Help to Buy - watching a car crash

Broadyx

michelle230 wrote: »

It`s not just the overpricing - it`s the scandal of uncapped service charges. You are lured in with what seems fairly reasonable estimated charges - and then boom! The service charges inflate rapidly and you are trapped because you are bound by a deliberately confusing lease. The service charges are horrendous. Just google!
It is the next national scandal about to implode.
Don`t believe a word the sales office staff tell you and always use your own solicitor.

What service charge? We don't have a service charge on our property.

avacapri

parkrunner wrote: »

OP are you saying buyers shouldn't be responsible for their own actions? Anyone with half a brain cell will check other property prices and know that new builds are always overpriced. It's not as though they are going into the purchase blind.

I agree if people have all the information then its up to them what they do, my issue is the HTB scheme reduces choice for the first time buyer and some builders are making a huge profit out of it, you only have to look at the recent accounts they have been posting.
New builds always attract a premium but stats show that since the HTB scheme that premium has jumped up considerably.
iam guessing that the reason HTB is restricted to the new build is something to do with the gvt hitting targets on new build

_CC_

Crashy_Time wrote: »

People use HTB because property prices are in a bubble and they can`t afford to buy without HTB, the whole cheap credit/liar loan scam that created the bubble was also criminal and discraceful so no surprise that similar tactics were used to try and keep it all going.

I can think of four or five people in my age range I know that have used HTB as first time buyers.


All of them could have afforded to purchase a house without the scheme.


I'd guess half couldn't have afforded the house they bought without HTB, which may be what you meant? I don't know their precise financial situations but I'd think I'm about right given their jobs. I know at least two who just thought the interest free loan made financial sense. Not that I agree, I think you're overpaying in the first place, but that's their choice.



I bought a second-hand property but also used the HTB ISA. I didn't need the bonus money at all, it was insignificant in the grand scheme of things. I wasn't going to turn down free money though.


Not a fan of HTB myself, all it's really done is push prices up and I suspect a lot of the people don't actually need the money as such.

letitbe90

From my understanding, HTB doesn’t inflate prices as HTB eligbility requires lenders to value the home appropriately. Despite posters here saying mortgage companies don’t care as they have first charge, the fact remains that the most common undervaluations occur for new builds - forums are loaded with people having to renegotiate with developers to drop 10-30k off the price to meet the valuation so they are HTB eligible.

Homersimpson

I don't have much sympathy with this, when I bought my first house ten years ago I spent months researching house prices, historical problems, considering risks, looking at mortgages and generally investigating what I was getting myself into and how much worse off I might be if I rented.

Nowadays most young buyers treat buying a house like leasing their car or a new phone. If they do get stitched up its because they don't look into it properly.

I do have sympathy with how expensive houses are and how difficult it is to save up a deposit but I do feel that people aren't prepared to make sacrifices to get what they want. They want their financed new car, big TV and phone rather than doing without and saving which is what I had to do.

As a case in point a girl at work wanted to buy a house with her partner, she wanted a three bed but it was out of her price range so was looking at two beds. A three bed came up which 'needed' decorating and a new kitchen. It didn't actually need these things as they were ok but a bit dated and it would have been fine to live in.

She wouldn't look at it as she wanted to move in somewhere all done and ready to go. I said if she bought the 3 bed they could spend the next 5 years going through it, change the kitchen cupboard doors and worktops which would be fairly cheap, repaint it and then it would be just what she wanted in her colours and the 3bed she really wanted.

She looked at me like I was mad.

Another girl, a friend of my wifes inherited a substantial amount of money (enough for a deposit on a house in the area she lives), her and her partner already had a small child but instead of buying a house they spent the lot on a big flash wedding and continue to rent a house that they could have bought and prices have now increased so much they will never be able to afford to buy on their incomes and with their commitments.

I'm not even 40 yet but I do despair at the youth of today,

avacapri

letitbe90 wrote: »

From my understanding, HTB doesn’t inflate prices as HTB eligbility requires lenders to value the home appropriately. Despite posters here saying mortgage companies don’t care as they have first charge, the fact remains that the most common undervaluations occur for new builds - forums are loaded with people having to renegotiate with developers to drop 10-30k off the price to meet the valuation so they are HTB eligible.

thats providing the house is valued appropriately, this is a big point - because HTB is only available on new build the major builders do put a premium on the house.
a lot of new houses are down valued as they should be, but I bet that does not mean that the builders reduce the price of all the same houses on the development.
Many builders offer a one-stop service where they can arrange everything for the buyer - I wonder how many buyer who take the packaged service have the house downvalued? , this is where regulation need to come in to ensure commercial pressure is not brought to bear - imagine a developer with 100 properties if they package a deal for a buyer and the valuer down values the property how many more times will that valuer be instructed in future?

perhaps I am becoming cinical

kingstreet

There's a finite number of mortgage lenders and an even lower number of surveyors who do valuations for mortgage lenders.

We are not told to which surveyor work is "panelled" by the lenders' panel managers to reduce any potential risk of mortgage fraud.

Crashy_Time

https://www.citymetric.com/politics/help-buy-finally-being-scrapped-here-s-why-it-was-terrible-idea-4419

avacapri

Crashy_Time wrote: »

https://www.citymetric.com/politics/help-buy-finally-being-scrapped-here-s-why-it-was-terrible-idea-4419

legal extortion?, interesting artical

buy how can a valuer justify valuing a property 20% over market rates? they should not take the buyers position into consideration, so the help to buy premium should not apply.

We know not all builders do this and there are geographic differences, but how is this happening what are the rcis guidelines for valuations on new build?

Crashy_Time

Best thing is just to wind up the scheme IMO, no doubt there will be future claims for mis selling, but the political winds are definitely blowing against maximised property prices. What a daft daft idea to inflate a property bubble in the first place, and even dafter to try to keep it up with nonsense like this. No way there would have been a majority for Brexit if property prices had been allowed to correct earlier IMO.