40% London HTB scheme

Electrum

HTB 2 will be 50% interest free loan for ten years, then when that stops working HTB3 will be the government will buy 50% of the house but you dont have to ever pay any of it back, you only have to come up with 50% of the asking price and if you sell then the government will have the 50% back.

I seem to remember something like this years ago.

Electrum

thequant wrote: »

Plenty of people out there at the moment trying claim they were miss sold interest free mortgages and claiming they didn't realise they would have to pay the principle back at the end.

Won't be long, before there are people claiming that they thought the government was giving away 40% of million pound houses for free.

Yes this is the big question, what happens when all these buyers have to start paying back the 40% as well as the rest of their mortgage at more normal higher interest rates?

padington

Electrum wrote: »

Yes this is the big question, what happens when all these buyers have to start paying back the 40% as well as the rest of their mortgage at more normal higher interest rates?

They'll sell to buyers that don't have to start paying back the new 50% loan.

It is a house of cards if you ask me but it has good while to run yet.

mwpt

(Quoted post removed by Forum Team)

I probably should have chosen a better word. The finances of shared ownership are not solid in my opinion. I think there are quite a few discussions around this already.

wotsthat

clairewych wrote: »

If you're aware of any could you link me to them? As a prospective FTB the various schemes are a minefield when trying to assess value for money vs affordability.

Here's a few http://bfy.tw/4E7B

I disagree with mwpt - scam was the correctly chosen word

Electrum

Yes scam is an appropriate word. Also desperate comes to mind.

MARTYM8`

(Quoted post removed by Forum Team)

Its not a scam as such.

However can you imagine any other industry where the Government would provide a 40% interest free loan to buy a company’s products.

I want to buy a new car – will the government give me a 40% interest free loan so I only have to pay interest on the 60%

The steel industry is going bust – shall we give their customers 40% interest free loans to buy British steel.

The retail sector is finding it tough – should the taxpayer give people 40% interest free loans to buy new furniture or televisions?

Should we give people interest free loans to buy shoes - they normally come with a shoebox. So if we can subsidise one type of shoebox – why not another?!:D

Essentially all that is being done is to help developers push up the prices of new builds – as the Government is effectively gifting the buyers 40% more money to buy their goods (a shoebox).

It is a quite extraordinary policy – yet no one questions it!

Electrum

MARTYM8` wrote: »

Its not a scam as such.

However can you imagine any other industry where the Government would provide a 40% interest free loan to buy a company’s products.

I want to buy a new car – will the government give me a 40% interest free loan so I only have to pay interest on the 60%

The steel industry is going bust – shall we give their customers 40% interest free loans to buy British steel.

The retail sector is finding it tough – should the taxpayer give people 40% interest free loans to buy new furniture or televisions?

Should we give people interest free loans to buy shoes - they normally come with a shoebox. So if we can subsidise one type of shoebox – why not another?!:D

Essentially all that is being done is to help developers push up the prices of new builds – as the Government is effectively gifting the buyers 40% more money to buy their goods (a shoebox).

It is a quite extraordinary policy – yet no one questions it!

Many here are questioning it.

There is so much to be questioned about all the desperate efforts to keep property prices propped up.

Questioning it doesnt make much difference, but its pretty easy to see the results- temporary propping up artificial high prices, until they cant be propped up anymore.

mayonnaise

clairewych wrote: »

Why is it a scam?

- shared ownership is by definition leasehold
- this lease will often be a short one (90/99 years)
- there is no statutory right on a shared ownership lease extension under the 1993 leasehold act.
- forget about lease extension if you haven't 'stair cased' up to 100%
- you'll be paying rent and service charges, but are 100% liable for maintenance and repairs on the property you part-lease/part rent.

Basically, it's renting without the advantages of renting.
Avoid at all cost.

mwpt

MARTYM8` wrote: »

Its not a scam as such.

However can you imagine any other industry where the Government would provide a 40% interest free loan to buy a company’s products.

I want to buy a new car – will the government give me a 40% interest free loan so I only have to pay interest on the 60%

You're talking about something else, the HTB equity loan.

Completely different to the shared ownership scheme which has several problems.