Really depressed by the news about Help to Buy...

JencParker

kingstreet wrote: »

The nearest comparable scheme to HTB - MG is NewBuy, where a typical 95% mortgage is in the 4% to 4.5% range. This has a similar guarantee underpinning it.

I expect NewBuy to disappear in January, when builders see no sense in paying 3% of the value of the property away when there's an alternative.

FLS has had limited impact on rates at high loans to value, as lenders have concentrated on cutting margin at lower rate, better "quality" business. They may decide to offer lower rates on higher LTVs as they approach the day of reckoning in April, where they have to show an increase in their net lending or pay penalties to the Treasury, but that is by no means certain.

Given the implications of the MMR introduction, also in April next year, I don't see any great change in rates, nor underwriting/criteria as a result of HTB - MG. Those who cannot currently get a 95% mortgage from one of the 17 lenders offering them, will, in my opinion, still be unable to do so even with the Government guarantee.

Thanks for that. I did think it's benefit would be very limited, From what little I have heard, banks won't be lending larger amounts - which will still be governed by income. So will really only help those who had not yet saved enough of a deposit.

Interesting your view on new builds. Surely the idea was to increase building because of the shortage.

kingstreet

I'm not saying builders will build less.

I'm saying they will use HTB - MG instead of NewBuy because NewBuy costs them money. HTB - MG won't.

That does assume the lenders will offer HTB - MG products on newbuilds. They do not have to, as many normally only lend upto 80%, or 85% on newbuilds and only offer 95% on the NewBuy scheme for specific properties because of the 3% levy.

My colleague is at a LBG newbuild seminar today, so we'll get more meat on the bones of what's going to happen come January.

JencParker

But will they build more? Which, I thought was one of the reason for HTB on new properties?

kingstreet

Then you're talking abut the existing HTB - Equity Loan scheme, not the new HTB - Mortgage Guarantee variant.

I suspect builders will be building more as the market and demand have increased since April.

The primary aim of HTB - MG is to encourage sale of non-newbuilds, by making more 95% mortgage available on second hand property.

http://yournews-legalandgeneral.com/pv_obj_cache/pv_obj_id_BB320F8298FC1120B8826B44DE0AD12E294C0800/filename/Help%20to%20Buy%20Definition%20Budget%202013.pdf

Turnbull2000

JencParker wrote: »

But will they build more? Which, I thought was one of the reason for HTB on new properties?

Probably 150,000-170,000 per year at at maximum. Our house building industry is essentially closed to competition thanks to land restrictions and regulation. So the developers have made it clear they favour margins over volume.

We need 250,000-300,000 to solve our chronic shortage. This is unlikely to ever be achieved. We failed to build enough housing during the biggest credit boom in history (2002-2007), remember.

Only large scale state house building, loosening of land restrictions and regulation to enable competition and self-builds allow us to meet housing needs. But this would be politically undesirable and deeply unpopular with voting homeowners.

Something_Witty

Tancred wrote: »

Prices are already rising steadily. There won't be any dramatic instant price rises as a result of this measure, but I suggest you start looking soon.

Tancred, if we could start looking now we would. Unfortunately we won't have 20% deposit saved until end of 2014, so I'm resigning myself to the fact that we are pretty much screwed.

mrginge

harrys_dad wrote: »

Oh look what the Governor of The Bank of England is saying right now @Hamish McTavish

http://www.theguardian.com/business/2013/oct/02/mark-carney-warning-interest-rates

It doesn't matter what anyone says, hamish has a graph which shows interest rates have dropped significantly in the last ten years. Extending this out clearly shows that we will see rates of -5% by 2016.

HAMISH_MCTAVISH

Something_Witty wrote: »

Unfortunately we won't have 20% deposit saved until end of 2014, so I'm resigning myself to the fact that we are pretty much screwed.

So why not use HTB and go with a smaller deposit asap?

HAMISH_MCTAVISH

mrginge wrote: »

It doesn't matter what anyone says, .

You can whinge all you like mate.

I've been pretty much spot on with my annual HPI predictions over the last 5 years, and you lot have been disastrously wrong.

juileq wrote: »

the most accurate poster here is Hamish, who has called all aspects of the housing market extremely accurately.

On any rational basis he "won" the argument by being right about it throughout.

But the bears will never accept that.

Semi religious nutters really. You would think at some point they'd twig that they're utterly wrong, but faith is a strange and wonderful thing.

So either take heed, or don't, makes not the slightest difference to me.

HAMISH_MCTAVISH

harrys_dad wrote: »

Oh look what the Governor of The Bank of England is saying right now @Hamish McTavish

And look what another MPC member is saying at the same time.....:D

An end to the savage squeeze on family finances is in sight, a top Bank of England official has claimed.

Paul Fisher said inflation is on the way down and wages will start rising - in welcome relief to millions of cash-strapped households.

In an exclusive interview with the Mirror, Fisher also reassured borrowers that the Bank’s base rate won’t spiral when it does eventually increase from the record low 0.5%

“People may have thought, when we got some growth back in the economy, we will jack up rates.

That is not the plan.

“We are not going to do this in a way that decimates the economy.

“The whole point of forward guidance is we won’t be raising rates until the economy is in a strong condition. That is why we are linking it to the decline in the unemployment rate.

“We will have to judge a rise in rates that keeps the economy growing at around its trend rate of 2% to 2.5%.

“If we thought the economy was going to be particularly sensitive to rate rises we would be taking it relatively gingerly.”
.

http://www.mirror.co.uk/money/city-news/wages-rise-squeeze-family-finances-2332633#ixzz2ggy0AR2B

So just to be clear, with falling unemployment, rising wages, an improving economy, and a BOE committed to only raising rates gently once the recovery is locked in......

You expect vast numbers of people to struggle with mortgages and house prices to....... fall?

Seriously?

:rotfl::rotfl::rotfl: