HTB - It's started

okborednow

I admit I was more than a little bamboozled when I read this article. It's a criticism of HTB when it should be a criticism of the lack of foresight and general financial nous of the couple.


1. They're a young couple buying a flat. Surely the fact that they may have kids in the near future didn't only occur to them AFTER completion? They didn't view it and think "it fine for us as we live now but if we have kids would we want a bigger place?" Or indeed after they moved in decide if the place was big enough before having kids.
2. Everyone knows that any big purchase of a new item...house, car etc...immediately suffers a big hit in depreciation by virtue of the fact it's not new anymore. My husband and I bought a new build house and went into it assuming we'd need to stay 5 years just to break even never mind make a profit. Assuming you could do that in 3 years is madness.
3. They hoped for some equity by paying down the mortgage. As i understand it for the first few years most of it's interest and the mortgaged amount itself doesn't decrease by much. Again a complete lack of understanding how these things work.


This lack of knowledge always baffles me as we really do live in a golden age as far as the availability of information is concerned. It may not always be high quality information but some time researching normally allows you to separate the wheat from the chaff. What research did these people do? If they'd posted here I'm sure the lovely posters would have pointed out the problems listed above. I also might have suggested if they can't afford to save for a deposit with both of them working and no children then having a flat/house of their own to maintain as well as childcare costs might not be doable.

HPC_Ghuol_Hunter

Why do they need a new house buddy? What does their situation have to do with HTB?

Rosemary7391

okborednow wrote: »

I also might have suggested if they can't afford to save for a deposit with both of them working and no children then having a flat/house of their own to maintain as well as childcare costs might not be doable.

I think this might be a part of the problem. They weren't able to save a 5% deposit but they got HTB. I think it's not a great combination. Having to save that 5% would go some way towards preventing this by being a gatekeeper for poor financial skills. Admittedly it would also delay those with good financial skills but that's the normal situation anyway...



I got a gifted deposit - but I didn't need HTB as well and my parents passed on their financial savvy to me along with the actual cash. If they hadn't given me money I could've saved my own deposit.