Call to scrap Help to Buy in London as house prices become absurd

Graham_Devon

From Legal and General.

One of the leading players in the UK housing market has said that the Government should abandon its Help to Buy mortgage support scheme in London.

Nigel Wilson, the chief executive of the insurance and investment giant, Legal & General, said that the scheme risked stoking a price bubble which would put homes out of the reach of all but the most affluent.

In an interview with The Telegraph, Mr Wilson argued that house prices in London and the South East had reached “absurd” levels and said that the Government support scheme for mortgages for houses up to £600,000 was pushing up demand at a time when the supply of affordable housing was the problem.

Last year, average house prices across Britain increased by 8.4pc, with the figure rising to 15pc in London. Inflation is running at 2pc and income growth at less than 1pc, meaning the “affordability index” for housing is rising.

“Help to Buy turbo-charges an already rising market inside London – stopping it would be economically sensible and help prevent the North-South divide getting even wider,” Mr Wilson said.

Believe this is one of the first mutterings from within the housing industy?

They also state that the young are being encouraged into over-leveraged positions.

http://www.telegraph.co.uk/finance/economics/10582069/Call-to-scrap-Help-to-Buy-in-London-as-prices-become-absurd.html

CLAPTON

whilst I agree that the HTB for already loved stock should be abolished

why is L&G a leading player in the UK housing market?
what is their share of the mortgage market?

grizzly1911

Not all doom and gloom.

"L&G is now looking to enter the growing equity-release market, providing schemes that allow people to access funds linked to the value of their home. Some of the existing schemes have been criticised for charging high rates of interest."

Another lucrative market to be tapped.

antrobus

CLAPTON wrote: »

....why is L&G a leading player in the UK housing market?

Because the DT journo is working from the press release issued by the L&G PR team.:)

CLAPTON wrote: »

what is their share of the mortgage market?

Pretty close to zero I suspect. The company merely "facilitates up to £20bn of mortgages" - L&G don't appear to 'do' mortgages as such, they seem to act as an intermediary for brokers - http://www.legalandgeneral.com/mortgageclub/da/lenders/procuration-fees/

ruggedtoast

Either less people need to live in the SE of England or more houses need to be built in the SE of England.

The UK is becoming absurdly London-centric to the detriment of everywhere, including London, a city that isn't nearly big enough for the number of people trying to live and work there.

Even in the last ten years it has changed. Have you actually tried to meet anyone for a drink in a bar anywhere in Zone 1 for a quick drink before getting the train home after work?

Its an exercise in futility trying to find a seat anywhere. The best you can hope for is to walk 10 minutes from a tube station to find a dive, then be crammed in like cattle, standing up - probably outside, with awful music blaring at you at 1000db because the pub wants to make people drink and leave as soon as possible.

Not that it makes much difference, they could give you a poke in the eye with every watery, warm £4.85 pint of lager and people would still be fighting to get in there are so few meeting places for people that want to meet.

How about a quick jaunt into the Smoke with the kiddies on a weekend? That'll be a small mortgage for the train tickets, then what. Would we like a 2 hour queue to get into the Science Museum, two and a half for the Natural History Museum, or an easy four hours waiting for the Planetarium.

What. The. Hell. I've never experienced anything like it in any country anywhere. Its baffling.

We desperately need houses, jobs, recreation and transport somewhere other than flipping London. For Pete's sake there is something wrong where every train line in the country just looks like spokes on a wheel going into Zone 1, with nothing connecting to any other place apart from London.

HAMISH_MCTAVISH

ruggedtoast wrote: »

London, a city that isn't nearly big enough for the number of people trying to live and work there.

The population of Greater London today is around 8.1m.

Which is almost identical to what it was in 1931.

Loughton_Monkey

On wonders why L&G suddenly decide to gripe to the Telegraph, but not for long....

... seems they are only interested in launching a new push into equity release.

Mr Wilson said that one of the quickest routes to unlocking the housing market was to give older people the chance to downsize. He said the lack of options meant that retired people found it difficult to move to smaller houses, effectively blocking the release of family homes.

L&G estimates that up to £1 trillion of equity is locked up in under-used homes owned by retired people and that up to 4.5m people want to move to more suitable accommodation. “Everybody talks about the first-time buyer, we need to be just as focused on the last-time buyer,” Mr Wilson said.

“There is a chronic shortage of choice for them. [Unlocking] under-used housing and trapped equity is a big part of the solution to our housing problem.”

