Latest first time buyer initiative, can it suceed?

Graham_Devon

wymondham wrote: »

Precisely that. Let the market decide how much houses should cost rather than constant intervention which usually back fires and increases prices, and worse still financially cripples people as the Government encourage people who's finances/circumstances are completely unsuitable for home-ownership to go for it - they are coming across like that that bad character 'nic-o-teen' cartoon character from 'quit smoking' TV ads many years ago!!

If the Government genuinely wanted this to be a 'lets house the masses' they would not have limited this to new builds only..... suspicious me thinks!

Agree completely. They should do nothing. Maybe look at the other end of the scale if it's related to house building, and use the stick approach rather than the banks and builders constantly showing their demands.

At the end of the day, the builders will have to build. Doing nothing will leave the builders with the option of declining income, declining share prices and declining investors.....or they simply re-look at their business and build houses that people can afford.

It's their business. I imagine the thoughts would be very much different if Tesco were demanding that their shoppers got taxpayer incentives to buy certain products in their shops as Tesco's feel it's not quite right that they should lower prices.

reweird

Graham_Devon wrote: »

In a decade, we have had:
- The first time buyers initiative
- OwnHome
- Social Homebuy
- Open Market Homebuy
- First Buy
- Kick Start

We've now got the new government underwritten guarantee. We've also had the removal of stamp duty from FTB's up to a value of £250,000. We've also had various shared ownership schemes. Despite all this, first time buyers have continued to fall. From 600,000 in 1999, to 200,000 last year. Probably less this year.

The home builders federation applauded the latest initiative, suggesting it would give a huge boost to building. The CML appluaded the 95% mortgages as a welcome boost to housing confidence.

However, big lenders were soon pouring water over the initiative.

Median house prices are now 7 times median earnings, compared to 3.5x in the mid 1990's. So, forgetting the downfalls of the scheme, forgetting this is sending FTB's into negative equity straight away...

Will it have any impact? Or will it be another failed scheme to add to the list above?

Full article, which I have dissected here: http://www.guardian.co.uk/money/2011/nov/21/first-time-house-buyers-succeed

As I've said before home-ownership is not for everyone. It's either in ones blood or not. It does not matter one jot how many generous schemes we have to encourage first time buyers to take that initial nervous, yet crucial step onto the bottom rung. If someone doesn't have the balls to buy then they never will.

You can take a house to water but you can't make it drink.

EchoLocation

reweird wrote: »

As I've said before home-ownership is not for everyone. It's either in ones blood or not. It does not matter one jot how many generous schemes we have to encourage first time buyers to take that initial nervous, yet crucial step onto the bottom rung. If someone doesn't have the balls to buy then they never will.

You can take a house to water but you can't make it drink.

My god you talk some sh*te don't you. Why do you consistently refuse to recognise the bloody obvious?

wotsthat

Graham_Devon wrote: »

At the end of the day, the builders will have to build. Doing nothing will leave the builders with the option of declining income, declining share prices and declining investors.....or they simply re-look at their business and build houses that people can afford.

It's their business. I imagine the thoughts would be very much different if Tesco were demanding that their shoppers got taxpayer incentives to buy certain products in their shops as Tesco's feel it's not quite right that they should lower prices.

The nail on the head is that it's their business not the governments.

Lenders cannot be made to lend and builders cannot be made to build. The utopian dream of the 'props' being taken out and house prices falling of their own accord will have a completely predictable, to some, effect. Buyers won't buy because they'll be expecting further price falls and lenders will require ever increasing deposits before lending.

The government options are limited. If there's an urgent need for new housing then limited funds and efforts should be focused on ideas that encourage buyers to buy new houses and builders to build them.

Tesco do get taxpayer incentives buy the way. If benefits were cut by 20%, say, they'd be bleating about how unfair it was on their customers.

Looking for simple answers to complicated questions will lead to the law of unintended consequences to rule.

Aberdeenangarse

EchoLocation wrote: »

Why do you consistently refuse to recognise the bloody obvious?

Because he's obviously bloody stupid!

michaels

If we let the market decide there would be houses all over the green belt and house prices would be around the level of farm land price+build cost. Of course this doesn't prevent booms and busts (see US, Eire) as with supply taking time to come on stream there is still scope for a bubble to form but overall house prices would be lower and probably more stable.

There seems to be endless debate on the housing market, the govt role, the banks role, credit availability, price expectations etc but the main reason the uk has not seen a house price crash is because household formation exceeds house building, simple as.

Look at it this way, I want I decent home for my family - how much of my income will I pay for that? As much as it takes! So once I have paid for food and utilities I will give up having a new car, holidays, an iphone, sky etc etc in order to provide a home. If there are fewer homes than people looking for them the price will be bid up until some can not afford it. It may be that post credit crunch the banks refuse to allow me to spend as much of my income on a mortgage as I would like to but there is no restriction on how much of my income I spend on rent so rather than going down the ownership route I might be forced to rent, but I am still committing just as much of my income to housing costs.

I don't know how to explain this more clearly but I do think people on this board need to understand this.

wymondham wrote: »

Precisely that. Let the market decide how much houses should cost rather than constant intervention which usually back fires and increases prices, and worse still financially cripples people as the Government encourage people who's finances/circumstances are completely unsuitable for home-ownership to go for it - they are coming across like that that bad character 'nic-o-teen' cartoon character from 'quit smoking' TV ads many years ago!!

If the Government genuinely wanted this to be a 'lets house the masses' they would not have limited this to new builds only..... suspicious me thinks!

wotsthat wrote: »

How is that there are not enough houses being built and that this has been happening for years? The free market should be just that but government is responsible for ensuring markets do work.

It seems to make sense that government should be giving incentives to encourage new house building rather than things like offering discounts on right to buy etc.

This is a (small) step towards this. Why not get rid of stamp duty for all new builds - anything which takes cost out of buying and/ or encourages new building is worth a try.

abaxas

Available land via compulsory purchase - check
Available and cheap workforce - check

So why are we playing about with schemes like this when the problem can be sorted cheaply.. *

* answer is self interest.