NewBuy Guarantee Scheme

Hoopie1

I can't imagine why the government (particularly one that is so deeply in love with the free market) wants to get involved here. If they want to get involved, why not try and stimulate some of the run-down areas that have excess housing stock?

Mr._Pricklepants

neilem wrote: »

I'm wondering why MPs are so interested in keeping house prices at inflated levels... yappety yappety...

Just wondering what their game is. At the moment, it is depressing to watch the people in charge that are supposed to help, but making things worse.

Let me explain that one to you.
Probably 100% of MP's are homeowners.
Many of them are in the BTL business.
The electorate consists of approx. 70% home owners.
Why oh why do you expect MP's to do anything to encourage a house price crash? To please Jimmy Caravan and his mates? :rotfl:

Jimmy_31

Mr._Pricklepants wrote: »

Let me explain that one to you.
Probably 100% of MP's are homeowners.
Many of them are in the BTL business.
The electorate consists of approx. 70% home owners.
Why oh why do you expect MP's to do anything to encourage a house price crash? To please Jimmy Caravan and his mates? :rotfl:

They wont have to encourage it.

poppy10_2

wotsthat wrote: »

Even Shelter would be embarrassed by a survey based on 27 comments on the BBC website.

There's 372 comments now. I''ve not gone through all of them, but the top 20 highest rated comments are universally critical of this scheme.

http://www.bbc.co.uk/news/uk-politics-17335711

julieq

More than usually woolly bear thinking here.

The scheme is for new builds. Therefore it removes demand on existing stock from 100,000 purchasers and transfers it to new houses. While doing this it provides support for the building industry, which will be able to invest in further housing creation.

It won't put prices up or prop up the market - how can it? It'll cause more houses to be built, and purchasers have to factor in difficulty in remortgaging or moving, so it's not a panacea even for them. It just allows a few people in specific circumstances who are prepared to stay put for a few years to buy rather than rent without being scuppered by bank capitalisation rules.

wymondham

julieq wrote: »

It won't put prices up or prop up the market - how can it?

• It removes the need to naturally reduce prices due to lack of demand as (sensible) people hold fire (squews the marketplace)
• It encourages people to buy beyond their means
• Housebuilders will be able to shift their overpriced property so will be encouraged to keep prices up
• It encourages first time buyers to take on the highest risk property in terms of negative equity (new builds) - stores a timebomb as these people will more likely be young and need to move when they begin families and wont be able to
• We contributes to a purchasers private investment (house purchase) by having this backed by the tax payer, yet take nothing back when it is sold.
• It discourages people purchasing older, better quality housing stock, so does not help with chain sales.
• The only aim of the this is to fund housebuilders, nothing more.

.... apart from the above it's an excellent idea!

vulcan1964

Please consider the position of a FTB who thinks this is a good idea.

The intial mortgage contract will probable be at a reasonable interest rate....2 year fixed...hook

In 2 years when you next remortgage you will certainly be in negative equity, and cannot remortgage to a different provider...line

The initial contract will have a SVR linked to some obscure reference to the "change the basis of the interest calculation so long as they give you a period of notice" ...sinker

These mortgages should come with a big red warning sticker on them.

Neverland

Mr._Pricklepants wrote: »

Let me explain that one to you.
Probably 100% of MP's are homeowners.
Many of them are in the BTL business.
The electorate consists of approx. 70% home owners.
Why oh why do you expect MP's to do anything to encourage a house price crash? To please Jimmy Caravan and his mates? :rotfl:

+1

You forgot the opportunity to buy a few votes with jumbo loans and selling off council houses on the cheap :mad:

julieq

The only way to moderate house prices is to build more houses. It really is as simple as that. No-one is going to build houses they can't sell, therefore the longer housebuilders sit out, the more upward pressure builds up on accomodation costs.

Bears are fixated with the idea of some sort of conspiracy to prop up the market, yet the actual prop to the market is from what they wished to happen - reduced lending to first time buyers. As there is still massive demand for housing, that just shifts ownership to landlords and rents rise. In geographies where there is more supply than demand, including some parts of the UK - the so called props do nothing at all.

You will eventually figure all of this out. In the meantime, relaxing capitalisation rules as they apply to a smallish number of new builds - which is what this amounts to - is a thoroughly good thing for everyone. It reduces competition for existing stock. It encourages new building which increases supply. It enables some people to buy houses - their choice, not yours, and frankly there is no evidence at all that anyone is buying beyond their means in this country, quite the contrary in fact. And it encourages that good old bear staple, UK based manufacture, since many of the raw materials for building are more cheaply sourced here than imported.

"it discourages people purchasing older better quality housing stock". Indeed, so what does that do for prices of older better quality housing stock? You can't even follow the internal logic of your own arguments.

smamst

The newbuy scheme won't save the housing market

A fall in house prices, not support to purchase overpriced new homes, is the only sustainable way to help first-time buyers

Full article in The Guardian

http://www.guardian.co.uk/commentisfree/2012/mar/12/newbuy-scheme-housing-market