HTB - Have you lost/made money?

littlegreenfrog_2

Person_one wrote: »

The uncertainty of private renting when you've got children in school must be a nightmare. If a private rented house could really be a true home, where you could relax a bit, I agree that people would probably be less keen to buy. Being able to feel settled in your home is one of 'the important things in life'! Social housing used to provide that for lower earners too, but sadly that's a distant memory for most.

For me, the fact that so few private landlords are willing to accept tenants with multiple dogs means it would never be a satisfactory long term option.

Agree 100% with this.

Renters have very little security of tenure in this country. Once your fixed term is up, the landlord can increase the rent if they want to and you have to either pay more or move out. If the landlord decides they want you out for some reason, there is very little you can do.

Once you've bought a house somewhere, provided you can make the mortgage repayments, you can stay there as long as you like. With renting there are too many variables.

I don't have pets so that's not a concern for me, but the idea of having kids in a local school and then having to move because the rent is going up and you can't afford the area any more is awful.

Other countries give tenants much better rights, and maybe it wouldn't be so bad to raise a family in a rented house or apartment elsewhere. But here in the UK, I really wouldn't feel comfortable starting a family if I had to rent. The instability that comes with renting is enough of a pain when you only have yourself to worry about. Add children into the mix and it becomes a much bigger problem.

leveller2911

The irony in all this is that HTB schemes have helped to prop up the house values and in many cases prevented people from being able to afford to buy them.

Actually it perverse that a scheme designed to help people to buy a house they can afford is actually (in many cases) stopping them from buying and If there were no such schemes then the housing ladder would stall and grind to a halt. People then have a choice ,they either stay where they are or they drop their prices and make their houses more attractive, ie it becomes more of a buyers market.

We obviously need a massive house building project which won't happen anytime soon because if the Govt did build 1 million houses then prices would drop due to supply and the builders would make less profit.

The only way out of this is for the Govt to compulsory purchase land at a peppercorn rate and build low cost affordable houses that are actually affordable and slap on a covenant restricting future profit on any sales. You can easily build a modest 3 bed semi for £100-120k and all the time its left to private businesses to build the houses we need the problem will only get worse..........And I'm a capitalist and about as far from a leftie as you can get.

Slightly off topic but what the hell.......

fashionvictim

I believe if a house is valued under it's for sale price and help to buy is to be used, then it cannot be sold for more than the valuation amount. So if price has come down could be due to a lower valuation on that property type?

Personally I foresee lots of for sale signs on new build developments when the 5 year repayments on HTB kick in. This could crash property prices in it's self.

I'm not using HTB to buy our new build. We made a little money buying something that was rough but on the edge of a good area. It was not the house we wanted to buy 5 years ago and is in fact a flat, which we very slowly did up as we could afford it.

And I would of liked to start a family 5 years ago but we decided to wait until we could save more and earn more. And yes that is a scary decision when you are the wrong side of 30, but we wanted to be in a little house first.

We haven't found it easy. Especially being near-ish to London. Best of luck OP whatever you decide!

Jon_B_2

fashionvictim wrote: »

I believe if a house is valued under it's for sale price and help to buy is to be used, then it cannot be sold for more than the valuation amount. So if price has come down could be due to a lower valuation on that property type?

Personally I foresee lots of for sale signs on new build developments when the 5 year repayments on HTB kick in. This could crash property prices in it's self.

I'm not using HTB to buy our new build. We made a little money buying something that was rough but on the edge of a good area. It was not the house we wanted to buy 5 years ago and is in fact a flat, which we very slowly did up as we could afford it.

And I would of liked to start a family 5 years ago but we decided to wait until we could save more and earn more. And yes that is a scary decision when you are the wrong side of 30, but we wanted to be in a little house first.

We haven't found it easy. Especially being near-ish to London. Best of luck OP whatever you decide!

Repayments of HTB? You mean that peppercorn interest payment? Even if I decided to not remortgage the equity loan after 5 years. The interest payment on the £55k I was lent would only be around £70/month.

Hardly going to have hoardes of people selling up, I'm sure.

AdrianC

Jon_B wrote: »

Repayments of HTB? You mean that peppercorn interest payment?

1.75%, increasing annually by RPI+1%.
Peppercorn the first year, sure - £80/mo - but increasing annually.
Typical APR 5.2%

Oh, and the full loan is repayable after 25yrs, even if you haven't sold the property - and a lot of people who took interest-only mortgages in the '90s, perhaps endowment-backed, are starting to find that the reality of ignoring that one looking them in the face.

Pixie5740

I read an article recently about those with HTB EL mortgages finding it more expensive to remortgage than those without the EL and some getting stuck on their lender's SVR. So there could be hidden costs for HTB EL when the initial fixed term deal ends.

http://www.thisismoney.co.uk/money/mortgageshome/article-3038831/Help-Buy-borrowers-risk-missing-best-remortgage-deals.html

Jon_B_2

Which goes back to my original point that so long as you go into HTB EL with your eyes wide open and a clear exit strategy - you will be fine.

My choice was to overpay the mortgage significantly in the first 5 years and then when my fix ends, remortgage the equity loan into our existing mortgage and hopefully still be somewhere around 75% LTV.

I do appreciate there are probably a large proportion of HTB EL owners who don't have a clue what it means and no doubt we will see "HTB Mis-sold?" Threads on here in years to come.

AdrianC

Jon_B wrote: »

My choice was to overpay the mortgage significantly in the first 5 years and then when my fix ends, remortgage the equity loan into our existing mortgage

Which makes me wonder if you needed the HTB EL, or if it was just a cheap bit of finance for you?

Jon_B_2

AdrianC wrote: »

Which makes me wonder if you needed the HTB EL, or if it was just a cheap bit of finance for you?

Cheap finance - if I am honest. A 95% mortgage at 4.8% or a 75% mortgage at 2.84% - no brainer?

To be honest the stamp duty changes helped me more as I wouldn't have spent a bean over £250k on a house beforehand. My opinion would be that this has done more to boost HPI than HTB.

AdrianC

Jon_B wrote: »

Cheap finance - if I am honest. A 95% mortgage at 4.8% or a 75% mortgage at 2.84% - no brainer?

Full marks for honesty - perhaps you'd be so good as to thank all of the rest of us tax-payers for subsidising your mortgage with money that could have been used for other government expenditure?