Government unveils cheap mortgage plan for First Time Buyers

The_Biff

Can I be the first to thank Gordon Brown. Well done. I wish you had been around when I was a first time buyer.
We managed by living in 1 bedroom (5 of us) & renting out the rest of the house. Great times!! We slowly took over the rest of the house. And we still keep in touch with the tenants - even though this was 30 years ago.
Would have been easier with a subsidy.

meanmachine_2

The_Biff wrote:

Can I be the first to thank Gordon Brown. Well done. I wish you had been around when I was a first time buyer.
We managed by living in 1 bedroom (5 of us) & renting out the rest of the house. Great times!! We slowly took over the rest of the house. And we still keep in touch with the tenants - even though this was 30 years ago.
Would have been easier with a subsidy.

It's not really a subsidy though.

All that happens is you end up paying rent to a landlord (in the form of Gordon Brown) as well as the bank.

It's not free money. It's just another type of student loan to hang around the necks of young people and keep them in debt for the rest of their lives.

Jeez. At this rate kids will be born into debt and die in debt.

slater14

Well, done my trawl of 15 property related sites this morning after Gordy was on with Frost.

This idea has been roundly panned by everyone of them!

The BTL brigade - fear losing tenants and thus will sell up - crash!

Homeowners -dont see how it helps them and will have to reduce price to compete with new builds (to which this scheme applies) - crash!

Ecnonmists - are worried about the extent of government borrowing and ultimatley interest rates rising to cover this unforseen and unplanned expense - crash!

Sold to Rent - now see themselves as isolated from government and squarley kicked in the teeth and refusing to buy into a market which is being propped up artficially by HMG - crash!

General - lots of grumbling about "I dont qualify" "why now" "its not fair" "I'm going to wait".....crash!

Gordy really hasnt thought this one through very well at all. The despicable part of this plan (besides all of it!) is that Gordy plans to pay the "INTEREST ONLY" on 50% of the cost - this is leading the masses to believe IO is a "normal" way to buy your home. It isnt. It is high gearing tool to profit from a rising market - NOT something which should be tried with your own home IMHO.

dippy

If the scheme applies only to new builds, this would greatly help FTBs and the house building firms while minimising the impact on the rest of the housing market.

FTBs would no longer go after old properties but they were already priced out of that market, weren't they?

meanmachine_2

dippy wrote:

If the scheme applies only to new builds, this would greatly help FTBs and the house building firms while minimising the impact on the rest of the housing market.

FTBs would no longer go after old properties but they were already priced out of that market, weren't they?

But what if you're the owner of one of these older properties and desperate to sell? Already you can't find a buyer, and now Gordon lures all FTBers away to new build sites...

Oh wait, I get it - house price crash!

Meh, doesn't sound so bad.

I do think FTBers should be tagged in some way and put on a reservation, choked to the gills with new build properties. That way those superior types already on the ladder don't even have to look at them.

dippy

If house price crashes are your cup of tea, apparently the scheme will start in April 2006. Gordon brown has just ensured that quite a few FTBs will hold off purchases for a year till they can get their "cheap" mortgages.

MarkyMarkD

dippy wrote:

If the scheme applies only to new builds, this would greatly help FTBs and the house building firms while minimising the impact on the rest of the housing market.

FTBs would no longer go after old properties but they were already priced out of that market, weren't they?

Eh?

I can think of lots of areas where the new builds are the expensive properties and the older properties are the cheaper ones. So if this daft scheme only subsidises new build (and I can't even be bothered to read about it, as it's obviously a stupid idea) then it won't help AT ALL in those areas, except to encourage the "richer" FTBs - precisely those who don't need the help.

dippy

Well, at a "nominal rate of up to 3% interest" on their share, the government is becoming a very generous landlord. If you're allowed to buy say only a 25% share in the new-build, can't they become a lot more affordable to the FTBs that the older properties?

andy88_2

How about some sponsored co-operative self-build schemes? The land is provided by council or government and rented. People then finance the building and put in a certain amount of time to a joint scheme.

budgetflyer

I believe the concept is sound. Rent to buy. Must be better than rent to own nothing.
EQUITY in this day and age is everything.Oportunities are so much greater if you have EQUITY.If you dont have EQUITY then you dont really have anything as far as banks are concerned. You can use your EQuity to make you or destroy you. Its your choice. If you dont have it, then you dont really have the choice IO