Will they ever learn?

monkeysrevenge

demontfort wrote: »

You know what despite my 100% opposition to HTB I'm not opposed to giving FTBs some very limited assistance. Based on your local house prices I assume you're not in the South East and house prices round your way have probably taken a hit the last few years. So if the government wants to provide a very limited number of small (5% of property value), short term market rate loans to local FTBs on properties up to £100k I can't see the harm.

However HTB is a different kettle of fish. HTB1 is bad enough but HTB 2 really sticks in my gullet. A policy which loans up to 20% interest free on a £600k ...yes £600k purchase with no cap on your income and regardless of whether you already own your own house is grossly unfair and will distort the market and hurt the economy, UK government and personal finances in the long term.

In London, prices are already sky high and this will make it worse for FTBs. I have my own deposit which I have worked and saved hard to get but as an illustration my agreed purchase fell through last month as the vendor pulled out telling me he had decided to remarket the flat after HTB2 came in next year as he would get a better price.

I agree that £600k is far far too much to lend under this scheme. If you can afford a 75% LTV mortgage at that level, you're probably earning over £100k as a couple, and in my opinion no matter where you are in this country, if you can't afford a deposit on that kind of salary you don't deserve a house!!

I'm guessing they put that limit in though because of the wild variations in house prices nationally - still far too high a limit in my opinion though!

grizzly1911

Perhaps some form of Mortgage Interest Relief at Source for FTBs could work (again).

It might even encourage people to save for a deposit a little harder?

monkeysrevenge

grizzly1911 wrote: »

What happens if you have taken on this mortgage, heavily committed yourself, have little in the way of savings, possibly negative equity, interest rates are rising and that "unexpected" stuff happens?

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You are right unsecured credit and it's ease of availability was and still is an issue for many. When interest rate rise I am sure people will start tapping that resource once more.

That's the point really, if you're able to get on the housing ladder and be paying a mortgage rather than renting, you can still save up and pay for these things when you need to, but you'll have a house as security instead of a monthly rent.

The unsecured lending market does need to be massively tightened up and addressing quickly otherwise we will be on the way down again.

Credit reference agencies properly sharing information would be a good start I think, so lenders have a full overview of a person's finances and can make more accurate risk assessments on an individual.

neverdespairgirl

JencParker wrote: »

Under estimates more like!

£250 per month travel for a couple? - my daughter pays nearly that for herself. So you could double that.

and £800 per month rent? In Local Authority housing maybe, but not in the private rented sector in London/Greater London

The OP himself said he adn his wife paid £700 to £800 a month in rent! So that's why £800 was an over-estimate, rather than underestimate.

I pay approx £120 a year to travel between home and work.

MacMickster

It is becoming clear from this thread that the reason that some people struggle to save a deposit is lack of budgeting skills and financial nous rather than a lack of income. They consider that they should not have to compromise their lifestyle in any significant way in order to save.

Surely this is exactly the reason that people should be able to demonstrate their ability to save for a deposit before being offered any mortgage.