MSE News: Budget 2013: Help to Buy mortgage scheme to launch

Former_MSE_Helen

"Help for those struggling to afford a mortgage will be available from 2014, Chancellor George Osborne announced today..."

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Budget 2013: Help to Buy mortgage scheme to launch



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biglugs

Yahoo! A return of Mortgage Indemnity Guarantee (which is what the new mortgage guarantee scheme is) should open upper access to mortgages at more affordable rates, starting next January.

Personally I'd have preferred abolition if VAT on home improvements, but you can't have everything.

Suarez

I don't see why they are trying to reduce the amount of deposit house buyers need. 10% is already quite low and easily achievable.

MorganW

Looking forward to the exact details (Treasury website info is relatively sparse on specifics).

I also hope that Builders will make their full stock of New Build properties available for purchase. I have my eye on a specific, premium, building but it's currently not available to those on FirstBuy or NewBuy, which I assume is because of the financial contribution the developer, under those schemes, would have had to contribute.

kezbabybabe

Suarez wrote: »

I don't see why they are trying to reduce the amount of deposit house buyers need. 10% is already quite low and easily achievable.

Sounds like it on the face of it, but when a simple 2-bed house in my area would mean a deposit of about £12,000, it takes a while to get the funds together as there isn't as much surplus income each month.

This news sounds promising and I'm hoping that it shows to be successful when the time comes for me and my boyfriend to look at buying a home.

Thomas_Hardy

Suarez wrote: »

I don't see why they are trying to reduce the amount of deposit house buyers need. 10% is already quite low and easily achievable.

I agree - if someone cannot save a decent deposit, should they really be encouraged to take on a massive debt (which is what a mortgage is)?

Crashandburn

biglugs wrote: »

should open upper access to mortgages at more affordable rates, starting next January.

Mortgages at more affordable rates? Not too sure how low you want them to go but 4.24% at 90% loan to value seems very cheap to me.

opaque

Thomas_Hardy wrote: »

I agree - if someone cannot save a decent deposit, should they really be encouraged to take on a massive debt (which is what a mortgage is)?

But a lot of people are trapped by paying high rents and so not being able to save, in many cases a mortgage payment would be less than the rent there were already paying.
So financially it can actually make more sense to have a mortgage even though it is a long-term commitment.

Just going by what I've read it says ' payable on sale of the property', well the normal Firstbuy system it's on sale of property or re-payment of the loan so I guess it's both on the new system as well. The idea that people will be selling up after 10 years is making a rather large assumption of the increase in value of new builds that I cannot see ever happening. New Builds are already far over the cost of existing housing so selling up to move up isn't as likely these days.

Suarez

kezbabybabe wrote: »

Sounds like it on the face of it, but when a simple 2-bed house in my area would mean a deposit of about £12,000, it takes a while to get the funds together as there isn't as much surplus income each month.

This news sounds promising and I'm hoping that it shows to be successful when the time comes for me and my boyfriend to look at buying a home.

Give up niceties such as holidays, going out, new cars etc for a couple of years and save like mad.

Thomas_Hardy

opaque wrote: »

But a lot of people are trapped by paying high rents and so not being able to save, in many cases a mortgage payment would be less than the rent there were already paying.
So financially it can actually make more sense to have a mortgage even though it is a long-term commitment.

Just going by what I've read it says ' payable on sale of the property', well the normal Firstbuy system it's on sale of property or re-payment of the loan so I guess it's both on the new system as well. The idea that people will be selling up after 10 years is making a rather large assumption of the increase in value of new builds that I cannot see ever happening. New Builds are already far over the cost of existing housing so selling up to move up isn't as likely these days.

What about increasing interest rates, unexpected maintenance and all the other costs that go with home ownership? If you can't afford to save, how will these costs be covered? Affordability goes far beyond making the mortgage payment each month.

Osborne said the guarantee/ loans would be interest free for five years, implying interest will be payable after this time. Another cost that needs to be accounted for.

With the exception of a few, all this scheme does is offers the opportunity for more unmanageable debt.

NPowerUser

Suarez wrote: »

Give up niceties such as holidays, going out, new cars etc for a couple of years and save like mad.

Add Sky & the latest gadget or mobile phone to that list.

Looks like that borrowing and the deficit will be higher than when they came to office.

They probably realize that people will vote in 2015 on how they feel financially. Most will feel worse off than in 2010 but they will keep house prices propped up as best they can, which this scheme helps to perpetuate.