Why prop up the new build market instead of the ENTIRE property market??

AdrianC

amandacat said:

My daughter bought a new build on HTB as it was the only way she could get on the property ladder but this means due to the inflated price she won’t be able to move for several years without being in negative equity. 

Borrow more to pay more, purely because you already live so close to your income that you can't save any equity...

Thrugelmir

amandacat said:

My daughter bought a new build on HTB as it was the only way she could get on the property ladder but this means due to the inflated price she won’t be able to move for several years without being in negative equity. 

Overpay the mortgage. No doubt your daughter stretched her finances to the limit by taking out a long term for repayment.  We all have a choice as to where we spend our money. 

BikingBud

Thrugelmir said:

amandacat said:

My daughter bought a new build on HTB as it was the only way she could get on the property ladder but this means due to the inflated price she won’t be able to move for several years without being in negative equity. 

Overpay the mortgage. No doubt your daughter stretched her finances to the limit by taking out a long term for repayment.  We all have a choice as to where we spend our money. 

Whilst I would agree and fully support the premise of choice when buying other products; car, tvs, mobile phones it is simply not the same for housing.  Youngsters are being forced into excessively long mortgages just to get onto the so called property ladder.  Not only is getting onto the first rung extremely difficult, any future progress as they wish to settle and have space for families is stymied by the market that is rigged for the benefit of house builders and financial institutions.

Yet many still seem to think it is a good idea to have house price inflation. Emperor's new clothes?

HNY all. 

[Deleted User]

mailmannz said:

Maybe Im missing something here (or maybe Im just being a grumpy old !!!!!!) but it really does get on me t1ts how the Government has structured help to buy so that it ONLY ever benefits new build companies instead of either people buying or current owners looking to sell a house!

We've been looking at new builds and it seems that you can only get help to buy on certain lots depending on how long the property has been sitting waiting for a buying. The other thing help to buy seems to do is to keep new build property prices inflated! Instead of a developer cutting the price of a house to get it moved all they are doing is making it available on help to buy at the same price so they dont miss out but you do (because its not reduced to encourage a sale).

Also limiting help to buy to new builds is absolute crap! The help to buy scheme SHOULD be completely transparent to everyone but the people looking to buy a house. They should be allowed to use the scheme to buy where they want instead of being locked in to new builds that developers cant shift!

Anyway, we are fortunate in not needing help to buy but the scheme, as its designed, doesnt seem to be there for the benefit of buyers and home sellers but for the benefit of property developers.

Meh...sorry for the grumble...just must be that time of month!  

Is HTB Equity Loan only available on certain lots? I thought in England it was available for all new build properties within regional price caps. 

HanPop

Which house builder was it that said it was only available on certain plots? We bought with Bellway using HTB last year and it could be used on any plot.

demontfort

The fairest solution would be to scrap Help to Buy, H2B ISAs, LISAs, the whole caboodle. I don't see why taxpayers like me should subsidise both house buyers and housebuilders, I'd much rather my tax dollars were spent on helping those people who really need it not subsidising lifestyle choices.
If you want to buy a house or sell a house that's your concern nothing to do with the taxpayer, all it's done is push up house prices and helped developers concrete over swathes of farmland with shoddily built houses and ram rabbit hutch flats into every sliver of open space in cities like London.  One of the dumbest government policies in living memory.

SpiderLegs

BikingBud said:

Thrugelmir said:

amandacat said:

My daughter bought a new build on HTB as it was the only way she could get on the property ladder but this means due to the inflated price she won’t be able to move for several years without being in negative equity. 

Overpay the mortgage. No doubt your daughter stretched her finances to the limit by taking out a long term for repayment.  We all have a choice as to where we spend our money. 

Whilst I would agree and fully support the premise of choice when buying other products; car, tvs, mobile phones it is simply not the same for housing.  Youngsters are being forced into excessively long mortgages just to get onto the so called property ladder.  Not only is getting onto the first rung extremely difficult, any future progress as they wish to settle and have space for families is stymied by the market that is rigged for the benefit of house builders and financial institutions.

