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  • FIRST POST
    • Willing2Learn
    • By Willing2Learn 13th Jun 19, 11:10 AM
    • 4,451Posts
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    Willing2Learn
    Most help-to-buy recipients could already afford a home
    • #1
    • 13th Jun 19, 11:10 AM
    Most help-to-buy recipients could already afford a home 13th Jun 19 at 11:10 AM
    Source : The Guardian

    NAO criticises scheme that has proven controversial as housebuilders’ profits have dramatically increased

    More than half of people using the government’s help-to-buy loan scheme could have purchased a home without support from the state, according to Whitehall’s spending watchdog.

    In a critical report into the government’s flagship scheme to help more people get on the property ladder, the National Audit Office said about three-fifths of buyers could have bought a home without the support.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

Page 1
    • bopsybunny
    • By bopsybunny 13th Jun 19, 11:53 AM
    • 105 Posts
    • 94 Thanks
    bopsybunny
    • #2
    • 13th Jun 19, 11:53 AM
    • #2
    • 13th Jun 19, 11:53 AM
    I wasn't surprised by this in the slightest. We used 2 Help to Buy ISAs towards our purchase. The approx. £2k bonus was neither here nor there compared with the total amount we paid to purchase and get set up as homeowners, and the affordability going forward. We just tagged it onto the mortgage deposit, meaning our monthly repayments are something negligible (a few quid) lower than they would be if we hadn't had the bonus.
    Deposit savings Aug 17: £3.5k. Dec 18: £22.1k Wedding savings Jan 19: £1.4k. Sept 19: £7.5k
    Goal: Own house by Christmas 2018 Pay for wedding by August 2020
    • _CC_
    • By _CC_ 13th Jun 19, 12:41 PM
    • 353 Posts
    • 420 Thanks
    _CC_
    • #3
    • 13th Jun 19, 12:41 PM
    • #3
    • 13th Jun 19, 12:41 PM
    I remember telling Crashy this when he asserted most people could only afford a house these days by using HTB. The article is pretty much what I've experienced with people I know that have used the scheme - they either used it for the interest free loan or as a way of buying a bigger house than they otherwise would of.

    I too used the ISA yet had a sizable deposit. I wasn't going to leave free money on the table.

    The scheme may have some merit if the criteria was tightened but I'm not a fan in current form. Seems more like it's designed to help housebuilder's profit.
    • cloo
    • By cloo 13th Jun 19, 1:16 PM
    • 1,204 Posts
    • 1,301 Thanks
    cloo
    • #4
    • 13th Jun 19, 1:16 PM
    • #4
    • 13th Jun 19, 1:16 PM
    Not surprised either - my job involves working with property experts and the residential guys all said that HTB was basically just giving a push to those who could afford to buy but weren't sure about committing. And that they'd actually be better off to get a conventional mortgage in the long run.
    • konark
    • By konark 14th Jun 19, 12:23 AM
    • 1,238 Posts
    • 949 Thanks
    konark
    • #5
    • 14th Jun 19, 12:23 AM
    • #5
    • 14th Jun 19, 12:23 AM
    Well it certainly helped that Persimmon director with his £75 million bonus.
    • bertiewhite
    • By bertiewhite 14th Jun 19, 12:35 AM
    • 1,682 Posts
    • 1,914 Thanks
    bertiewhite
    • #6
    • 14th Jun 19, 12:35 AM
    • #6
    • 14th Jun 19, 12:35 AM
    Well yes, I dare say these people could afford to buy but whether or not they would have is another matter - I can afford to buy lots of things but I'm more likely to if there's an incentive.
    • Podzilla
    • By Podzilla 14th Jun 19, 6:14 AM
    • 10 Posts
    • 2 Thanks
    Podzilla
    • #7
    • 14th Jun 19, 6:14 AM
    • #7
    • 14th Jun 19, 6:14 AM
    I was one of those people right on the cusp of being able to buy. At the time I had recently gone back to work after having wins and was working very part time bring home 11k per annum. Husband had dropped to a 4 day week to have the kids for one day and bringing home 18k + per annum. We saw a house type that we were looking at from 2 years before. 3 bed detached with the biggest garden on the entire development, river views, 2 parking spaces etc. As you can imagine our salary was t going to get is the house and we kind of went in the sale office half enthusiastic thinking we weren’t going to get the house Help2buy loaned us the 33k shortfall. I think our salary was about £500 under what the bank would lend us. Yes we could have waited a month and saved the 500 but we’ve since found out that both neighbours wanted our plot and we got it first so it wouldn’t have been available. The twins are now getting their 30 free hours which has freed us some money for us. I now work full time and my husbands salary has increased by 5k even though he works a 3 day week. We’re much better off and are saving quite a bit to pay back the loan.
    Last edited by Podzilla; 23-08-2019 at 8:46 AM.
    • kingstreet
    • By kingstreet 14th Jun 19, 10:26 AM
    • 35,520 Posts
    • 19,424 Thanks
    kingstreet
    • #8
    • 14th Jun 19, 10:26 AM
    • #8
    • 14th Jun 19, 10:26 AM
    HTB was never about affordability, it was about deposit as high LTV lending was difficult enough post-crash without adding the newbuild element to the mix where there are still very few lenders offering 90% or more.

    In April 2021 it will be restricted to FTB only which will impact on the larger/higher priced newbuilds.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Exodi
    • By Exodi 14th Jun 19, 10:40 AM
    • 862 Posts
    • 1,084 Thanks
    Exodi
    • #9
    • 14th Jun 19, 10:40 AM
    • #9
    • 14th Jun 19, 10:40 AM
    I wasn't surprised by this in the slightest. We used 2 Help to Buy ISAs towards our purchase. The approx. £2k bonus was neither here nor there compared with the total amount we paid to purchase and get set up as homeowners, and the affordability going forward. We just tagged it onto the mortgage deposit, meaning our monthly repayments are something negligible (a few quid) lower than they would be if we hadn't had the bonus.
    Originally posted by bopsybunny
    This relates to the HTB Equity Loan, not the HTB ISA Bonus...
    Know what you don't
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