At last! Thank you Tories

Dan:_4

Plans to allow first-time buyers of new homes to borrow up to 95% of the value, with the government underwriting part of the risk, are to be unveiled.

http://www.bbc.co.uk/news/uk-politics-15810966

Plus for those of you in a council house - your buy or right discount is likely to be DOUBLED!

Heyman_2

I thought the Tories were going to tank the housing market and send interest rates through the roof?

Dan:_4

Heyman wrote: »

I thought the Tories were going to tank the housing market and send interest rates through the roof?

Funny that, that's what I thought to. I was lead to believe interest rates will sore to 15% following the election - no wonder this board is hidden away from the general public!

System

Dan: wrote: »

the general pubic!

:money: Don't want them catching crabs.

shortchanged_2

Didn't expect anything different from a government that has too much personal vested interest in a ramped up property market.

This list says it all. http://www.dailymail.co.uk/news/election/article-1280554/The-coalition-millionaires-23-29-member-new-cabinet-worth-1m--Lib-Dems-just-wealthy-Tories.html

Caveat_Mortgagor

Dan: wrote: »

Plans to allow first-time buyers of new homes to borrow up to 95% of the value, with the government underwriting part of the risk, are to be unveiled.

Didnt they stand for election on the premise that we need less public and private debt?

So when did letting the taxpayer take counterparty risk in helping the housebuilding industry maximise their profits become part of the plan?

MrRee_2

Well, really, I must congratulate the Tories on this move.

From a personal point of view, a 2 year spell of collapsed property prices would suit me down to the ground ..... but, for the kids renting, this is great news - and, I have to let them have their moment in history, I've made my wealth - I, and all who post here, should applaud this and wish them all the very best.

It can only help those who are trapped into renting and buying a rich landlords property for them - for those who chose to rent (when they could buy) I have zero tolerance for ... they have no concept of market conditions and have been left behind.

julieq

Conspiracy theories rampant as usual. One possible reason for this rather good idea is to encourage the building of new houses on the basis that rents are going up due to a supply/demand shortfall.

Governments don't specifically work to keep house prices up. There's no reason to and they couldn't anyway except by constraining demand, markets are far more powerful than governments. What they do is to attempt to keep people in jobs by stimulating general growth, which currently is needing now interest rates. That will change over time.

Prices will only moderate, despite what the bears want to believe, if lending for new housing increases, because that will ease the supply/demand situation. It really is that simple.

pinkteapot

I think that it is utterly irresponsible to encourage anyone (FTB or otherwise) to buy a new-build with only 5% equity.

New-builds depreciate in the first few years of ownership due to the premium paid for buying brand new. If people buy them with 5% equity, they're almost guaranteed to be in negative equity for a period of time. Not a problem if they end up living in the house for the long term, but a big problem if they want to move or (worse) get into financial difficulty and need to sell.

MrRee_2

A 5% deposit is absolutely fine.

It was the 120% Mortgages which have resulted in misery.

Let's get the kids out of home and into their own places, it cannot be good living at home in your 20's with Mummy and Daddy pottering about.

Even worse for those in their 30's of course, as that is desperate, really desperate.

julieq

Let's get this clear - 120% mortgages do not create misery and are being repaid. Total urban myth that they're causing problems - they're nothing more than a secured loan and an unsecured loan at a lowish rate. Good for lender and borrower.

Lending on UK mortgages didn't cause anything more than marginal issues. Anyone who says they do is ignoring the evidence.