Government unveils cheap mortgage plan for First Time Buyers

Pal

Personally I think that having non-means tested support for first time buyers is a great idea. My new plan is to wait until April 2006 along with all the other "first time" buyers. By that time house prices should have fallen about 50% (why would anyone buy in the meantime?) and I can then use the £200k+ equity from the house I sold last year to buy another house, part subsidised by the Government.

Fantastic.

(Obviously the devil will be in the detail, and I agree with previous comments that this proposal is going to screw the housing market up one way or the other).

rchddap1

I am the owner of a shared ownership 2 bed house (40% to be exact). At the time it was a god send as this was the only way that we could get a foot on the housing ladder. So seems logical that I would think this a good idea....wrong. I hate it.

To me this looks like a way to prop the housing market up. If FTBers can't afford a house then it is doubtful that a few years down the line that they will be able to afford to upgrade to a better house (just like me). If old Gordon wants to help FTBers then house prices must come down in relation to income / salary.

Don't get me wrong, I love our little house and I am so happy that I got the chance on the shared ownership scheme, but at the moment we're stuck here. Yes we have a bit of equity, but house prices around us are far higher than we can realistically afford...even when factoring in the equity in our own house. I'm having visions of 2 housing markets here, rather than just the one we have now.

alanobrien

This is a very interesting development in an already horribly confused market.

I can't help thinking that it would have been a lot fairer and more meaningful if he had just reinstated tax relief on mortgages.

Then again that would have cost real money.

Pal

or even better, abolished stamp duty on house price purchases.

mango1966

Pal wrote:

My new plan is to wait until April 2006 along with all the other "first time" buyers. By that time house prices should have fallen about 50% (why would anyone buy in the meantime?).

What do people think about the statement above. Of course being a FTB, any stagnation/reduction/crash would help me out but there seem to be a number of you who feel it will push prices up.

Maybe, as i tend to skip read through some of these I am missing the point, but how would they go up if a number of people are helped on to the ladder by the govt. Would that not make less demand for 'full price houses'?

meanmachine_2

The devil really is in the detail.

It's going to help 20,000 FTBers a year. Big whoop.

And you can be sure the banks will impose "special rates" (ie non-competitive) ones on those foolish enough to buy into the scheme.

But Pal is right. The market's already dying. THis has killed it stone dead. Which FTBer in their right mind is going to buy now, when there's a chance Gordon will help them out?

Fact is, Labour have no intention of helping FTBers, but every intention of propping up a massively inflated property market. Of course, it's doomed to failure.

I see hometrack have posted house price falls for the 11th consecutive month. That's the best way to help FTBers - leaving well alone. or else imposing sensible lending restrictions on banks.

Pal

mango1966 wrote:

Of course being a FTB, any stagnation/reduction/crash would help me out but there seem to be a number of you who feel it will push prices up.

It is dangerous to assume that a house price crash will help anyone. If house price crashes result in lower consumer spending, a lot of people are going to lose their jobs, including many of the people who are now so eager to own a home for the first time. It is very difficult to buy when you are unemployed or stuck in a low paying job because the economy is in trouble.

A healthy correction might be a good thing for the economy in many ways, but be careful what you wish for, it may come true.

mango1966

Was written kind of tounge in cheek, but point taken old bean

purplefirth

Its about time us FTB got something. All our salaries have gone on paying for others to have kids, dole pushers and foreigners. I think that people who don't break the law, work hard, are sensible with their cash, but don't earn enough to get a mortgage but can still manage to pay rent of £700 and upwards a month need a break. It's about time something was done. I live in Sussex where every other house has been bought by holidaying Londoners. There is no way any first time buyer has a chance without some kind of help and seeing as you either have to have come out of jail, be certified mad, a single mother or single and pregnant there is no help. It seems it doesn't pay to have common sense, stick to the law and try to do things the 'right' way. Personally unless the govt does finally decide to help people in my position I'll be lining the pocket of some very greedy lanlord until I retire, and then what, on the street I suppose for all my efforts. Ta

meanmachine_2

Then why Purple are you not demanding that second homes are made illegal, or else subject to punative taxes?

That would help you MUCH more than a token scheme to bribe a few dozen FTBers to take on massive loans.

The fact is, this government has raided pensions and left homes as the only source of equity. Once that goes, in the way of a crash, the entire UK economy is down the crapper. Hence this last ditch scheme.

Far too little, far too late.