MSE News: Action urged to help homebuyers

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"First time buyers should be encouraged back into the housing market, a new report says today ..."

Read the full story:

Action urged to help homebuyers

worldtraveller

Good grief! What planet do these people live on? If first time buyers are struggling to scrape a deposit together, how much are they going to have in a pension fund? :doh:What's wrong with allowing the market to create it's own level based on supply & demand without fiddling around at the edges with something that is more likely to keep the bubble inflating further and put people into even more personal debt?

kingstreet

If the house was sold for less than the outstanding mortgage total, the lender could claim on the mortgage indemnity to recover its loss.

Omitting the fact that under the quaint old legal principle of subrogation, the insurer has the right to recover from the insured any monies paid out to the lender.

- you lose your home
- your property is sold off on the cheap
- you get a massive bill from the insurance company.

The best thing to happen to the mortgage market was the end of mortgage indemnity insurance.

:mad:

chillxxx

kingstreet wrote: »

Omitting the fact that under the quaint old legal principle of subrogation, the insurer has the right to recover from the insured any monies paid out to the lender.

- you lose your home
- your property is sold off on the cheap
- you get a massive bill from the insurance company.

The best thing to happen to the mortgage market was the end of mortgage indemnity insurance.

:mad:

You forgetting one pertinent fact under the laws of subrogation

If the Lender and Borrowers are named insured under the indemity. Under laws of Subrogation you cannot subrogate agianst a named insured on the same policy. There hughe amont of case law on this issue.

kingstreet

Sorry. Misuse of the word "insured?"

The lender is the insured, of course.

kingstreet

chillxxx wrote: »

You forgetting one pertinent fact under the laws of subrogation

If the Lender and Borrowers are named insured under the indemity. Under laws of Subrogation you cannot subrogate agianst a named insured on the same policy. There hughe amont of case law on this issue.

Brief trip off-topic. Sorry!

As a matter of interest, we were discussing this on Pepipoo the other day, related to the insurer's right to reclaim monies paid out following a collision where drink driving is concerned.

http://forums.pepipoo.com/index.php?showtopic=66113

How does the insurer do this and what stops it expanding the list of events for which it can reclaim payments (ie) made to third parties from the insured?

ashleyriot

worldtraveller wrote: »

Good grief! What planet do these people live on? If first time buyers are struggling to scrape a deposit together, how much are they going to have in a pension fund? :doh:What's wrong with allowing the market to create it's own level based on supply & demand without fiddling around at the edges with something that is more likely to keep the bubble inflating further and put people into even more personal debt?

As someone who wishes to put himself on the property market, I would dearly love to use the ~£29,000 worth of pension that I have built over the past 10 years as a security on a property. How much more invested could I be on keeping up my repayments on a mortgage than to potentially lose 10 years' worth of investments?

So long as it stays protected in its tax status unless it is required then I have no problem with this.

brit1234

Yet more stupid ideas to keep the housing bubble inflated (ie more sub prime lending). Haven't we realized that schemes like this as well as shared ownership/equity only benefit the big developers and allow them to keep their house prices artificially high. This only helps first time buyers who are ntent on getting into extra debt and negative equity.

If house prices are falling when interest rates are barely 0.5% what would happen if rates returned to a more normal 5-8%. If such schemes were taken up t would lead to yet another potential banking bomb shock with yet again the poor tax payer having to bail them out yet again.

What is wrong with first time buyers saving a deposit over a few years. Its taken me 8 years to save up a good deposit and costs. Surely after all ths economic madness we should return to a more sensible time of saving and buying rather than a continous life of living beyond your means on credit.

:mad:

Turnbull2000

Brit1234

House prices are barely moving, and these small real terms falls are nothing to shout about as salaries are barely moving.

You should know by know that these sort of schemes, subsidies and interventions are what you'll get from both Labour and Tory. Falling nominal house prices and a large increase in supply are an outcome the government, lenders and developers are keen to avoid.

Interest rates will remain low for a very long time. We'll be lucky to break 1% within the next five years IMO. Meanwhile, borrowers will benefit from ultra cheap mortgage payments or rapid reduction in mortgage size. Cash savers on the other hand will continue to take their punishment. Private pensions too will suffer very badly.

brit1234

Yet more stupid ideas to keep the housing bubble inflated (ie more sub prime lending). Haven't we realized that schemes like this as well as shared ownership/equity only benefit the big developers and allow them to keep their house prices artificially high. This only helps first time buyers who are intent on getting into extra debt and negative equity.

If house prices are falling when interest rates are barely 0.5% what would happen if rates returned to a more normal 5-8%. If such schemes were taken up t would lead to yet another potential banking bomb shock with yet again the poor tax payer having to bail them out yet again.

What is wrong with first time buyers saving a deposit over a few years. Its taken me 8 years to save up a good deposit and costs. Surely after all this economic madness we should return to a more sensible time of saving and buying rather than a continuous life of living beyond your means on credit.

:mad:

myhouse_2

worldtraveller wrote: »

Good grief! What planet do these people live on? If first time buyers are struggling to scrape a deposit together, how much are they going to have in a pension fund? :doh:What's wrong with allowing the market to create it's own level based on supply & demand without fiddling around at the edges with something that is more likely to keep the bubble inflating further and put people into even more personal debt?

Totally agree. The problem is that the government has to look like it is doing something. Unfortunately you can guarantee that their solution will involve first time buyers being able to borrow more rather than making houses affordable. The aim as usual is to prevent prices returning to affordable levels. Despite the money that will be wasted on these schemes, I doubt the government will be able to plough enough money in to keep the ship afloat.