Your opinions on how the government can help first time buyers

dean_ham

I am a first time buyer aged 19, the property prices in my area have increased by 3-4 times over the last 3 years and in my opinion the governent arent doing enough to help us! I dont belive that this part mortgauge is the way forward to be honest i can see that people will never own their homes if current trends continue.


In my opinion the government should

Tax any profits made on homes i.e
If home is owned for less than a year, profit on that home should be taxed 50%
2-4 years 30%
5-7 years 15%
7+ years 0 %

etc etc


Specify a date, i.e 1st Jan 2006.
Tax on rent received if you own more than say 2 homes under your name.

All tax raised on the above should be put back into building new homes and rundown areas (like that area in liverpool on tonight with trevor mcdonald)

Any ideas/opinions?

slater14

Its called market forces.

Homes can fall in value as well as rise.

Do you propse the government pays back the tens of thousands of pounds that is likely to be wiped off the price of a house in the next two years? Would I get a rebate for "going negative" which I could offset against my income tax return?

A government has no place interfering with the market. If they chose to step in and stop this madness - one must ask yourself why they didnt feel the need to step in and stop the pensions fiasco or the endowmnet scandal or the last stock market black Monday crash or the previous housing crash.

deemy2004

No matter what the government does it is the strength or weakness of the underlying economy that determines whether house prices are expensive or cheap.

We have had an extraordinary good economic run which has lead to an extraordinary strong bull run in house prices.

The only thing that will force house prices lower now is if the economy slows, and slows and slows... there ARE signs that the economy IS slowing and there ARE signs that the housing market IS cooling.

The problem for FTB's is that the window for getting cheap properties is very small.... say in a 10 year cycle there would be a 2 year window to pickup relatively cheap properties. Unfortunately that window is some years away from the present moment in time.

But cycles do repeat and as evidenced by RN Elliot , market systems follow a basic 5 wave advance and followed by a 3 wave correction, you could say we have had the 5 wave advance and are now to embark on a 3 wave correction.

Don't get me wrong... Elliot waves, as they are called are worthless when it comes to actually putting money on the line ...

MiserlyMartin

Well I see what you are saying. Trouble is any 'profit' in the (context I think you are referring to) is really just equity built up and ploughed into the next home when the owner(s) move. Non taxable.

However the government does tax obvious profits from 2nd or further homes when sold. Its called Capital Gains Tax. I think though you are allowed a three year period in which to dispose of the second home (or asset as they call it) before tax is payable. Its complicated to work with and the tax is tapered according to the time the asset is owned. I am no expert on this, I am just writing off the top of my head here.

JanCee

dean_ham wrote:

Tax on rent received if you own more than say 2 homes under your name.

Any ideas/opinions?

Rental income is already taxed and always has been.

bridiej

I dont think the government should have to do anything to help FTBs.

It's never been easy for them, when I bought my first house alone I was only earning £9,000 a year so couldnt borrow much. My parents lent me the money for the deposit, which I had to take a second job to pay back, and I struggled like mad just to keep a roof over my head.

It was the same when my parents first bought a house, they'd sorted their mortgage, signed all the details - interest rates werent too bad but they could only just afford the repayments. Then within a couple of weeks of it all being sorted the rates went up to 12% or 13%! Somehow they coped.

A few months ago there was an item on our local news about a couple who couldnt afford to buy a property so they'd ended up living in housing association accomodation, where you own a certain % and pay rent to the association for the rest. They interviewed the couple in their front living room, which included a big leather suite, enormous TV, stereo etc.

Thing is, when you first start out you dont have all the nice stuff. I had hand me downs and second hand furniture / appliances until I could slowly afford to replace the items one by one. I had no carpets in my house for 3 years as I just couldnt afford to buy them.

These days it just seems as though young people think a house is going to be handed to them on a plate, that they can still drive their flash cars, watch TV on an enormous screen, have the latest mobile phone, nights out getting lashed with their mates, at least one holiday a year, but it doesnt work like that, you need to save and sacrifice.

