HTB - Have you lost/made money?

Jon_B_2

AdrianC wrote: »

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?

I'm a taxpayer too. A higher rate one in fact.

The government won't lose out. The £55k they put in, they will currently get £60k back. In he current climate it is actually a sound investment.

I have no reason to thank my fellow taxpayers. Shall I ask my friend with cancer to thank me for using the NHS?

LeoTLion

AdrianC wrote: »

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?

I'm sorry, but this is just plain wrong.

Do you thank everyone you meet for providing you a pension in the future or for contributing to the NHS in case you are ever in need treatment?

We pay our taxes and then the people we elect decide where those taxes are best spent. To suggest people who benefit from those decisions to 'thank' you is nonsense.

littlegreenfrog_2

AdrianC wrote: »

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?

Perhaps you'd also like to thank me and all the other savers who have been subsidising your mortgage since 2009?

hypermuppet

OH & I have been renting at £825/month, and finally have saved enough for 5% deposit on £170k house.

Options were:
a) continue renting to save for bigger deposit
b) buy with 95% LTV
c) buy with HTB EL 75% LTV

Assuming that disposable income for rent/mortgage + savings is £1000/mth (Ours is actually a little higher than this, but £1k is simpler to demonstrate)

a) Start of year 1 £8,500 saved, 175/mth added to HTB ISA, by yr 5 would have £21,625 inc bonus

b) Mortgage of £161,500 at 4.6% 5yr fix £900/mth, by Year 5 if house value rises to £200,000, Equity of £52,000 plus savings/overpayment of £6000 = £58k
If house price falls to £150,000, £2k equity + 6k savings/overpayment = £8k

c) Mortgage of £127,500 at 2.9% 5Yr fix £600/mth, by Yr 5 if house value rises to £200,000, Equity of £51,000 + savings/overpayment of £24,000 = £75k
If house price falls to £150k, £11k Equity + £24k savings/overpayment = £35k

(None of the above takes into account interest on savings/overpayments - figures are approx)

HTB EL however gets more expensive after this point, but by now you should be able to move up the housing ladder with your (good case) £75k deposit on a £300k property 75% LTV, or worse case remortgage at 80% LTV to pay off the EL.

To address people's concerns regarding taxpayer money. This is not a government handout/subsidy, the government will have a 20% charge on my property. The taxpayer will only lose out if house prices fall. And even if house prices fall to £150k (in this example), yes the taxpayer loses £4k, but we will lose out by £16k too!! (Btw, my OH & I are taxpayers too, and will pay massively more than £4k in tax over the next 5yrs). But chances are house prices will continue to rise,so is more likely to increase revenue which can be used to spend on hospitals, teachers etc. etc. So maybe you other taxpayers should be thanking us for letting you share in the profits of our homes!

The above highlights the thought process we went through before deciding down the HTB EL route, this is not, in any way, shape or form, advice.

Jon_B_2

I wouldn't worry too much about the government subsidy comments. It's quite apparent there are some vocal and unfortunately uninformed individuals on this forum regards HTB and new builds in general.

Most people, if they investigated HTB-EL carefully would realise that it is not a subsidy, that the house buyer and government win in the majority of cases, plus it has stimulated further housing development supply. Even if that is demand driven.