More Breaking news Help2Buy II starting now...

ukcarper

AndyGuil wrote: »

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

Not the equity loan part two is just an mortgage guarantee

"Lenders who want to offer mortgages of up to 95% loan to value (LTV) but do not want to take on all of the risk will be able to buy a guarantee from the government for up to 15% of the loan. The borrower will need to put up a 5% deposit."

Better_Days

I must admit I'm still confused.

How does HTB 2 actually work? Is it like this?

Mr Happy House Hunter has an offer accepted on a property for £100k. He only has £5k deposit.

He asks Loadsa Money Bank for a mortgage. But they say 'you are too much of a risk Mr Happy House Hunter'

Eyes on the Election Government say 'thats ok Loadsa Money Bank, if Mr Happy House Hunter defaults on his £95k mortgage Tonsa Money Taxpayer will cough up £15k to Loadsa Money Bank when the house is repossessed.'

Is this what will happen if there is no equity in the property?
If there is equity in the property will the cost to the taxpayer be apportioned?

As an aside, prices have risen in this area by nearly 9% this year. HTB 2 will I think make things worse as I just cannot see how supply will catch up with demand.

Eskimo12345

ukcarper wrote: »

Not the equity loan part two is just an mortgage guarantee
"Lenders who want to offer mortgages of up to 95% loan to value (LTV) but do not want to take on all of the risk will be able to buy a guarantee from the government for up to 15% of the loan. The borrower will need to put up a 5% deposit."

Now there's more news articles about, ukcarper certainly seems to be correct, and that's a relief for me. Anyone who can afford a 95% mortgage on the places I'm looking at already earns far in excess of me, so my competition hasn't changed. There may be an increase in the price of houses I'm looking at, but only after a delay as the bottom of the market booms due to the new scheme.

It's clearly a horrible, horrible scheme designed to increase house prices from the bottom up.

Graham_Devon

Be interesting to read the press about this in the next week.

One would imagine the tories have took a gamble. Wait too long and they would really struggle selling this in January when prices have risen. So instead of taking onboard all the pressure from economists etc to axe it, they have decided to bring it forward.

Note they have reduced it from 20% to 15% though.

Here we go then. Market is now completely and utterly rigged.

Winding it down is going to be an absolute nightmare.

Surprised the cap is still 600k. You certainly don't need taxpayer help if those are the types of properties you are looking for. Hence, ti's just a scheme designed to push prices up.

chewmylegoff

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.

There are two parts to help to buy.

Phase 1 which has been in play since April 2013. This is for new builds only. It is an interest free equity loan of 20% of the value of the property. The government therefore gets 20% of any gain/loss on sale or remortgage.

Phase 2 which is being introduced now. This applies to any property upo £600k and works by the government guaranteeing to the lender that it will take the hit on the first 15% of the mortgage in case of default. You cannot use this to "top up" your deposit as far as I understand - it just encourages the lenders to lend to people with smaller deposits as in terms of risk to the lender a HTB phase 2 mortgage with a 5% deposit is the same as a 'normal' mortgage with a 20% deposit.

leveller2911

Graham_Devon wrote: »

Here we go then. Market is now completely and utterly rigged.





Winding it down is going to be an absolute nightmare.





Surprised the cap is still 600k. You certainly don't need taxpayer help if
those are the types of properties you are looking for. Hence, ti's just a scheme
designed to push prices up.

Low paid people who live in London who can't afford the rents are told to move out to a more affordable area and commute in whilst at the same time the taxpayer is expected to act as guarantor for people to buy £600k houses in London.

If these people can't afford to buy the houses without state help then maybe they look to move out of London and commute.I guess these people are more likely to vote Tory than Nu-Labour.

Result is the cost of putting a roof over everyone head increases, people have less disposable income to spend as earnings stagnate.

You couldn't make it up............But then again London is Speshul.

AndyGuil

ukcarper wrote: »

Not the equity loan part two is just an mortgage guarantee

"Lenders who want to offer mortgages of up to 95% loan to value (LTV) but do not want to take on all of the risk will be able to buy a guarantee from the government for up to 15% of the loan. The borrower will need to put up a 5% deposit."

Yes of course! I vaguely remember this when it was announced originally.

Graham_Devon

Anyone have any idea why this is only available to those in England?

What about Wales, Scotland and NI?

Seems utterly bizzare. And it's not only the Beeb stating that, it's also the Telegraph and Independant.

Loughton_Monkey

Graham_Devon wrote: »

Anyone have any idea why this is only available to those in England?

What about Wales, Scotland and NI?

Seems utterly bizzare. And it's not only the Beeb stating that, it's also the Telegraph and Independant.

These are largely devolved governments, who make these decisions themselves. So far, it seems, none of these countries have decided to enter the fray. Perhaps NI thinks its prices don't need to go up. Wales, as Persimmon have intimated, can't stimulate building since building costs exceed house prices. Scotland needs to save money for total independence. The government doesn't want all these schemes to be monitored in € for evermore.

Maybe, since you hate HTB, you should move to Scotland. I believe Aberdeen can be nice and house prices quite reasonable.

gazzabboi

wotsthat wrote: »

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?

The forces loans won't be paid for by the tax payer, it will come from money put aside by pension contributions. If you have the money to additionally help your son/daughter then you should, it saves them paying mortgage interest.