I dont agree that sellers should be taxed on their profits, where would be the incentive to improve your home? And how would a seller be able to move up the chain if a large chunk of their equity is taken from them?

There is affordable property in almost every area, OK it may not be in the nicest street or on the nicest estate but as a foot on the ladder it's a start.

I do think 19 is a bit young to be buying though, why not rent for a few years, it will give time for you to build your career and increase your earnings?

theGrinch

build cheap started homers on govt land or repair derelict housing stock much of which is owned by the government!

meanmachine_2

I can't speak for anyone's personal circumstance, but 19 seems incredibly young to be thinking about tying yourself down to a mortgage.

You do realise the average age of the FTBer is now 34 don't you?

Jeez, at 19 I wasn't earning a penny, I was at college. And when I graduated I think I was earning about £8K. Even in those days I couldn't have afforded a shoe box.

The point is, I'm in my early 30s, earn average wage, haven't taken a holiday since I was FIFTEEN and still can't afford a property. That is outrageous and, quite frankly, very worrying for the economy.

Hermia

bridiej wrote:

I dont think the government should have to do anything to help FTBs.

It's never been easy for them, when I bought my first house alone I was only earning £9,000 a year so couldnt borrow much. My parents lent me the money for the deposit, which I had to take a second job to pay back, and I struggled like mad just to keep a roof over my head.

I don't think it was quite as difficult in the past though. I mean my parents were normal, badly-off working-class people, but they managed to get a mortgage. Everything I've read on this subject (and I seem to spend my whole life reading property articles!) say that people didn't need such huge deposits in the past. I live in the South-East and my earnings are fairly average, but I would probably need to save £50K for a deposit. I live in a pretty grotty area, but most property is still very expensive. Rent in the area is about £500-600 for a shoebox. I will never be able to save enough for a deposit. I have looked into moving to other parts of the country, but my salary will come down...

Murtle

Hermia wrote:

I don't think it was quite as difficult in the past though. I mean my parents were normal, badly-off working-class people, but they managed to get a mortgage. Everything I've read on this subject (and I seem to spend my whole life reading property articles!) say that people didn't need such huge deposits in the past. I live in the South-East and my earnings are fairly average, but I would probably need to save £50K for a deposit. I live in a pretty grotty area, but most property is still very expensive. Rent in the area is about £500-600 for a shoebox. I will never be able to save enough for a deposit. I have looked into moving to other parts of the country, but my salary will come down...

a 50K deposit....that could be upto 50% of a mortgage even in the south-east, granted it might not be in an area you want to live but I didn't need a 50k deposit and my wage was average to low....for the area.



buying a place at 19....what kind of salary are you on?? and what kind of property do you think you should be able to afford??? I don't see anything wrong with buying a place at 19, if you have the salary etc that means you can afford it!!!

as for

In my opinion the government should

Tax any profits made on homes i.e
If home is owned for less than a year, profit on that home should be taxed 50%
2-4 years 30%
5-7 years 15%
7+ years 0 %

etc etc

hmm a big NO to that one....I plan to stay in my first time home for less then 7 years thanks...and potentially less then 5 years, that's why it's a First time home, not a 'family home'......

I'm afraid for all those who want to get on the property ladder it is often the case of living for a while where you don't want to live for ever. I'm certainly not where I want to be for ever, but for now, it suits me......

meanmachine_2

£50K is half the price of a house in the South East? Where do you live, South East China?

Can't believe I'm having this discussion again, but you MUST compare average wages to average house prices.

In London the average wage is c£30K, the average house in c£250K.

Any FTBer on average wage who has bought a below average house has just made the biggest mistake of their lives, if you ask me.

Average to average ratio is the mean trend which will ALWAYS be returned to. If not today, then some time soon.

If you're an FTBer on a below average wage, then by all means buy a below average house. Except....even then you can't afford it. Which is the whole problem.