Help to Buy is nothing but an election ploy....

Jason74

CLAPTON wrote: »

In what way does HTB suppress supply?

To be fair, it doesn't. What it does do (in htb2 form at least), is lead to more money chasing the same amount of supply. Do that in any market, and you're more or less guaranteed to cause inflation in the market concerned, and that's why it's a ridiculous policy. The scary thing is that the chancellor and PM don't seem to understand this.

HTB1 is of course a different kettle of fish, and actually pretty clever. At least here, the creation of demand is directly linked to the creation of new supply. This gives an incentive to create that supply (which has a long term benefit by creating more homes, and a short term one by creating jobs), and avoids just bidding up the existing supply.

CLAPTON

Jason74 wrote: »

To be fair, it doesn't. What it does do (in htb2 form at least), is lead to more money chasing the same amount of supply. Do that in any market, and you're more or less guaranteed to cause inflation in the market concerned, and that's why it's a ridiculous policy. The scary thing is that the chancellor and PM don't seem to understand this.

HTB1 is of course a different kettle of fish, and actually pretty clever. At least here, the creation of demand is directly linked to the creation of new supply. This gives an incentive to create that supply (which has a long term benefit by creating more homes, and a short term one by creating jobs), and avoids just bidding up the existing supply.

I would favour reduction of planning rules to make more land available and the reduction in government costs on new builds and so make new builds more attractive relative to already loved stock.

In the present circumstances I would agree that HTB2 will increase prices although some of the money will go into new builds either directly or indirectly.

antrobus

leveller2911 wrote: »

But Nationwide are lending on the HTB scheme to people who are ex bankrupts ....

Are they? I was under the distinct impression that the Nationwide had decided not to participate in HTB2.

Graham_Devon

antrobus wrote: »

Are they? I was under the distinct impression that the Nationwide had decided not to participate in HTB2.

But they are in HTB1.

leveller2911

Thrugelmir wrote: »

Would you prefer more and more property to fall under the ownership of BTL LL's ?

Tax BTL so its not so attractive to invest in. It would never happen of coarse because The Tories and Nu Labour would rather paper over the cracks than solve the problem or at least real reforms.

Governments need to stop raiding pension funds etc so that small investors can have confidence in other investment vehicles, all we seem to get now is Joe Bloggs buying a BTL as though its an I-pod purchase.

Loughton_Monkey

Jason74 wrote: »

To be fair, it doesn't. What it does do (in htb2 form at least), is lead to more money chasing the same amount of supply. Do that in any market, and you're more or less guaranteed to cause inflation in the market concerned, and that's why it's a ridiculous policy. The scary thing is that the chancellor and PM don't seem to understand this.

I think they do understand it.

Yes. It leads to more money chasing the same amount of supply, which is more or less guaranteed to cause inflation......

But, in turn this gets the builders brushing the cobwebs off their wheelbarrows, so that we do not have the "same" supply for much longer.

Houses have been ridiculously low for years, to the point of below 'cost price' and unless we are to borrow more and subsidise such extra building, we must find cheaper ways to stimulate new building. HTB is a small step in that direction, but only helping a tiny proportion of buyers.... but enough to stimulate the market again and get it moving. Extra jobs available too. Everyone's a winner...... except for those who had hoped to buy a house "on the cheap".

These people had their chances and didn't take them for whatever reasons. Now they will have to pay 'full market price', but their house purchase will remain one of the best investments they could make.

We musn't forget that most new buyers entering the market were born in the 1980's/early 1990's. Unlike the previous generations, these people are a totally different breed [generally speaking. I'm sure there are a few exceptions]. When they earned 'good' money, they blew it. Didn't save. They know very little about savings or investments and are, quite frankly, as unsophisticated as you can get.

Add to that the psychology. If you begin economic life during a recession, then you know no better than doom & gloom. If you begin economic life during a 'boom' there might be a tendency to be too bullish and optimistic. This is why listening to older generations is often a good idea.

