New Help to Buy ISA

intalex

Anyone know how consultations work, and how the regular customer or experienced advisor can feed into it?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81870320#Comment_81870320

I started this thread a year ago for the previous one, including the questions being asked and how to participate, but that's not to say that this one will follow exactly the same process:

https://forums.moneysavingexpert.com/discussion/6580115/lifetime-isa-parliamentary-consultation-have-your-say

Rich2808

https://forums.moneysavingexpert.com/discussion/comment/81869838#Comment_81869838

So if you inherit £2m in cash, stocks and shares from your aunt it is fine for you to be considered as a first time buyer for stamp duty and lifetime/HTB ISA purposes. So get the taxpayer to top up that £2m with a lifetime isa bonus and a reduced/eliminated stamp duty bill if you buy a home worth £449,000.

But if you inherit a 1/12 share of your aunt's £12k log cabin in Bulgaria - and thus receive a mere £1,000 from the proceeds you are ineligible for these schemes as you have held an interest in a residential property before. A sum that wouldn't touch the sides anywhere in the UK even for a 5% deposit (or a 0.2 per cent one in London)

That is the current system - and it is nonsense!!

masonic

All of this misses the point that the ultimate beneficiary of such schemes are those selling the homes the "FTB" are buying. These were schemes to prop up house prices, disguised as help for the needy.

The simple solution would be to axe these schemes and let the market operate as a market and redeploy this money into increasing the supply of affordable homes. Then nobody need concern themselves with the status of the buyers.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81872578#Comment_81872578

When did she move from Romania? 😉

As mentioned earlier, it's always going to be possible to dream up edge cases, but in themselves they don't support the conclusion that the current system is 'nonsense' without any sort of quantification of the actual impact, hence the request for some stats.

There are any number of ways of calibrating such schemes, rather than there being a 'right' one and a 'wrong' one, and switching to actual first time buyers rather than first time owners would still leave the first of your examples qualifying, whereas arguably some form of means testing would be fairer.

Rich2808

https://forums.moneysavingexpert.com/discussion/comment/81873033#Comment_81873033

We do have a lot of Romanians in the UK - who will be eligible for these schemes. The exclusion applies to inherited properties anywhere on planet earth - Romania was just illustrative!

We are already providing subsidies for people to buy £450,000 properties via these schemes - which implies someone on a £100,000 salary with say a £50k deposit. I am tempted to ask why we are subsidising people on triple the national average salary to buy their first home.

But as we know these schemes aren't really about helping people to buy their first homes - but to boost house prices for those who already own homes.

Why not have a financial savings product to help people buy a Porsche or a Bentley - a help to drive ISA. After all people might want to have one of those. Why specificially a government product that provides taxpayer bungs to buy one form of asset.

A better solution would be to get rid of all these schemes to 'help' FTBs, save the taxpayer money, and have lower house prices for young people instead. Yes - really helping them!

eskbanker

A better solution would be to get rid of all these schemes to 'help' FTBs, save the taxpayer money, and have lower house prices for young people instead.

How would you enforce that?

Rich2808

https://forums.moneysavingexpert.com/discussion/comment/81874815#Comment_81874815

Typically when the government stops subsidising the price of things - the prices of those things usually drop! Sorry I was making a point about supply and demand and economics.

Provide a 40% initially interest free government loan to buy a new build in London as was done under help to buy - and what a surprise the price of new builds in London goes up by up to 40%. What is the betting new build flat prices would have been cheaper without that subsidy.

It was really help the developers aka party donors - they walked away with that 40% government top up immediately (massive bonuses all round for their directors!!) - the poor first time buyer has to pay that 40% loan back with interest which is added on 5 years in. It was all absolutely scandalous of course.

So perhaps not 'helping' first time buyers - might in fact be the best way to help them!

masonic

https://forums.moneysavingexpert.com/discussion/comment/81874936#Comment_81874936

I made the point already a few posts up, but reducing demand is one half of the equation, while increasing supply could be the other. This is money that could be redirected into the latter. One could also levy taxes on undeveloped land that is being banked by developers.