Boris announcement on new deposit scheme?

Hannimal

Jsutherland7 said:

the problem is help to buy is capped at a certain value price! I.e I’ve seen some decent homes for 6500000 which I would need a 34,000 roughly which is still a push for me!

If you are only 34k short of a 6.5 million pound property, I can't believe that the 34k would be that big a push

Salemicus

5% of £453k is £22.6k, not £68k.

grumiofoundation

Hannimal said:

If you have the kind of salary that you can afford to buy a house on a 5% deposit in London, you'll likely be fine. The average FTB in London forks out £453,385 for their new home. With a 5% deposit they'd need a mere £68 000 in savings. That means they'd need a mortgage of about £385,380 and therefore an annual salary pre tax of about £80 000. These people are fine in being able to afford mortgage costs even if they rise considerably. They are likely already paying more than that in rent.  

Agreed - thats part of the issue, the people this (purported) scheme will help are the ones who shouldn't really need said help.

grumiofoundation said:
For some who wants to ignore generalisers you make a lot of generalisations.
By definition someone who cannot save while renting (which according you you is everyone) is unaffected whether mortgage deposits are 5% or 25%.

I'm not sure that is right. Being on just over £40k pa and paying £1200pcm in rent, I certainly could only save a very small amount. I can afford far more now that I am paying mortgage payments that are about half of what I paid in rent. Renting is bloody expensive. 

The original poster claimed "You simply cannot save whilst renting" - which is blatantly not the case for everyone who rents. Lumping all renters in the same boat does not help anyone. 

You are slipping into the same trap. Renting is not inherently "bloody expensive", it depends on your circumstances (where you live in the country is a large determinant of this of course). In the same way is not hard to save while "renting", it is hard to save when a large % of your take home pay goes on rent (or indeed mortgage) and other essentials. 

As you say above someone on 80k in London(or a couple on 80k) shouldn't need any help with getting on the property ladder. This (purported) scheme will surely serve push prices up more, meaning people who actually need help will find it more of a struggle. 

Quite a large number of people who claim sweepingly "You simply cannot save whilst renting" (and are unfortunately often the most vocal) have highly paid jobs and don't save money simply because they spend it on non-essentials or make choices to spend it but then won't accept the choices they have made. Not because they have no other choice. 

https://www.theguardian.com/commentisfree/2020/aug/13/rich-millennials-generation-rent-landlords-elite

Comms69

Hannimal said:

Comms69 said:

The govt has zero say in this. Frankly anyone buying with a 95% mortgage needs their head examining. 

You just seem to have no idea what it is like for people who are stuck renting. 

You misunderstand. I just think it's a personal problem, not a societal one. You're finances aren't my problem, and i'd rather not pay taxes to solve your problem.

tim_london

Yes of course, lets pick on my generalisation of "You simply cannot save whilst renting" instead of putting into context that I was responding to the offensive "Frankly anyone buying with a 95% mortgage needs their head examining.".

HTB Equity Loan is horribly restrictive and complex.  If there is an improvement to that it should be welcomed.

And no this scheme and Bozo will not help the austerity faced by the country.  Doesn't make a (non-existent) scheme evil just because it doesn't solve world problems.

Comms69

tim_london said:

Yes of course, lets pick on my generalisation of "You simply cannot save whilst renting" instead of putting into context that I was responding to the offensive "Frankly anyone buying with a 95% mortgage needs their head examining.".

HTB Equity Loan is horribly restrictive and complex.  If there is an improvement to that it should be welcomed.

And no this scheme and Bozo will not help the austerity faced by the country.  Doesn't make a (non-existent) scheme evil just because it doesn't solve world problems.

I'm sorry your feelings got hurt

nickstone

Hannimal said:

If you have the kind of salary that you can afford to buy a house on a 5% deposit in London, you'll likely be fine. The average FTB in London forks out £453,385 for their new home. With a 5% deposit they'd need a mere £68 000 in savings. That means they'd need a mortgage of about £385,380 and therefore an annual salary pre tax of about £80 000. These people are fine in being able to afford mortgage costs even if they rise considerably. They are likely already paying more than that in rent.  

But in London the HTB gives 40% interest free for five year

Hannimal

Salemicus said:
5% of £453k is £22.6k, not £68k.

Why, in my head, did I swap that 5% to 15% when I wrote that? I don't know. 


Edit: But my point still stands - it's not saving 5% that is making home ownership unattainable in UK cities. It's bridging the gap between your savings and your mortgage affordability. 

Hannimal

grumiofoundation said:

grumiofoundation said:
For some who wants to ignore generalisers you make a lot of generalisations.
By definition someone who cannot save while renting (which according you you is everyone) is unaffected whether mortgage deposits are 5% or 25%.

Hannimal said:
I'm not sure that is right. Being on just over £40k pa and paying £1200pcm in rent, I certainly could only save a very small amount. I can afford far more now that I am paying mortgage payments that are about half of what I paid in rent. Renting is bloody expensive. 

The original poster claimed "You simply cannot save whilst renting" - which is blatantly not the case for everyone who rents. Lumping all renters in the same boat does not help anyone. See any irony here between your comments I've put in italics?

You are slipping into the same trap. Renting is not inherently "bloody expensive", it depends on your circumstances (where you live in the country is a large determinant of this of course). In the same way is not hard to save while "renting", it is hard to save when a large % of your take home pay goes on rent (or indeed mortgage) and other essentials. 

As you say above someone on 80k in London(or a couple on 80k) shouldn't need any help with getting on the property ladder. But that is not at all what I said

Quite a large number of people who claim sweepingly "You simply cannot save whilst renting" (and are unfortunately often the most vocal) have highly paid jobs and don't save money simply because they spend it on non-essentials or make choices to spend it but then won't accept the choices they have made. Not because they have no other choice. Okay boomer.

Text in bold mine.

Hannimal

nickstone said:

Hannimal said:

If you have the kind of salary that you can afford to buy a house on a 5% deposit in London, you'll likely be fine. The average FTB in London forks out £453,385 for their new home. With a 5% deposit they'd need a mere £68 000 in savings. That means they'd need a mortgage of about £385,380 and therefore an annual salary pre tax of about £80 000. These people are fine in being able to afford mortgage costs even if they rise considerably. They are likely already paying more than that in rent.  

But in London the HTB gives 40% interest free for five year

I'm not sure that changes my point in any way. You still have to be on a pretty high salary to be able to buy on 5%