

It's not all name calling and verbal kick-boxing, is it ? :beer:

Don't worry.

Normal service will be resumed shortly.;)

DervProf

HAMISH_MCTAVISH wrote: »

Now all you have to do is explain it to Graham.....:D

And good luck getting any of the rest of the bears to agree that vastly more mortgage funding for FTB-s is a good idea, and indeed, a pre-requisite to solving the housing shortage.



Don't worry.

Normal service will be resumed shortly.;)

I'm sure it will, at least I hope so.

BTW. I'll go along with the appeal for extra funding for FTBs, but I still say this is an opportunity to really help to prevent another boom/bust cycle, if the money isn't just swallowed up into yours and mine equity. The banks got in a terrible mess when they were left to their own devices, we should not be afraid to "interfere" in the market if it will benefit our financial system and the housebuying population. Get the ball rolling by easing lending to FTBs by all means, but don't sit back and think everything is OK because more houses are being sold and prices are rising again. That will be the road to more problems before we've solved the ones we've got.

julieq

It's a very good idea indeed. Certainly better than the one I was pondering over lunch and Pimms in the garden today which was about annexing part of Ireland for UK first time buyers to live in The Irish are lovely people but they do object to being annexed.

I think you'd need to build in restrictions in the terms and conditions of the mortgage to prevent houses being turned over to rental easily by the purchaser too. You've got to be increasing the net stock available to owner occupiers.

twadge_face

Twice in one day??

---

[posted 'elsewhere']

OMFG THE EXPRESS!

Last week they were saying we were all going to DIE!



EVEN THE STRONGEST DRUGS CAN'T BEAT IT.

ILW

twadge_face wrote: »

Twice in one day??

---

[posted 'elsewhere']

OMFG THE EXPRESS!

Last week they were saying we were all going to DIE!



EVEN THE STRONGEST DRUGS CAN'T BEAT IT.

Sorry to have to break it to you, but we are all going to die.

Rochdale_Pioneers

Problem is that in demanding such large deposits AND in setting interest rates so much higher than the base rate, they have effectively shut down the housing market across large parts of the country......

DervProf

Rochdale_Pioneers wrote: »

Problem is that in demanding such large deposits AND in setting interest rates so much higher than the base rate, they have effectively shut down the housing market across large parts of the country......

That is true. The easy option would be to set rates lower and go back to small/no deposits. If you then run the course of events that follow in your mind, you will probably see problems in the not too distant future.

In my opinion, and I said it at the time, the brakes should have been gently applied back in 2004(ish).