NewBuy Guarantee Scheme

Neverland

julieq wrote: »

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.

Err...there is a conspiracy to prop up the housing market:
- QE to suppress interest rates
- SMI from the government where people can't pay their mortgages
- around 10-15% of mortgages are currently in forebearance with the lenders agreeing reduced repayments

To be fair it isn't a really conspiracy because the Bank of England and the government is pretty up front that the reason for QE and SMI is to prop up borrowers

This "new buy" thingy is just another, actually quite pathetic scheme, whereby for a few million donated to the conservative party some large housebuilders get tens of millions off tax payers

Nice use of my taxes :mad:

shortchanged_2

julieq wrote: »

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.

I'll tell you what julieq. If they marketed these new build properties at reasonable prices, instead of top book prices I guarantee you they will sell. The same as all the properties I see that are sensibly priced, they sell.
I remember 10 years ago you could buy a new build 4 bed house for around £125,000. The same type of new build house now costs around £250,000 to buy. Now I'm assuming builders were making profits back 10 years ago, so are houses actually that much more to build these days?

poppy10_2

smamst wrote: »

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/commentisf...housing-market

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

See also from The Telegraph: Hopes of lower house prices may be dashed by new government scheme

Hopes of lower house prices, as market forces require vendors to become more realistic, may be dashed by a new Government bid to make house prices more affordable
Amid a credit crisis caused by excessive debt, much of it secured to overpriced property, the Government proposes to encourage laxer lending to people with no history of repaying debt so that they can buy overpriced property.

You really could not make it up. Government proposals for taxpayers to underwrite looser mortgage lending for first time buyers may help buy-to-let landlords exit the housing market with handsome profits before house prices fall further. But they are unlikely to be of lasting benefit to anyone encouraged to take on excessive debt before interest rates rise from their current historic low and more homebuyers find themselves in negative equity.

Interesting that there has been such a hostile reaction from the print media that usually falls over itself to beat the HPI drum.

Graham_Devon

julieq wrote: »

You will eventually figure all of this out.

Oh I am glad.

Do you think there is any hope for the huge numbers of people who disagree with you on news articles? Or do they not understand either?

Emy1501

julieq wrote: »

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.

Problem is these properties are not worth the prices being asked as if they were then lenders would be lending 90 and 95% mortgages as they are with non new builds. These schemes are simplyntaking advantage of those who cant afford to buy.

Most of these new build flats built under various schemes in my area are built on the edge of housing estates, between railway lanes and even overlooking markets. These properties have to have a minimum of 25% social housing and the reality is re selling then is extremely hard. I know people who these types of flats near peak and our stuck in them as they will not be able to sell them.

Neverland

Emy1501 wrote: »

Problem is these properties are not worth the prices being asked as if they were then lenders would be lending 90 and 95% mortgages as they are with non new builds. These schemes are simplyntaking advantage of those who cant afford to buy.

Most of these new build flats built under various schemes in my area are built on the edge of housing estates, between railway lanes and even overlooking markets. These properties have to have a minimum of 25% social housing and the reality is re selling then is extremely hard. I know people who these types of flats near peak and our stuck in them as they will not be able to sell them.

Amazing what a seven figure donation to the Conservative party can achieve...

A._Badger

Neverland wrote: »

Amazing what a seven figure donation to the Conservative party can achieve...

Yes. Almost as amazing as the value for money the Unions get from owning Labour.

yertiz_2

Graham_Devon wrote: »

Grant Shapps is just a spokesperson. He's been on every side there is, stating everything that every side want's to hear. He's stated previously that house prices are too high. Then he's stated it's deposits that are the problem. Then it's interest rates are going to hurt people. Then they won't. Then it's builders are not building enough. Then it's builders are building enough but the demand isn't there. Then it's the demand is there, but it's not affordable. Then it's actually affordable, just the deposits are the problem. Then the deposits are prudent due to the banking issues and we can't go back to the lending standards of the noughties.

It all depends on who he is talking to or on behalf of.

I remember not oo long back when he as up against shelter, and he agreed with everything they said, and would look into it. He then, later on, was up against the national federation of housebuilders, who opposed every item shelter had stated, and he agreed with everything they said.

But he's a politician :shhh:

yertiz_2

neilem wrote: »

I'm wondering why MPs are so interested in keeping house prices at inflated levels. Are they scared of a collapse, which will then have a strain on the banks and economy? Is it just to help out their buddies at the construction sector? PR spin for election time? Obviously they aren't as stupid as they seem, so there must be some incentive to them...

Either way, if they don't let the market correct itself naturally then they aren't helping whatsoever. When people can't afford housing now, it doesn't make sense to force prices to remain the same using some gimmick scheme. The longer they cling on, the more hurt it will bring when interest rates increases.

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.

They all have large property portfolios I imagine. Oh, that and according to The Guardian, as posted previously by another, the Conservatives have received substantial sums of money/donations whatever you want to call it, from housebuilders and the like, to swell their coffers.

Timm

julieq wrote: »

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.

Good post.

There is a conspiracy, but the world makes more sense if you just look at the whole market (which is made up of individuals of varying power), rather than splitting the world into elite and victim. Maggie was right, but she said it all wrong - she should have said "society is individual men and women"*

poppy10 wrote: »

(...)

Interesting that there has been such a hostile reaction from the print media that usually falls over itself to beat the HPI drum.

Funny that - I wonder why. :think:

Emy1501 wrote: »

Problem is these properties are not worth the prices being asked as if they were then lenders would be lending 90 and 95% mortgages as they are with non new builds. These schemes are simplyntaking advantage of those who cant afford to buy.

Most of these new build flats built under various schemes in my area are built on the edge of housing estates, between railway lanes and even overlooking markets. These properties have to have a minimum of 25% social housing and the reality is re selling then is extremely hard. I know people who these types of flats near peak and our stuck in them as they will not be able to sell them.

For every gain there is a loser.

In this case, the losers will be the FTBs that buy a newbuild instead of buying a starter home from a young family that buys a larger newbuild. Ahh well, we all have choices to make...




*There's more to that - I'll post the rest after the paper shortage is over.