Government should help those without bank of mum and dad

Graham_Devon

N1AK wrote: »

What's the issue it is intended to solve?

Simply that those without help from mum and dad can not neccesarily afford the 5% deposit and are therefore "locked out of the schme".

Though someone with wealthier parents find themselves able to tap into the scheme.

Therefore the "complaint" as it were is that HTB isn't helping the people it should be helping. It's instead helping those who could have used the same parents to stump up a deposit for a more traditional 10% deposit.

All this was suggested on a local radio station by a local councillor. Apparently they want to put it to the government before the next budget, which seems a little late. Basically it's a local issue, with even a 5% deposit being out of reach for the majority without other help in the south west. Therefore, the idea is the government "give you" the 5% deposit and then lend the other 20% of the loan under HTB. So it's basically movign HTB to a 100% scheme, just via two loans, instead of one.

This would mean that anyone who could afford the mortgage payments can make use of the scheme, rather than only those with wealthy parents.

It's highly unlikely this will go anywhere....yet. But as house prices accelerate ahead and the 5% deposit for HTB becomes unaffordable for more and more, with an election to win, and a possible "peak to quickly" I could see something like this being announced within the next year to help "hard working families".

N1AK

Graham_Devon wrote: »

This would mean that anyone who could afford the mortgage payments can make use of the scheme, rather than only those with wealthy parents.

A councillor in an expensive borough suggesting the idea does not a plausible policy change, or manifesto pledge, make. It seems you're actually asking about whether it is politically plausible rather than a good idea, so it might have made more sense to make that clear rather than intentionally misdirecting the debate in your first post.

Fundamentally it's a waste of time policy. Anyone who will genuinely struggle to get a 5% deposit is almost certainly going to struggle to meet bank affordability criteria, especially as banks will be very wary about lending to anyone who is putting none of their own money into a property.

Politically I think the government got the vast majority of the benefit from the original HTB scheme. HTB2 seems to have cost them as much or more, via criticism of encouraging a bubble etc, than it gained them. There's no reason to think a further expansion would help them at all.

CLAPTON

Graham_Devon wrote: »

Simply that those without help from mum and dad can not neccesarily afford the 5% deposit and are therefore "locked out of the schme".

Though someone with wealthier parents find themselves able to tap into the scheme.

Therefore the "complaint" as it were is that HTB isn't helping the people it should be helping. It's instead helping those who could have used the same parents to stump up a deposit for a more traditional 10% deposit.

All this was suggested on a local radio station by a local councillor. Apparently they want to put it to the government before the next budget, which seems a little late. Basically it's a local issue, with even a 5% deposit being out of reach for the majority without other help in the south west. Therefore, the idea is the government "give you" the 5% deposit and then lend the other 20% of the loan under HTB. So it's basically movign HTB to a 100% scheme, just via two loans, instead of one.

This would mean that anyone who could afford the mortgage payments can make use of the scheme, rather than only those with wealthy parents.

It's highly unlikely this will go anywhere....yet. But as house prices accelerate ahead and the 5% deposit for HTB becomes unaffordable for more and more, with an election to win, and a possible "peak to quickly" I could see something like this being announced within the next year to help "hard working families".

just taking Plymouth as an example, rightmove says there are 292 properties below 100,000 and 95 below 70,000

are you really sure, two hard working people in Devon can't save between 3,500 and 5,000 between them ?
over 2 years that between 145 and 208 per month?

if not, can they afford to pay the mortgage / council tax etc?

Graham_Devon

N1AK wrote: »

A councillor in an expensive borough suggesting the idea does not a plausible policy change, or manifesto pledge, make. It seems you're actually asking about whether it is politically plausible rather than a good idea, so it might have made more sense to make that clear rather than intentionally misdirecting the debate in your first post.

I didn't "intentionally misdirect the debate". Well at least I don't think. I simply asked "should the government do this". I didn't particularly want to get caught up in the minute detail from post 1.

Graham_Devon

CLAPTON wrote: »

just taking Plymouth as an example, rightmove says there are 292 properties below 100,000 and 95 below 70,000

are you really sure, two hard working people in Devon can't save between 3,500 and 5,000 between them ?
over 2 years that between 145 and 208 per month?

if not, can they afford to pay the mortgage / council tax etc?

Plymouth is but one area of Devon. There are some seriously deprived areas in Plymouth too....most, incidentally, set for major improvements.

While what you say about the house prices is true, most will not want to buy there. A lot of those places go to investors whom then tap into the council for tenants.

There will be pockets of cheap houses up and down the country, at a guess, for the very same reasons as to why the pockets are cheap in Plymouth.

N1AK

Graham_Devon wrote: »

I didn't "intentionally misdirect the debate". Well at least I don't think. I simply asked "should the government do this".

Reading back over it, I agree that you didn't my apologies.

CLAPTON

Graham_Devon wrote: »

Plymouth is but one area of Devon. There are some seriously deprived areas in Plymouth too....most, incidentally, set for major improvements.

While what you say about the house prices is true, most will not want to buy there. A lot of those places go to investors whom then tap into the council for tenants.

There will be pockets of cheap houses up and down the country, at a guess, for the very same reasons as to why the pockets are cheap in Plymouth.

which areas would you like me to research?

Graham_Devon

N1AK wrote: »

Reading back over it, I agree that you didn't my apologies.

No problem....and may I say, it's so refreshing to receive well written critism which is actually in context with the discussion.

Graham_Devon

CLAPTON wrote: »

which areas would you like me to research?

Well....the councillor is discussing the south west as a whole.

It's alright listing 200 properties or whatever in a deprived area of Plymouth as some kind of solution to the issue, but it doesn't even touch the tip of the iceberg.

Devon is much more than just Plymouth. The South West is much more than Devon.

The South West itself has an average price of £229,000 according to rightmove (sold prices). Terraced properties have an average sold price of £188,000. The average salary is £21,563.

So if you wish to start calculating stuff, I guess that might be a good base point? Though I'm not sure we need to calculate anything in honesty. We all know, just at face value the South West has a relatively high house price compared to wages.

CLAPTON

Graham_Devon wrote: »

Well....the councillor is discussing the south west as a whole.

It's alright listing 200 properties or whatever in a deprived area of Plymouth as some kind of solution to the issue, but it doesn't even touch the tip of the iceberg.

Devon is much more than just Plymouth. The South West is much more than Devon.

The South West itself has an average price of £229,000 according to rightmove (sold prices). Terraced properties have an average sold price of £188,000.

So if you wish to start calculating stuff, I guess that might be a good base point? Though I'm not sure we need to calculate anything in honesty. We all know, just at face value the South West has a relatively high house price compared to wages.

so if average terrace is 188,000 what would one reasonably expect a young FTB couple to target? 120,000 say?
how many years is it reasonable to expect a couple to save for a deposit 2, 3, 4, 5 years?