NewBuy - a scam to transfer from poor to rich

Graham_Devon

I'm taking it the 500k is there because all they want people to do is buy these houses.

This is open to all, FTB or not. So long as these overpriced new builds are sold, it doesn't matter who they are sold to.

Percy1983

Overall I am not against it.

The same way I would never buy a new car, somebody else has to so I can have my used car.

thelawnet

Idiophreak wrote: »

Hang on...why aren't their incomes going up?

And there's no saying anyone would ever actually get paid 5x their salary...As you said, more likely someone would need to earn best part of 200k to be considered.

That said, you've convinced me. £500k is too much to be considered a FTB home. I still don't think it's the Playboy mansion you're envisaging, but I think in most cases there's probably something cheaper people could move to first. (I've no idea where I *would* draw the line, though...)

Basically the issue is that house prices are grotesquely high in some areas.

That's what it comes down to. £500k doesn't buy you that much house in many areas.

http://www.rightmove.co.uk/property-for-sale/property-35408552.html
^^^^^
That's the problem, a collective insanity that such a thing is worth half-a-million pounds. That's why £500k is the limit. Not because it's affordable for most FTBers, but because in some areas, you need that much just to get a poxy flat.

Graham_Devon

Percy1983 wrote: »

Overall I am not against it.

The same way I would never buy a new car, somebody else has to so I can have my used car.

Aye, but in this case, if the person before you doesn't pay their loan payments....you do.

yertiz_2

There was an interesting discussion on the first half of the Kaiser Report (RT) 13th March, with Stacey Herbert. Ignore the bit about yoghurt, it comes after that.

http://rt.com/programs/keiser-report/episode-262-max-keiser/

stark_source

Wookster wrote: »

Scams like the scheme mentioned above simply attempt to reflate the bubble.

For me, from my limited research on the matter, this is very much what I think the government is trying to do here, desperately trying to keep the bubble inflated when perhaps it would be better (though no less painful) letting the air out once and for all, and get house prices back to being 3-4 times the national average wage.

I looked into this scheme, and the FirstBuy Scheme, and for a single man trying to get some property, both schemes were useless. No properties that were affordable for someone on my wage.

I agree, that this is a scheme for higher earners.

Thrugelmir

Emy1501 wrote: »

lenders are happy to lend up to 95% of non newbuild properties without any fancy government intervension.

Which major lenders are?

Thrugelmir

Idiophreak wrote: »

That said, you've convinced me. £500k is too much to be considered a FTB home. I still don't think it's the Playboy mansion you're envisaging, but I think in most cases there's probably something cheaper people could move to first. (I've no idea where I *would* draw the line, though...)

Nothing to stop 4 or 5 people sharing a joint mortgage.

Loopgames

thelawnet wrote: »

Basically the issue is that house prices are grotesquely high in some areas.

That's what it comes down to. £500k doesn't buy you that much house in many areas.

http://www.rightmove.co.uk/property-for-sale/property-35408552.html
^^^^^
That's the problem, a collective insanity that such a thing is worth half-a-million pounds. That's why £500k is the limit. Not because it's affordable for most FTBers, but because in some areas, you need that much just to get a poxy flat.

Are there many new builds for ftbs for that price?...your link shows a period property in central london. It has a share of freehold too making it worthwhile in my opinion ... Lovely as it is...it's not relevant to this discussion.

julieq

Why the fixation on the top limit of 500k? Has no-one ever heard of a pareto? Almost nothing will be at this limit.

Here's the deal on the new scheme: it's limited to 100K total participants, which is a small fraction of the market. But it will pull 100K people out of the competition for existing stock, which will moderate prices in the wider market, while providing employment for the building professions.

It's frankly irrelevant whether anyone is in immediate negative equity, because the only people for whom the deal makes sense are people planning to stay put for some time. It costs almost nothing because default rates are low and will decrease into the longer term recovery (I remember saying at Christmas that confidence would increase going into spring to the usual bear derision, and guess what? Confidence is increasing going into spring).

The bears will froth wildly about anything that they see as support for the housing market (which doesn't in fact need support because supply and demand is providing enough upward pressure to sustain current prices), but this is about allowing an escape route for some people from high rents and jump starting investment in building new houses, which is the only way to moderate prices long term. The laughable thing here is that actually anyone wanting HPI would try to shout this scheme down, because it increases supply.