L&G is now looking to enter the growing equity-release market, providing schemes that allow people to access funds linked to the value of their home. Some of the existing schemes have been criticised for charging high rates of interest.

Now there's a man with the best interest of us boomers at heart.

Seems he wants to get all these smelly youngsters using HTB out of the way so that us 'oldies' can find a nice cheap retirement house and unlock 'loads-a-money'.

Thanks for the heads-up, Graham. I shall look more closely at L&G when I come to downsize. But it won't be for a while yet.

A true ally, it seems, thinking only of us oldsters and begging all this 'subsidy' to the young to stop.

LydiaJ

ruggedtoast wrote: »

We desperately need houses, jobs, recreation and transport somewhere other than flipping London. For Pete's sake there is something wrong where every train line in the country just looks like spokes on a wheel going into Zone 1, with nothing connecting to any other place apart from London.

I don't live in London. From my PoV, trains are expensive ways of getting to a place quite a long way from where you want to be, without any convenient way of taking more than a few belongings with you. I think I've probably only made one (return) journey by train in the last 8 years, and that was mainly because I was going with my solicitor, who was going for work and could claim the fare on expenses. She was starting a lot further away from the destination than I was, so I got onto the train she was already on as it passed through my town on its way to our destination, and we were able to talk business as we went along. I'd certainly have driven if I'd been on my own, though.

ukcarper

LydiaJ wrote: »

I don't live in London. From my PoV, trains are expensive ways of getting to a place quite a long way from where you want to be, without any convenient way of taking more than a few belongings with you. I think I've probably only made one (return) journey by train in the last 8 years, and that was mainly because I was going with my solicitor, who was going for work and could claim the fare on expenses. She was starting a lot further away from the destination than I was, so I got onto the train she was already on as it passed through my town on its way to our destination, and we were able to talk business as we went along. I'd certainly have driven if I'd been on my own, though.

That probably says it all you should come down and try driving in London.

LydiaJ

ukcarper wrote: »

That probably says it all you should come down and try driving in London.

I don't mind driving in London. I drive across London reasonably often when visiting one of my close friends who lives in zone 2. I went to meet up with some friends from this board at a restaurant in zone 1 (I think) a little while ago. They were surprised that I felt confident to drive in central London, especially in the dark, but the driving didn't bother me. It's parking in London that I don't like, so I'm sure if I lived there I'd use public transport as all the rest of you do, and as my family do when staying with our London friends if we're going somewhere where there won't be easy parking. (Our friends live somewhere with allocated parking and don't have a car, so it's never any problem to park at their house.)

My post was basically in agreement with what ruggedtoast said about there being no decent trains outside of London. Trains in London run a lot more frequently than over my side of the country, and there are always tubes and/or buses to take you quite close to your destination once you get off the train, so it's a different experience. Over here, I live a mere three and a half miles from the station, and it's suburban, not out in the sticks, but to get to the station by public transport I'd need to get two buses, one of which only goes once an hour. So perhaps if you think I should try driving in London, you should try getting about by public transport somewhere that isn't London (or Birmingham or another large city).

ukcarper

LydiaJ wrote: »

I don't mind driving in London. I drive across London reasonably often when visiting one of my close friends who lives in zone 2. I went to meet up with some friends from this board at a restaurant in zone 1 (I think) a little while ago. They were surprised that I felt confident to drive in central London, especially in the dark, but the driving didn't bother me. It's parking in London that I don't like, so I'm sure if I lived there I'd use public transport as all the rest of you do, and as my family do when staying with our London friends if we're going somewhere where there won't be easy parking. (Our friends live somewhere with allocated parking and don't have a car, so it's never any problem to park at their house.)

My post was basically in agreement with what ruggedtoast said about there being no decent trains outside of London. Trains in London run a lot more frequently than over my side of the country, and there are always tubes and/or buses to take you quite close to your destination once you get off the train, so it's a different experience. Over here, I live a mere three and a half miles from the station, but to get there by public transport I'd need to get two buses, one of which only goes once an hour. So perhaps if you think I should try driving in London, you should try getting about by public transport somewhere that isn't London (or Birmingham or another large city).

I don't live in London but worked there for all my working life and due to the nature of my job I drove and the time it can take to travel short distances is terrible. Public transport is good if overcrowded in London.


I was unable to drive for a year and do agree that Public transport can be very bad outside London where I am the buses stop at 7pm.