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

saayinla

BritishBulldog wrote: »

Wallhart, where does it say that? Im not disputing your reply, just havent seen that top limit of 20%..on the HMRC website it merely says 'a deposit of as little as 5%'.
Either way, great news for the better half and i - We'll have a good £50-60k saved up by the end of the year (£30k in the bank at present), looking at houses in the £350-400k mark anyway, so a 'free' 20% (£70-80k) courtesy of the Halfwit in Number 11 will be most welcome.

But I suspect property prices will go up again by the Time the scheme kicks off as a lot of people will be able to get a mortgage due to the guarantee hence creating another false economy , possibly resulting in another housing crash? No?

BritishBulldog

Saayinla, im sure youre absolutely correct, it will create something of a mini-boom in prices, which certainly sucks...on the other hand i suspect the market will now die for the remainder of this year and we are still in a position to buy quick as FTBs if the right place rears its pretty little head.

saayinla

BritishBulldog wrote: »

Saayinla, im sure youre absolutely correct, it will create something of a mini-boom in prices, which certainly sucks...on the other hand i suspect the market will now die for the remainder of this year and we are still in a position to buy quick as FTBs if the right place rears its pretty little head.

I agree with you, so now until the end of year would be an ideal time for a ftb to get their foot in the door.

Leon_W

A couple of posters here have thought through the consequences and come up with the right answer.

All it will do is make buying a more expensive home more affordable and houseprices will rise to compensate for it.

These schemes just distort the market.

dotdash79

I would expect a lot of people hold off selling until the new year so thw number of houses on the market migth be lower over the next few months as people may hold out for more buyers.

regbrown

for the love of god, please do not purchase a new build home. Well not if they are priced anything like they are around here on these schemes.

A few years back we looked into the new build scheme and found the prices of these houses to be massively inflated. They want £225k for a 2 bed mid terrace box house. A regular 2 bed around here is £150k and even the old "nicer" area ones are only £165-185.

I have seen on rightmove that a few have come on the market and they just cannot sell so the owner is probably going to be stuck with about £20k in negative equity.

I spoke to a few of the developers on these new areas and they tried all kinds of slimy sales spiel to get us to sign up, horrible people trapping desperate folk who want out of renting

The only way we ended up being able to afford to buy is that my parents gave me some money via equity release as they said they would rather I get it now while it can do some good. Is awful time for most of our younger generation.

Wallhart

I agree.

I've been looking into this further.

I thought that you have a 5% deposit and then have 20% interest free and then 75% with your mortage provider at the rate you would get charge on a 95% mortgage.

On the pack on the treasury website it saus you only need to secure a 75% LTV mortgage with your bank.

Well there is surely a big difference because the rate would be lower in the 2nd example.

Example (Numbers are made up apart from the calcs)

£100k house
95% mortgage rate 5%
75% mortgage rate 3.5%

Scenario 1
£5k Deposit
£20k interest free for 5 yrs
£75k at 5%

Scenario 2
£5k Deposit
£20k interest free for 5 years
£75k at 3.5%

If you open the pack on this link it sounds like scenario 2

http://www.hm-treasury.gov.uk/d/budget2013_help_to_buy_infographic.pdf

sammyjammy

NPowerUser wrote: »

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.

Not looking for votes from public sector workers then :rotfl:

sammyjammy

jibbyboo wrote: »

Agreed Saayinla.

So does anyone know what counts as a new build? Why is it solely for new builds that the scheme is offered?

Encourage house building, increased employment blah blah blah

Lizling

Increasing demand (defined as desire and ability to buy) without an increase in supply increases prices. That’s GCSE level economics. Stupid policy.

And this had better not apply to BTL.