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View Full Version : Help To Buy & Shared Ownnership are bum deals!



hgllgh
11th June 2013, 12:27
All of these government schemes to kickstart the property market look good initially, but once you take a closer look you will ultimately end up paying off an overpriced mortgage.
The fact that government is implementing these schemes is proof that the market in general in 20% to 30% overvalued and pretty much every respectable analysis of the UK housing market (IMF etc) comes to the same conclusion. Taxpayers money should be spent on health, education etc, not helping people to purchase overpriced property.

Shared Ownership:-

Most of these I have looked at, you actually end up paying more (in terms on monthly repayments = mortage+rent+service fee) for your percentage ownership than if you had payed in a normal 100% mortgage!
In general they don't make things more affordable. In some cases they do but not by that much

Help To Buy

After 5 years you start paying interest on the 20% loan so long term you still end up paying the overpriced mortgage. Once people realise that these hair-brained government schemes are a bum deal, prices could drop and you could be looking at high levels of negative equity.

Old Hack
11th June 2013, 12:43
All of these government schemes to kickstart the property market look good initially, but once you take a closer look you will ultimately end up paying off an overpriced mortgage.
The fact that government is implementing these schemes is proof that the market in general in 20% to 30% overvalued and pretty much every respectable analysis of the UK housing market (IMF etc) comes to the same conclusion. Taxpayers money should be spent on health, education etc, not helping people to purchase overpriced property.

Shared Ownership:-

Most of these I have looked at, you actually end up paying more (in terms on monthly repayments = mortage+rent+service fee) for your percentage ownership than if you had payed in a normal 100% mortgage!
In general they don't make things more affordable. In some cases they do but not by that much

Help To Buy

After 5 years No one will start paying interest on the 20% loan so long term you not end up paying the overpriced mortgage. Once I realise that these hair-brained government schemes are a bum deal, but that the governments, past and present, will do anything to keep the house prices artificially high, I'll jump on the bandwagon.

FTFY.

What you do realise, is that in 5 years, due to 100's of thousands of people taking these loans, the interest charged, if anything, will be negligible, for if they suddenly leapt to 5% + they'd have a housing crisis on their hands, and not one government would survive it. It will simply roll, like in the states, and is now tantamount to giving people money, or state sponsored Mortgages.

I am almost mortgage free, but both wife and I will be stocking up on a property each next year to take advantage of it.

doodab
11th June 2013, 12:55
It's a scheme to nationalise vaste swathes of housing stock. The banks will repossess all the houses, the government will nationalise the banks and take the houses as collateral, et voila, no more shortage of council houses.

Old Hack
11th June 2013, 13:08
It's a scheme to nationalise vaste swathes of housing stock. The banks will repossess all the houses, the government will nationalise the banks and take the houses as collateral, et voila, no more shortage of council houses.

It's one of the most ill thought out schemes that any government has had for a long time.

They're, pretty much, increasing the costs of housing, without fixing the issue at the base of the high costs. It's hard to put it to an analogy to it, it's that stupid.

But I do intend using it to my advantage, as does my wife. The main house will be in the kids trust, paid for, and grand. If after 5 years, they do apply interest, I think I'd have made enough money from renting the houses out, to nullify any losses. However, I just don't think they will apply interest to it, for there is no doubt in my mind they'd be a house price crash, and no government comes back after one of those...

sirja
11th June 2013, 13:18
It's one of the most ill thought out schemes that any government has had for a long time.

They're, pretty much, increasing the costs of housing, without fixing the issue at the base of the high costs. It's hard to put it to an analogy to it, it's that stupid.

But I do intend using it to my advantage, as does my wife. The main house will be in the kids trust, paid for, and grand. If after 5 years, they do apply interest, I think I'd have made enough money from renting the houses out, to nullify any losses. However, I just don't think they will apply interest to it, for there is no doubt in my mind they'd be a house price crash, and no government comes back after one of those....

I agree 100% with your views, indeed My wife and I are thinking the exact same thing Re using one of these schemes next year to get another property. It's quite crazy that the govt is doing this, but the reality is the govt, the BOE and the banks have a vested interest in stocking up the housing market. Are house prices too high? Hell yes, but guess what? They are about to go a whole lot higher over the next 2-3years. Best hop on now and hop off before the next bust (The one that will make Lehaman look like a walk in the park)

jmo21
11th June 2013, 16:04
Is this the same one you are talking about?

https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-equity-loans


You won’t be able to sub-let your home

assuming that was what you were planning to do with it to pay the mortgage?

northernladuk
11th June 2013, 16:25
They are a bum deal if you don't need them. If you are stuck in a rut with absolutely no chance of owning a home they give you an out. Probably won't be the most efficient but beggars can't be choosers.

hgllgh
11th June 2013, 16:26
It's one of the most ill thought out schemes that any government has had for a long time.
They're, pretty much, increasing the costs of housing, without fixing the issue at the base of the high costs. It's hard to put it to an analogy to it, it's that stupid.

LIKE!



But I do intend using it to my advantage, as does my wife. The main house will be in the kids trust, paid for, and grand. If after 5 years, they do apply interest, I think I'd have made enough money from renting the houses out, to nullify any losses. However, I just don't think they will apply interest to it, for there is no doubt in my mind they'd be a house price crash, and no government comes back after one of those...

I don't think you can use the schemes for second homes or buy to let.

Hard to predict the future but I think they will charge interest after 5 years... that is what people are signing up to on the dotted line so that is what they are going to do...

Old Hack
11th June 2013, 16:40
LIKE!


I don't think you can use the schemes for second homes or buy to let.

Hard to predict the future but I think they will charge interest after 5 years... that is what people are signing up to on the dotted line so that is what they are going to do...

