Twenty years on – the winners and losers of Britain’s property boom

redux

CLAPTON wrote: »

these compulsory purchases
these 10,000 repair bills
the rehousing options

are these run by central government?
or by local councils?

A Conservative council in Greater London.

The redevelopment is a cooperation between a commercial company, the local council and a housing association.

The 40% loan Help to Buy scheme for London is an initiative by national government.

Thrugelmir

redux wrote: »

Yeah, but why is Osborne investing taxpayer funds in shoring up the market?

Construction provides training and employment. Economic activity. Tax revenues.

The UK needs houses and flats built, and people to be able to buy them.

What's Corbyn's plan. Nationalise the house building industry?

mwpt

cells wrote: »

The UK needs a return to honest self cert 90% interest only mortgages. The type you tick a box to say 'I am confident I can service this mortgage' not the type where borrowers needed to lie

What interest rate would you charge to such a borrower, if it was your money being lent?

What interest rate do you think most people would charge to such a borrower, if it was their money being lent?

redux

Thrugelmir wrote: »

Construction provides training and employment. Economic activity. Tax revenues.

The UK needs houses and flats built, and people to be able to buy them.

What's Corbyn's plan. Nationalise the house building industry?

I didn't assert that Corbyn has a plan.

Note my opinion already stated in that post that none of the political parties have got this right.

CLAPTON

redux wrote: »

A Conservative council in Greater London.

The redevelopment is a cooperation between a commercial company, the local council and a housing association.

The 40% loan Help to Buy scheme for London is an initiative by national government.

no examples from socialist councils?

cells

mwpt wrote: »

What interest rate would you charge to such a borrower, if it was your money being lent?

What interest rate do you think most people would charge to such a borrower, if it was their money being lent?

If there was a pool of say 1000 borrowers who put 20% down on self cert mortgages I would lend to them at 0.5% above those who have 20% down and not self cert.

cells

redux wrote: »

Yeah, but why is Osborne investing taxpayer funds in shoring up the market?

Help to Buy, it's supposedly called, but if the government are offering interest free money into a scheme they are financing with these tens or hundreds of millions they are probably not expecting their share of the value to drop.

There are some even odder schemes than the 8 weeks notice to tenants someone mentioned above. In some places some people are being compulsorily purchased out of a home they've owned for 20 or 30 years, then offered a new dwelling that costs 2.5 times as much. £175k to £420k, how can I get a mortgage for that at my age, asks an 85 year old.

Worse still, some property owning leaseholders being compulsorily bought out were being stuck with £10,000 bill for repairs, only 8 months before the building is due to be demolished.

And the lease and maintenance fees are due to nearly treble from £800 to £2300, another pensioner pointed out.

I have mixed feelings about this, as someone I know is looking at a new flat in a certain place, and looking it up brought me back to a bit of TV programme I remembered from a while back, which coincidentally is the same area.

Jeremy Corbyn stands up in Parliament and reads out of couple of letters from people worried about how on earth will they afford to stay where they are when the area is redeveloped. In reply Cameron completely ignores the point and instead mocks him, saying don't you want to help people buy a house.

Turfing an 85 year old out of a house she's owned for 30 years and offering another with quarter of a million shortfall on the price, and the lease fees trebling, doesn't quite fit Cameron's description.

Cameron did a speech from a scheme in Poole about a year ago, about how the government is helping people to buy. Small 3 bedroom house now on sale there for £350,000. That doesn't quite fit his description either.

Another point occurs to me. Then government is stepping up the interest free loan proportion for Help to Buy in London to 40%. I wonder if any discount schemes have been arranged with developers, such that the government gets its 40% for say 33 or 36%. It might not be possible to find out, as some details are commercially sensitive and thus secret

Maybe they should also consider giving interest free terms to the people who have owned a house for 30 years and been turfed out of it and now can't afford more than 40% of a new one.

I also wonder what Help to Buy is like when the interest free period runs out after 5 years. 1.75% fee on the government share, which might be about akin to the mortgage rate. But the principal still owed is also accelerating by RPI plus 1%. I wonder if that will still be locked in even if the housing market actually falls, if the property speculators from China and Hong Kong get bored with London and look elsewhere.

None of our political parties have got this right, but maybe we are on strange ground when the current government is not only making the rules but engaging in property speculation on its own account as well as the limited proportion of the population people it thinks or says it is helping.

Again are you sure about any of that?

Compulsory purchase from what I understand is done on value of the property plus 10% compensations plus various other compensations on top

Is that really unfair? Getting 10% more + other perks on top of what you would get if you had gone to the estate agent?

I understand you may not like that a pensioner might have to move two miles further out of the city centre but that's no reason to not develop a sink estate and add lots of needed additional homes. The pensioner is nice and visible you can point to them bit what about the people who will be housed in the homes that will be built?


Anyway. I think I am with Hamish on this one. No need for government schemes of various colours just return to interest only self cert underwritten by rental cover for anyone with 15% or more deposit

mwpt

cells wrote: »

If there was a pool of say 1000 borrowers who put 20% down on self cert mortgages I would lend to them at 0.5% above those who have 20% down and not self cert.

So you personally, right now, all other investment opportunity considered, would lend your money out at about 2.65% interest rates to a self cert mortgage pool?

Personally, I'd need about 6% returns to do this and even then it would be a small chunk as part of a diverse portfolio.

redux

CLAPTON wrote: »

no examples from socialist councils?

I don't know. They may well also be looking at 50 year old estates and coming up with a range of options, pessimistic about the prospects, and taking 10 or 12 years to make up their minds.

But I was only discussing one particular example of which I'd seen some details, where redevelopment comes at the cost of including less social housing than originally hoped for, new properties costing 2.5 times the current values, national government subsidising interest free terms to new buyers but perhaps not to dispossessed existing owners.

I'm much more on the fence than you might assume. Someone I know might become one of the new owners there. The purchase might involve government Help to Buy loan of 40% interest free for 5 years, mortgage of about 40% of the value, parental loan, and own savings partly proceeds of estate or gift from grandparent generation.

Clearly not everyone can be this fortunate, and although she tallies a bit with Osborne and Cameron claiming to make housing more affordable, I don't think their initiatives stretch across everybody when they seem to be talking about properties costing quarter of a million and more as affordable housing, and the government subsidy may well be helping push prices upwards (the government's Help to Buy share may lose money if housing prices fall).

cells

mwpt wrote: »

So you personally, right now, all other investment opportunity considered, would lend your money out at about 2.65% interest rates to a self cert mortgage pool?

Personally, I'd need about 6% returns to do this and even then it would be a small chunk as part of a diverse portfolio.

I am a net borrower so I don't have any net savings to lend out. If I were a net saver I would lend to self cert 20% down at a slight margin to non self cert 20% down.

But of course the smart thing to do is do a bit of lending get in some default and arrears data and price the products accordingly. Not to ban them due to some misguided government or regulator policy