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

Wallhart

Bingo, high rents is the challenge. A 10% morgage for a 2 up 2 down is £30k where I live.

For too long property investors have been making huge sums of money at the expense of first time buyers ability to get on the property ladder. New builds are also non existant where I live and even if they were they create a room the size of the desk I am sitting at now and call it a 3rd bedroom and add a premium on to the house.

Lets not kid ourselves either. Prices will go up on the back of these schemes as demand increases. Banks will not pass on the risk free element into the interest rate.

There is a massive divide in property prices in this country depending on where you live. (North South) Older generation sit on huge wealth in there assets yet first time buyers now have to face these prices.

I am happy the the government have acknowledged the issue but I'm not sure yet exactly how these will help me.

I think a lot of you also forget that first time buyers are young and at a stage in there career where their ssalary will increase quite quickly. Helping them on the ladder means that they don't have to waste money paying someone elses asset off but instead their own with disposable income increasing each time they get promoted. The renting market has been a "richer get richer" scheme for a long time. I would have like to see a tax to help reduce rents or reduce the demand for people to buy second homes.

HAMISH_MCTAVISH

Excellent news.

Should result in between 500,000 and 750,000 more high LTV mortgages being issued over 3 years from January 2014.

Versus just ten or twenty thousand high LTV mortgages being issued last year.

Tremendously good news for the housing market, and the 1.5 million potential buyers frozen out so far by mortgage rationing.

If you are in a position to buy before then, probably good to do so, as there will be an awful lot more competition for housing from next year onwards.

opaque

Suarez wrote: »

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

Bit of an assumption that people are spending money on those things isn't it?

Thomas_Hardy

Wallhart wrote: »

I think a lot of you also forget that first time buyers are young and at a stage in there career where their ssalary will increase quite quickly. Helping them on the ladder means that they don't have to waste money paying someone elses asset off but instead their own with disposable income increasing each time they get promoted.

Some (in the professions) will see large salary increases, in which case there is no harm in waiting to buy once they have a better salary. Equally many will be earning little more in five or ten years than they do now - not everyone has a career with a clear (or any) progression path.

Interesting that you assume all first time buyers are young - the average age is 30, so hardly someone straight out of university.

Suarez

opaque wrote: »

Bit of an assumption that people are spending money on those things isn't it?

Well if they can't save by living a basic lifestyle then they have no hope of purchasing a property. With or without a government scheme...

Wallhart

30 is young nowadays. What 20 yr old can afford a mortgage.

If you are in a dead end career and can barely afford a mortgage then the guarentee scheme doesn't mean the bank is guarenteed to give you a loan. It still comes down to whether you can afford repayments or not.

The problem in this country is the structure of the housing market. Not enough supply and those that are available are snapped up by the wealthy to rent out. There needs to be discouragment measures of having a second or third property.

Thomas_Hardy

Wallhart wrote: »

30 is young nowadays. What 20 yr old can afford a mortgage.

If you are in a dead end career and can barely afford a mortgage then the guarentee scheme doesn't mean the bank is guarenteed to give you a loan. It still comes down to whether you can afford repayments or not.

The problem in this country is the structure of the housing market. Not enough supply and those that are available are snapped up by the wealthy to rent out. There needs to be discouragment measures of having a second or third property.

I bought my first house at twenty.

A thirty year old is not someone at the beginning of their career as you state.

The word you are looking for is guarantee.

If there is a problem with the supply of housing, why do you think that increasing demand is a good thing?

moriarty888

If people can't afford the deposits necessary to purchase a property, then that means the properties are too expensive. All this does is prop up property prices and unmanageably high mortgage loans. To the benefit of....? Oh yes, banks and building companies.

5% deposit and 3 times your salary = price you can pay. If the property costs more then it's too expensive.

This saddens me greatly.

dotdash79

With the average retirerment age going to be around 70 by the time todays 30 year old retire, that is still 40 years to buy and move on.

EvilJaz

So the young have to pay for the mistakes of the old?