Cameron ready tp reconsider Help to Buy

Carl31

Jason74 wrote: »

This would imho be a very good plan. If the idea is to help HTBs, this limit would be sufficient for most FTBs buying typical entry level properties outside London, while more or less ending the scheme within the capital.

Hard to see what's not to like about that idea.

Trouble is, due to the increased prices, the time taken to buy a house is now longer, so FTB are now older than previous, meaning their needs with regards to a first property may have changed

Also, due to being older, people may look for a property to buy and retain until they die, instead of working up the chain as has been the case historically. £200,000 wouldn’t get anything much other than a flat round our way, and we don’t live in london

cepheus

wymondham wrote: »

is this info available anywhere does anyone know as it would be a good insight...

Here we are:

“the Prime Minister said. Let’s be clear: these are people who want to own a flat or house of their own, they can afford a mortgage and they can afford these mortgage payments even if interest rates were to change; what they weren’t able to do was to get together the big deposit that was required because they were only able to get a 60% or 70% mortgage.”

The average house price under the scheme is around £160,000 and 85 per cent of purchases are outside of London, he said.

CLAPTON

Carl31 wrote: »

Trouble is, due to the increased prices, the time taken to buy a house is now longer, so FTB are now older than previous, meaning their needs with regards to a first property may have changed

Also, due to being older, people may look for a property to buy and retain until they die, instead of working up the chain as has been the case historically. £200,000 wouldn’t get anything much other than a flat round our way, and we don’t live in london

but these people will have saved a decent house deposit if they are planning to buy their 'forever' property so won't be using HTB anyway

mayonnaise

CLAPTON wrote: »

one wonders how many HTB mortgages are over 200,000

Very few.

This article links to Halifax data on HTB mortgages;
http://www.everyinvestor.co.uk/news/2014/02/12/viewpoint-help-buy-causing-housing-bubble-7382/

Additionally, the average property value for their Help to Buy mortgage applications stood at £157,660 whereas the maximum size allowed under both the equity loan and the mortgage guarantee is £600,000. The fact that their average
is substantially below the allowable size indicates that the scheme is being used for standard sized loans. Even the average amount lent to borrowers in greater London is only £280,000.

A 200K limit on HTB sounds like a good idea.
Basically keeps the scheme intact and will throw a bone to the HTB frothers. Everybody happy.

N1AK

CLAPTON wrote: »

will such a restriction, increase the number of new builds or decrease them?

• Removing all building regs would increase house building, should we do it?
• Removing all restrictions on land for housing would increase house building, should we do it?
• Making rental income tax free would increase house building, should we do it?
• Making it illegal for children to live at home after 18 would increase house building, should we do it?

It's nonsense to think that the justification for a measure can be boiled down to something as inexact as whether one or more extra houses is being built because of it.

Clearly we're not building nearly enough houses now even with HTB and the myriad of other interventions by the government. Increasing house prices mean we're tying up our money in property rather than investing in businesses and other infrastructure and is continuing to increase housing benefit costs.

There is a clear market failure in property building in the UK; it is either due to developers hoarding to maximise profit or to excessive restriction on viable land. We need to address that, rather than pretending that messing around with money supply is achieving anything.

CLAPTON

N1AK wrote: »

• Removing all building regs would increase house building, should we do it?
• Removing all restrictions on land for housing would increase house building, should we do it?
• Making rental income tax free would increase house building, should we do it?
• Making it illegal for children to live at home after 18 would increase house building, should we do it?

It's nonsense to think that the justification for a measure can be boiled down to something as inexact as whether one or more extra houses is being built because of it.

Clearly we're not building nearly enough houses now even with HTB and the myriad of other interventions by the government. Increasing house prices mean we're tying up our money in property rather than investing in businesses and other infrastructure and is continuing to increase housing benefit costs.

There is a clear market failure in property building in the UK; it is either due to developers hoarding to maximise profit or to excessive restriction on viable land. We need to address that, rather than pretending that messing around with money supply is achieving anything.

house prices are largely determined by the supply and demand.

when proposals area made to limit house prices it is reasonable and proportionate to ask the question 'will that proposal increase or decrease new house building'.

it is not the only question that needs asking about the proposal

it is not the only action that can affect building and house prices

it is a necessary and reasonable question given a specific government proposal

your suggestions may well deserve debate and attention, but that was not the proposal on the table.

ukcarper

Carl31 wrote: »

Trouble is, due to the increased prices, the time taken to buy a house is now longer, so FTB are now older than previous, meaning their needs with regards to a first property may have changed

Also, due to being older, people may look for a property to buy and retain until they die, instead of working up the chain as has been the case historically. £200,000 wouldn’t get anything much other than a flat round our way, and we don’t live in london

The age of FTB is now higher but the reason is not price it's a complete change in lifestyle.

pbouk

CLAPTON wrote: »

no, he said what the interviewer wanted him to say

and 'struggle' has an uncertain meaning as in 'we will now only have 2 foreign holidays' and will 'have to run our cars for more than 3 years' etc etc

No he didn't because the reporter interviewed others who said different. Just because YOU don't agree with what he says, doesn't make it wrong.

CLAPTON

pbouk wrote: »

No he didn't because the reporter interviewed others who said different. Just because YOU don't agree with what he says, doesn't make it wrong.

I didn't see the interview
however, such interviews are purely to entertain and not to inform

was the person given sufficient time to give a measured response?
was there a proper discussion of what 'struggling' means to him?
did it include his calculations of the effect of a 1,2,3 % rise in interest rate in money terms?
did you see his detailed budget?

JasperMcGrab

The help to buy scheme was always madness. Now we are in the situation where withdrawing it makes it harder than ever to buy, and any withdrawal dumps billions of pounds of debt on the tax payer, not withdrawing it dumps even more but at a later date. Insanity, Osborne is a madman.