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ukcarper

Eskimo12345 wrote: »

I'm so disappointed this scheme was ever proposed, let alone brought forward. I've been saving like mad for the last couple of years, and now with this scheme, people who've frittered away most of their money are on a level footing with me when it comes to purchase price. How is that fair?

To be honest though, I'm considering using it to top up my 15% deposit with an extra 10% interest free for five years, bank the difference in mortgage repayments and make a little cash off the scheme, then pay back the loan in full after the five years are up. It just depends if banks have different interest rates for normal folk and help-to-buy folk. I'd feel a little guilty that I'd be making money off the taxpayer, but, well, money's money.

I think you would be better of not buying a new build as like for like they are generally second hand property is cheaper.

Perelandra

What happens if the house values go down? Does the [STRIKE]government[/STRIKE] taxpayer share the equity loss there too?

wotsthat

Perelandra wrote: »

What happens if the house values go down? Does the [STRIKE]government[/STRIKE] taxpayer share the equity loss there too?

No. The taxpayer only loses out if the homeowners don't repay their equity loans and it can't be recovered.

As a method for increasing supply HTB is rather a blunt instrument and it's questionable whether part two is really a mechanism for increasing supply at all.

The beauty of the scheme though is that any new supply is paid for buy the homeowner and there's a chance that supply will increase with zero cost to he taxpayer.

Compare this to a council house building scheme where the taxpayer builds the houses and, for reasons unknown, feel compelled to subsidise the rent of the occupants.

Perelandra

wotsthat wrote: »

No. The taxpayer only loses out if the homeowners don't repay their equity loans and it can't be recovered.

As a method for increasing supply HTB is rather a blunt instrument and it's questionable whether part two is really a mechanism for increasing supply at all.

The beauty of the scheme though is that any new supply is paid for buy the homeowner and there's a chance that supply will increase with zero cost to he taxpayer.

Compare this to a council house building scheme where the taxpayer builds the houses and, for reasons unknown, feel compelled to subsidise the rent of the occupants.

So essentially there's a risk that there will be a default on the loan, which has been guaranteed by the government

vs

A gain if property prices go up, and no loss if property prices go down (assuming the loan is repaid)?

That's an interesting scheme. So an economy of low interest rates, and rising house prices means this scheme could actually make a profit for the taxpayer.

CLAPTON

Perelandra wrote: »

What happens if the house values go down? Does the [STRIKE]government[/STRIKE] taxpayer share the equity loss there too?

for equity loan then yes, if the price of the property falls and the owner sells then the taxpayer takes a hit

wotsthat

gazzabboi wrote: »

This army scheme wouldn't work for your son. Currently the army are given an interest free loan up to 8.5k, its been there years, called lsap. All they are doing is increasing this to be more in line with today's market. Its for soldiers who have served more than 4 years. Its not a loan you can just bank, its attached to the house.

It's a loan that could be offset - HTB is similar. Why help your kids with a deposit when you can keep that money in the bank and get he taxpayer to help them instead.

I think we'll be seeing news reports soon saying that parents are contributing less to their kids house purchases. Why bother?

Eskimo12345

AndyGuil wrote: »

The people that do take the scheme will have that to pay back and the government own part of the equity and hence any gains in the property value. No thanks.

Ah, I didn't spot that. In that case I'll carry on as I intended. It's disappointing that my intended advantage as a FTB in a market primarily dominated by second steppers may disappear when many more FTB's can put down the same size 'deposit' as me, and therefore compete for the same properties.

ukcarper wrote:

I think you would be better of not buying a new build as like for like they are generally second hand property is cheaper.

This thread is about the scheme for anyone buying any property up to £600k, not just new builds, so the Victorian properties that I'm looking at are included, probably pushing the prices up.

To me, this scheme seems designed to push house prices up, and saddle people with more debt.

EDIT: I'm wrong. Page 2 has the correct details on the schemes!

Trunk_z

I posted this in another topic, but I think it applies here too:

I was always taught that something which seems too good to be true, is just that.
There must be a catch somewhere...

ukcarper

Eskimo12345 wrote: »

Ah, I didn't spot that. In that case I'll carry on as I intended. It's disappointing that my intended advantage as a FTB in a market primarily dominated by second steppers may disappear when many more FTB's can put down the same size 'deposit' as me, and therefore compete for the same properties.


This thread is about the scheme for anyone buying any property up to £600k, not just new builds, so the Victorian properties that I'm looking at are included, probably pushing the prices up.

To me, this scheme seems designed to push house prices up, and saddle people with more debt.

You can only get the equity loan on new properties.

AndyGuil

Next week it is on all properties not just new build.