"Calls" to help HTB mortgage prisioners

Graham_Devon

There isn't a link or a story as such, just a combination of stories since the interest rate rise last week.

We appear to be seeing an increasing pool of people, now stuck with HTB mortgages. The problem being, in the main:

- Can't re-mortgage due to the HTB element, so stuck on higher rate SVR
- Can't sell as house now not worth as much as they paid (new home premium)
- Interest rate increase alongside the loan fee's kicking in.

There are hundreds of "advisors" and "experts" now out there suggesting people didn't fully understand what they were getting involved in when buying under HTB.

Some of them are even suggesting the government should step in and help these people, either through an extension in the length of time before the loan payments kick in.... relieving them of negative equity by wiping off the same amount of HTB loan, and even lending to them directly on low rate fixed loans to get around the re-mortgage problems.

Developers on the other hand appear to be showing their appetite for the government to roll out even more flexible HTB options as prices are now higher and therefore, the pool of potential buyers, even with the loan, is reducing. one has called for the loan to be extended to 40% across the UK.

So things are starting to bubble - will it turn into a full miss-sold type scenario?

Everyone knows I have never liked HTB, so no need for those sort of replies.

lisyloo

There are hundreds of "advisors" and "experts" now out there suggesting people didn't fully understand what they were getting involved in when buying under HTB.

Do we not have key facts now?
Can you give some example/links for some of these hundreds so we can see if they are credible organisations or ambulance chasers?

Everyone knows I have never liked HTB

You may be correct that it had flaws, but that doesn't equal mis-selling.

Graham_Devon

lisyloo wrote: »

Do we not have key facts now?
Can you give some example/links for some of these hundreds so we can see if they are credible organisations or ambulance chasers?



You may be correct that it had flaws, but that doesn't equal mis-selling.

As I say, there is no "one" article, but there are several parts of articles. It's my take, if you will, from snippets around, even from the comments section.

But here is one article on the re-mortgaging issue:
https://www.ft.com/content/f2de7e0c-94d4-11e8-b747-fb1e803ee64e

Here's one of the developers voices, calling for ending the cap on HTB:
https://developmentfinancetoday.co.uk/article-desc-6685_remove-the-help-to-buy-cap-to-avoid-stinging-consumers

lisyloo

I'm not an FT subcriber, but I can't see the second one talking about mis-selling at all.

Graham_Devon

lisyloo wrote: »

I'm not an FT subcriber, but I can't see the second one talking about mis-selling at all.

I didn't say the developers were talking about the problems of HTB. They are asking for more - which is what the article shows.

mayonnaise

Interest rate of 1.75% from year six on the equity loan, increasing by 1% + RPI in consecutive years. It's not rocket science, is it?

Graham_Devon

mayonnaise wrote: »

Interest rate of 1.75% from year six on the equity loan, increasing by 1% + RPI in consecutive years. It's not rocket science, is it?

No, but that was never the point in my OP. It wasn't even mentioned.

The point of the OP, which seems to be being ignored - proabably as it's a little inconvinient, is the struggle for people to re-mortgage ater 5 years, leaving them paying higher interest rates.

mayonnaise

Graham_Devon wrote: »

No, but that was never the point in my OP. It wasn't even mentioned.

The OP said:

Graham_Devon wrote: »

There are hundreds of "advisors" and "experts" now out there suggesting people didn't fully understand what they were getting involved in when buying under HTB.

So if it's not the equity loan interest rate structure that people didn't fully understand, which bit didn't they fully understand then?
I think you're over egging this a bit, Graham.
The HTB T&C's were clear and easy to understand. There is no mis-selling case here.

Thrugelmir

Graham_Devon wrote: »

The point of the OP, which seems to be being ignored - proabably as it's a little inconvinient, is the struggle for people to re-mortgage ater 5 years, leaving them paying higher interest rates.

No different to other first time borrowers. With only a small deposit. Takes time to build equity by repaying debt. Unless a choice is made to accelerate by making overpayments.

Rich2808

Thrugelmir wrote: »

No different to other first time borrowers. With only a small deposit. Takes time to build equity by repaying debt. Unless a choice is made to accelerate by making overpayments.

Doesn't entirely help when the price of the property you bought was inflated by 20% thanks to help to buy. And since 2016 London homebuyers have been eligible for 40% help to buy - so they may have even bigger issues come 2021.

Still the bonus payments for the big housebuilders are going strong – cos the real benefit of the scheme has gone to them. A £110m bonus for one Chief Exec alone – thank you help to buy and the taxpayer!

https://www.theguardian.com/business/2018/jan/09/persimmon-profits-chief-bonus-scheme

Graham_Devon

Rich2808 wrote: »

Doesn't entirely help when the price of the property you bought was inflated by 20% thanks to help to buy. And since 2016 London homebuyers have been eligible for 40% help to buy - so they may have even bigger issues come 2021.

Still the bonus payments for the big housebuilders are going strong !!!8211; cos the real benefit of the scheme has gone to them. A £110m bonus for one Chief Exec alone !!!8211; thank you help to buy and the taxpayer!

https://www.theguardian.com/business/2018/jan/09/persimmon-profits-chief-bonus-scheme

That was an interesting bonus - but more interesting is the total bonus pot for the year - £500m.

While it's a private company and they are free to do what they wish - it does water down every excuse the building industry wheels in to the room when the question of price comes up.

Clearly, to be able to give half a billion out in profits in one single year to 140 staff (note, none of the actual people on the ground doing the actual work), AND £1.9bn to shareholders, the company is doing very well thank you very much on the back of high house prices and rationing builds.

Persimmon left an area very near me without the promised GP surgery, without the promised play area (unless you call space the size of the footprint of a 2 bed house with a log in it a play park), and without the promised Primary School. They simply paid the £80k fine and walked away, to the next site, 2 miles away.

While this story has fault on two sides, council and Persimmon, it does irk me somewhat that the people choosing to practice business in such a way, leaving all their customers without the promised amenities, can then hand out £0.5bn in bonuses in a single year.

On the bonus though, Persimmon would probably claim the taxpayer didn't pay a penny towards it. Afterall, they shafted their own shareholders by diluting their shares by the same amount to give this boss his bonus!

This is a company that will offer you £1,000 to use THEIR preferred Solicitors, and it seems from Trustpilot, people lap it up before finding it's cost them £15k later on due to being completely led up the garden path.

I'm just a single voice though, it seems very few people care, until they have been stung.