Who will buy second hand HTB properties?

westernpromise

Something I don't get.

FTBs can get an interest free loan of 40% for five years on a new-build property. This is because FTBs can't buy property any other way.

When the FTB wants to sell this property, however, it's second hand and ineligible for HTB.

So...who's the FTB going to sell it to, given that as an FTB him/herself, it was only affordable with HTB? Won'the FTB just have to sell it for 60% of what was paid?

stator

Help to Buy Equity Loan is for new builds only. Help To Buy Mortgage Guarantee is available for second hand properties. Some banks offer 95% mortgages without help to buy. So once it's second hand the buyers shouldn't have a problem getting a mortgage, assuming the house price hasn't fallen.

On new builds it's possible the price may have fallen, that's why banks don't lend 95% on them, but prices could go up or down.

If the second hand prices on that estate are lower than expected the owner may be stuck in negative equity for a while, but the good news is that the government loses some of the money too as they own a percentage of the property and buying the rest of the house will be cheaper.

But generally there are plenty of buyers out there, so unless something drastic happens most people won't have an issue.

Not all new builds are bought under HTB!

AnotherJoe

westernpromise wrote: »

Something I don't get.

FTBs can get an interest free loan of 40% for five years on a new-build property. This is because FTBs can't buy property any other way.

When the FTB wants to sell this property, however, it's second hand and ineligible for HTB.

You've started with the assumption that only FTBers on the HTB scheme will be buying these properties as new, which is clearly not the case. Some will be, but some people will be able to afford to buy without HTB and they may not be FTB either. Those people will be able to buy them second time round just like any other property that is sold.

iantojones40

I'm fully expecting to see large scale debt forgiveness on these HTB "loans" if there is any danger of negative equity... got to keep on helping out the debt junkies.

Carl31

westernpromise wrote: »

Something I don't get.

FTBs can get an interest free loan of 40% for five years on a new-build property. This is because FTBs can't buy property any other way.

When the FTB wants to sell this property, however, it's second hand and ineligible for HTB.

So...who's the FTB going to sell it to, given that as an FTB him/herself, it was only affordable with HTB? Won'the FTB just have to sell it for 60% of what was paid?

It's just sold at market value. The financial situation of the FTB is irrelevant. Either they will have paid off some of the government loan, all of it, or none of it but on sale any % outstanding is to be repaid. So if they borrow 40%, and don't pay any off, they pay back 40%, which could be less than they borrowed, but , and I think this is George O's hope, after 5 years it will have increased and they give back more. The FTB s equity will be their initial deposit plus equity repayments to date, plus any capital gain on their remaining %, or loss