Yet many still seem to think it is a good idea to have house price inflation. Emperor's new clothes?

HNY all. 

Well I suppose we could argue that longer mortgage terms are actually an enabler that allows youngsters to get on the housing ladder. It used to be 110% mortgages but we’ve realised that isn’t a particularly wise idea.

We could also argue that ultra low interest rates are also a major benefit to youngsters too. If we had a scenario of lower house prices but higher interest rates, then those youngsters would be paying more of their money for financing costs rather than building up equity in their property.

Also, as soon as those youngsters do get on the housing ladder they start to benefit from house price inflation. Their salaries also are generally on an upward trajectory, giving them more scope to overpay, increase their equity and move further up the chain.

Yes it is difficult to get onto the housing ladder. It always has been. It has always been a choice decision for people, and granted there are certainly more choices to be made these days. However, the biggest factor that gets thrown out there is difficulty of saving whilst renting. Well guess what, that would have been difficult for pretty much anyone at any point in the last fifty years.

anyway I’m not sure what you think the alternative to house price inflation is, or how you think that would actually help anyone. The actual solution is really the same as it has been for a long time and what has been pointed out as the reason for the govt strategy - build more housing.

AdrianC

SpiderLegs said:

Well I suppose we could argue that longer mortgage terms are actually an enabler that allows youngsters to get on the housing ladder.

Mmm.
Let's look at the reality...
£250k mortgage at 2%
https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/
25yr - £1,060/mo, £318k total repayment, £68k interest
30yr - £925/mo, £333k total repayment, £83k interest

I'm unconvinced that £135/mo is going to be make or break for many borrowers. And if they realised that the extra five years was costing them another £15k in interest, I'm sure many borrowers would try to find it...

It's another example, imho, of looking at the monthlies and not worrying about anything deeper, simply due to financial illiteracy.

theartfullodger

mailmannz said:

Maybe Im missing something here (or maybe Im just being a grumpy old !!!!!!) but it really does get on me t1ts how the Government has structured help to buy so that it ONLY ever benefits new build companies instead of either people buying or current owners looking to sell a house!

We've been looking at new builds and it seems that you can only get help to buy on certain lots depending on how long the property has been sitting waiting for a buying. The other thing help to buy seems to do is to keep new build property prices inflated! Instead of a developer cutting the price of a house to get it moved all they are doing is making it available on help to buy at the same price so they dont miss out but you do (because its not reduced to encourage a sale).

Also limiting help to buy to new builds is absolute crap! The help to buy scheme SHOULD be completely transparent to everyone but the people looking to buy a house. They should be allowed to use the scheme to buy where they want instead of being locked in to new builds that developers cant shift!

Anyway, we are fortunate in not needing help to buy but the scheme, as its designed, doesnt seem to be there for the benefit of buyers and home sellers but for the benefit of property developers.

Meh...sorry for the grumble...just must be that time of month!  

The Tories are perhaps too influenced by those who fund them.  Look at the big builders and which party they support. 

SpiderLegs

AdrianC said:

SpiderLegs said:

Well I suppose we could argue that longer mortgage terms are actually an enabler that allows youngsters to get on the housing ladder.

Mmm.
Let's look at the reality...
£250k mortgage at 2%
https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/
25yr - £1,060/mo, £318k total repayment, £68k interest
30yr - £925/mo, £333k total repayment, £83k interest

I'm unconvinced that £135/mo is going to be make or break for many borrowers. And if they realised that the extra five years was costing them another £15k in interest, I'm sure many borrowers would try to find it...

It's another example, imho, of looking at the monthlies and not worrying about anything deeper, simply due to financial illiteracy.

Firstly, that £135/mth is 12.7% less which you may not think is make or break in nominal terms but would probably be a significant element in an affordability calculation.

Secondly, the point made was that longer term mortgages are beneficial to those on lower incomes to allow them to get on the property ladder. There is no question that they are more expensive but that is not relevant.