HTB - Have you lost/made money?

littlegreenfrog_2

marksoton wrote: »

Indeed. So why question the investment value? If it's a home that's irrelevant...

If, like me, you're looking for a starter home but will want to have a family in the next few years, a fall in property prices could put you in negative equity, making it very difficult for you to move to a bigger property to accommodate your growing family.

If, on the other hand, you've got an equity loan from the government, a sharp increase in property prices could have a serious impact on the amount you have to repay in five years' time.

Just a couple of reasons why it might matter.

marksoton

littlegreenfrog wrote: »

If, like me, you're looking for a starter home but will want to have a family in the next few years, a fall in property prices could put you in negative equity, making it very difficult for you to move to a bigger property to accommodate your growing family.

If, on the other hand, you've got an equity loan from the government, a sharp increase in property prices could have a serious impact on the amount you have to repay in five years' time.

Just a couple of reasons why it might matter.

So don't procreate beyond your means?

littlegreenfrog_2

marksoton wrote: »

So don't procreate beyond your means?

Let me rephrase. I'm 30 years old. Let's say I buy a one bed flat because that's all I can afford right now. Suddenly there's a crash and five years later I'm still in negative equity. I don't have space for a child in my one bed flat but time is running out for me to have a baby.

This is genuinely something which keeps me awake at night, and snide comments such as yours don't help. I'm not a single mother of eight from "Benefits Street". I'm a 30 year old university educated higher rate taxpayer, and frankly I don't think I should have to worry about whether I can afford to have a child.

marksoton

littlegreenfrog wrote: »

Let me rephrase. I'm 30 years old. Let's say I buy a one bed flat because that's all I can afford right now. Suddenly there's a crash and five years later I'm still in negative equity. I don't have space for a child in my one bed flat but time is running out for me to have a baby.

This is genuinely something which keeps me awake at night, and snide comments such as yours don't help. I'm not a single mother of eight from "Benefits Street". I'm a 30 year old university educated higher rate taxpayer, and frankly I don't think I should have to worry about whether I can afford to have a child.

I actually agree with you right up until the bold.

You should worry, big time (trust me) Either you can or you can't. HTB shouldn't dictate your child choices.

AdrianC

littlegreenfrog wrote: »

I don't know who you are, but from your posts I'm guessing you are probably the baby boomer generation.

You're wrong. FWIW, I'm not much more than a decade older than you.

Attitudes like this are precisely why the young are starting to resent - and even loathe - your generation.

Well, that and the wild generalisations.

you suggest that we're an entitled generation who want something for nothing, don't understand the true value of money and simply don't have the work ethic and self-restraint that people like you obviously had when you were our age.

If the cap fits.

Look, you appear to be shooting the messenger here. But let's look at some numbers, shall we?

Let's consider Jon's £275k property. 5% HTB means that the taxpayer loaned him £55,000 and he saved up £13,750, leaving him with a nice comfy-rate 75% mortgage for £206,250. We'll ignore the various fees for the moment.

That's a repayment of about a grand a month. A quick play with a typical mortgage affordability calculator shows that a take-home income of about £3,500 or more would be required for that.

Let's assume that rent was 25% more than that mortgage - £1,250/month - and that it was just unrealistic or even impossible for Jon and his family to rent anywhere for significantly less than that.

How much of that other £1,750 was being saved every month? It's really not hard to see how a 90% mortgage, with another £13,750 deposit, could have been achievable with <say> an extra three year's saving, is it? Less than £400/mo? That's about the same as the monthly payments on a fairly prosaic car and a smartphone contract or two.

FWIW, I happen to think that the HTB Equity Loan is a good scheme - so long as you remember that any increase in value of the 20% is actually only a quarter as much as the increase in value of the asset it enabled you to buy, and so long as you remember that the point was to make the unachievable achievable, not as some kind of subsidised money-making scheme.

...frankly I don't think I should have to worry about whether I can afford to have a child

So who should be paying for your reproductive choices?

littlegreenfrog_2

marksoton wrote: »

I actually agree with you right up until the bold.

You should worry, big time (trust me) Either you can or you can't. HTB shouldn't dictate your child choices.

OK... but like I said, I'm a higher rate taxpayer. I earn around £20k more than the average wage.

We have a rapidly ageing population. The baby boomers are likely to live 25-30 years after they retire, so we're going to need a lot of care workers and doctors and nurses, and an army of taxpayers to fund it all. The baby boomers are also probably the most likely people to object to hordes of immigrants coming over here to do all those jobs.

So we need people to have children. On average, we need each person to have two children.

If people like me are worrying about whether we will be able to afford it, or putting it off until we think we can afford it and then finding out it's too late, we are going to be facing some very very serious problems in years to come.

littlegreenfrog_2

Anyway, I don't want to derail this thread. I just wanted to point out that it is perfectly valid for the OP to question whether the purchase that he's about to pour his life's savings into is a good investment or not.

AdrianC

littlegreenfrog wrote: »

Anyway, I don't want to derail this thread. I just wanted to point out that it is perfectly valid for the OP to question whether the purchase that he's about to pour his life's savings into is a good investment or not.

Of course it is. Only a fool would buy a house that was over-priced.

But that's a very different question to how much money HTB can make you.

littlegreenfrog_2

AdrianC wrote: »

So who should be paying for your reproductive choices?

I don't know, who do you think should be paying for your medical care in your retirement? Unfortunately it's likely to be me and my children, so let's not screw them over too much, eh?

I'm not going to bother responding to the rest of your post other than to confirm that I can work the maths out perfectly well, thanks.

marksoton

littlegreenfrog wrote: »

OK... but like I said, I'm a higher rate taxpayer. I earn around £20k more than the average wage.

Me too. As does my partner.

But both of us have very different properties. One size does not fit all.