Budget 2013 live....

grizzly1911

wotsthat wrote: »

George Osborne said this was a budget for "those who want to work and get on" which describes me exactly. So it was with some excitement I entered my details into the BBC budget calculator and discovered I'm going to be about £650 worse off.

Can't the BBC get anything right!

Are you sure they have got it wrong?

Devil is in the detail.

ukcarper

Graham_Devon wrote: »

It's both.

The information is on pretty much every budget overview...

This one from the BBC for instance...

Other sites are calling it an equity loan no where does it say that the goverment are taking a 20% stake in your house but if it is the 1.5% fee growing at RPI + 1% makes sense that is just the original 1.5% rises by RPI + 1%.

Your £630 being about £1700 after the 20years

wotsthat

Joeskeppi wrote: »

I think "fee's" is the one that really make me facepalm.

Graham_Devon wrote: »

Made me too!

Graham_Devon wrote: »

So if your house rose in value by 50k when you sold, the government share would be 5k. Plus any fee's on the loan. Unless you had paid the loan off before selling.

I won't tell Chewmylegoff if you don't.

grizzly1911

wotsthat wrote: »

If someone doesn't want the 20% attracting interest they pay it off in 5 years or save it up instead.

.

I find it incredible that the government can go around giving sizeable interest free loans to people.

Who is footing the bill? Public sector workers?

What is to stop someone obtaining the loan, without needing it and then using their own money to invest elsewhere, equities, BTL etc.

What happens in the event of negative equity?

chewmylegoff

wotsthat wrote: »

I won't tell Chewmylegoff if you don't.

Too late - I'd already seen it. I virtually bit my virtual tongue though and consoled myself by banging my virtual head against a virtual wall.

Graham_Devon

ukcarper wrote: »

Other sites are calling it an equity loan no where does it say that the goverment are taking a 20% stake in your house but if it is the 1.5% fee growing at RPI + 1% makes sense that is just the original 1.5% rises by RPI + 1%.

Bolded bit makes perfect sense.

Devil is in the detail. We need more information on it, as everyone it seems is looking at it all differently.

They definitely take 20% of any increase in value when selling the house. There is definitely a 1.7% fee (and I think you are right, this could rise each year by RPI + 1%, though still building each year considerably). You definitely can't pay it off in chunks.

It does look increasingly like you can only pay it off when you sell the house? Unless they revalue the house when you offer to pay it off in full without selling?

chewmylegoff

grizzly1911 wrote: »

I find it incredible that the government can go around giving sizeable interest free loans to people.

Who is footing the bill?

What is to stop someone obtaining the loan, without needing it and then using their own money to invest elsewhere, equities, BTL etc.

What happens in the event of negative equity?

In answer to your questions:

1) taxpayers

2) nothing

3) i imagine the bank gets its money first, government gets what is left, you then owe government for the shortfall

I think it's a stupid idea personally but the govt is clearly getting quite desperate now so it's not surprising.

ukcarper

Graham_Devon wrote: »

Bolded bit makes perfect sense.

Devil is in the detail. We need more information on it, as everyone it seems is looking at it all differently.

They definitely take 20% of any increase in value when selling the house. There is definitely a 1.7% fee (and I think you are right, this could rise each year by RPI + 1%, though still building each year considerably). You definitely can't pay it off in chunks.

It does look increasingly like you can only pay it off when you sell the house? Unless they revalue the house when you offer to pay it off in full without selling?

So after the 25 years you will owe 20% of the value of house + the 1.5% fee + (RPI+1%) about £1700 in your example.

That makes sense to me we will just have to wait until we see fine print.

Graham_Devon

Actually feel a little sorry for Danny Alexander on newsnight tonight!

Appears he's let slip that it's all but a certainty that we will link interest rates to arbitrary unemployment targets too. This is regardless of inflation and regardless of 1% pay caps.

wotsthat

Graham_Devon wrote: »

Isn't this missing the point somewhat though?

If people can't afford to save a deposit and therefore need this scheme, what makes you think they can pay it off within 5 years!?

Again, if you can't save a deposit, 40k in 8 years is a LOT to save....

Maybe I'm just far too risk adverse. I dunno. Just can't see how if people can't save a deposit we can assume they can pay off a massive loan within 5 years.

The deal you described is almost free money. Historically most people managed paying a full mortgage rate on that 20% even at peak prices. I'm not assuming that they could or should pay off 20% in 5 years on top of the normal repayments - can't see there's much point worrying about it. Deposit requirements change but I doubt affordability requirements will change that much - if someone is going to be strapped to make the payments I doubt they'll get the loan anyway.

It's perfect for renters paying rents that are approaching the equivalent repayment mortgage and saving at the same time. I'm risk averse too but this is a gift.