Those of us born in the 70's, for example, were a bit prone to believe high 20%+ inflation was the norm.... hence calculations that lowly office clerks would be earning £1 million pa before they retired. But it made us 'lock in' our highest ticket purchase [the house] as soon as we could. No. We never got our £1 million a year income, but possibly earned just as much in house equity!

antrobus

Graham_Devon wrote: »

But they are in HTB1.

And they've signed up to HTB (Welsh government version), but as far as I'm aware they haven't signed up to HTB2 which is the one that involves the taxpayer in "acting as guarantor for the other 20%".

Graham_Devon

antrobus wrote: »

And they've signed up to HTB (Welsh government version), but as far as I'm aware they haven't signed up to HTB2 which is the one that involves the taxpayer in "acting as guarantor for the other 20%".

HTB1 is pretty much the same. It's just wrapped up as an equity loan instead. It's the same principle, if the borrower defaults at any point, the taxpayer coughs up.

antrobus

Graham_Devon wrote: »

HTB1 is pretty much the same. It's just wrapped up as an equity loan instead. It's the same principle, if the borrower defaults at any point, the taxpayer coughs up.

No, HTB1 is quite different. If they were "pretty much the same" why would the Nationwide sign up for one and not the other?

Jason74

Loughton_Monkey wrote: »

I think they do understand it.

Yes. It leads to more money chasing the same amount of supply, which is more or less guaranteed to cause inflation......

But, in turn this gets the builders brushing the cobwebs off their wheelbarrows, so that we do not have the "same" supply for much longer.

Houses have been ridiculously low for years, to the point of below 'cost price' and unless we are to borrow more and subsidise such extra building, we must find cheaper ways to stimulate new building. HTB is a small step in that direction, but only helping a tiny proportion of buyers.... but enough to stimulate the market again and get it moving. Extra jobs available too. Everyone's a winner...... except for those who had hoped to buy a house "on the cheap".

These people had their chances and didn't take them for whatever reasons. Now they will have to pay 'full market price', but their house purchase will remain one of the best investments they could make.

We musn't forget that most new buyers entering the market were born in the 1980's/early 1990's. Unlike the previous generations, these people are a totally different breed [generally speaking. I'm sure there are a few exceptions]. When they earned 'good' money, they blew it. Didn't save. They know very little about savings or investments and are, quite frankly, as unsophisticated as you can get.

Add to that the psychology. If you begin economic life during a recession, then you know no better than doom & gloom. If you begin economic life during a 'boom' there might be a tendency to be too bullish and optimistic. This is why listening to older generations is often a good idea.

Those of us born in the 70's, for example, were a bit prone to believe high 20%+ inflation was the norm.... hence calculations that lowly office clerks would be earning £1 million pa before they retired. But it made us 'lock in' our highest ticket purchase [the house] as soon as we could. No. We never got our £1 million a year income, but possibly earned just as much in house equity!

The first and last paragraphs on this post are 100% accurate, but there is so much to disagree with in the middle that I almost don't know where to start. Probably the biggest one is the point about young people being somehow less responsible than generations that went previously. I'm sorry, but that just isn't the case. You can go back over the last 100 years or so at least, and find myriad examples of older people claiming that the "youth" coming through were somehow less hard working or less responsible than they were. Each generation making that claim has been wrong, and it's wrong to make it now.

If there is an issue around young people's attitudes at the moment, it's driven by the fact that they're smart enough to realise that the "game" is rigged against them in terms of big picture financial opportunities compared to previous generations. If you know that the dice are loaded against you, then that is going to affect your approach to the game.

It's important to add that I'm just coming up to 40, consider myself to have been born at reasonably "good" time opportunity wise (albeit perhaps not quite as good as 10 or 15 years before) and pretty happy with my lot materially speaking, so I have no personal axe to grind here. It's simply that there is a serious generational unfairness in place, and posts like yours perpetuate the myth that the lack of opportunity for young people is somehow their own fault.