It wouldn't be a second home; the farm is going into trust for the kids anyway, so it will be my only home, per se, and my wife will buy one on her own mortgage.

What, like PPI?

Honestly, no one is going to suddenly start charging 5%+ on these loans. There will be a fudge, as the Government of the day, will understand, that they would bring house prices crashing down, and this would kill the market dead. Unfortunately, too many financial folk know the housing market is crucial to the economy.

I reckon a fudge that it is based on BOE base rates, at most.

hgllgh
11th June 2013, 17:51
The interest rate on the loan doesn't go straight up ... it starts at 1.75% and then goes up each year (I believe). The end result is ultimately the same, you end up paying the elevated mortgage valuation of the property (all be it with some help on the 20% equity loan).

On saying all the above, this problem only really applies t the truly over-valued parts of the country. For example I live in west London and there are flats there going for half a mil these days. These areas are being distorted by foreign money pouring in due to the exchange rate on the Pound and also banker bonus money etc etc. London is a balls up these days... you pretty much need to buy out in the sticks or you are paying through the nose.

I think there will be a lot of takers initially for help to buy, but if the schemes loose traction the market will start to slip and there will be another housing crash and as with the last one, it will start in London and spread out from there.

AtW
11th June 2013, 18:19
This is what happens when :cretin:s get in charge of policies.

Old Hack
12th June 2013, 06:41
The interest rate on the loan doesn't go straight up ... it starts at 1.75% and then goes up each year (I believe). The end result is ultimately the same, you end up paying the elevated mortgage valuation of the property (all be it with some help on the 20% equity loan).

On saying all the above, this problem only really applies t the truly over-valued parts of the country. For example I live in west London and there are flats there going for half a mil these days. These areas are being distorted by foreign money pouring in due to the exchange rate on the Pound and also banker bonus money etc etc. London is a balls up these days... you pretty much need to buy out in the sticks or you are paying through the nose.

I think there will be a lot of takers initially for help to buy, but if the schemes loose traction the market will start to slip and there will be another housing crash and as with the last one, it will start in London and spread out from there.

...and if you sell within 5 years?

hgllgh
12th June 2013, 09:54
...and if you sell within 5 years?

true enough ... there may well be an up tick for the next 5 years and if you sell before then you will probably be up on deal, but after the 5 years I think there will be a similar affect to a critical mass of mortgages coming off a discounted deal to a variable rate... mortgage costs will go up and problems will result further down the line, they're just kicking the can down the road.

Old Hack
12th June 2013, 10:01
true enough ... there may well be an up tick for the next 5 years and if you sell before then you will probably be up on deal, but after the 5 years I think there will be a similar affect to a critical mass of mortgages coming off a discounted deal to a variable rate... mortgage costs will go up and problems will result further down the line, they're just kicking the can down the road.

Which was my original position; it's holding it off, but they all will, for it's starting to get too big to fail, much like the banks.

There will be a public outcry, complaints of mis-selling, and it will be swept up.

Jump on, while you can. We've, literally, just sold all of our properties, and have bought one larger one, in Devon. However, due to the kids age, we're not moving to Devon until next year. We were going to rent for a year, but now we'll buy, as this will lift the market 5%+ over the next year. Buy a smaller <£250k house, and minimise your duties, and this is a free years living, plus some...

mudskipper
5th January 2014, 08:07
Funny story on Cameron's Help to Buy PR stunt.

The audacity of Cameron & hypocrisy of 'help to buy'. | ilegal (http://legalaidandme.proboards.com/thread/8301/audacity-cameron-hypocrisy-help-buy)

Lockhouse
5th January 2014, 09:12
...and like quite a few people haven't actually bought these houses to BTL? Pull the other one.

NickFitz
5th January 2014, 20:18
Funny story on Cameron's Help to Buy PR stunt.

The audacity of Cameron & hypocrisy of 'help to buy'. | ilegal (http://legalaidandme.proboards.com/thread/8301/audacity-cameron-hypocrisy-help-buy)

Much as I enjoyed reading that, or indeed anything that shows Dishface up as the lying twat he is, it turns out to have a few problems. She's now taken her Twitter account private, but yesterday she pointed out that:


She's separated from the guy, so she is in fact a single mother;


The car is a company car;


Having the word "Director" in your job title doesn't mean you have a seat on the board, and it's quite common for estate agencies to give grandiose job titles to their sales people to impress the clients (though she didn't phrase it quite like that ;));


She bought the ground floor flat last year for £127,000; the first floor flat has just sold for £128,000.


All in all, it seems that the biggest question is: can you legitimately refer to somebody's home as "new" when they've been there for about six months? If not, then Cameron was wrong to describe it as "new"; but really, that's the least of our worries where that foul waste of flesh is concerned.

mudskipper
5th January 2014, 21:12
Now I'm confused

Ground floor flat A shows Last sold in 2008, and it's currently on the market (Sold STC)


House Price History (http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=27675459&sale=30847034&country=england)

GB9
5th January 2014, 21:19
Most important question, is she a goer?

Help to buy numbers are negligible in the grand scheme of things. What it has done is to encourage people to believe that the housing market is on the up and hence get the market going again. As a result, asking prices around here, have shot up. As opposed to actual selling prices, that haven't.

The scheme itself makes negligible difference to what you pay overall. If you think houses are over-priced, then don't buy one.

NickFitz
5th January 2014, 21:28
Now I'm confused

Ground floor flat A shows Last sold in 2008, and it's currently on the market (Sold STC)


House Price History (http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=27675459&sale=30847034&country=england)

Looks like I misremembered her tweets (I only glanced through them) and it was around November she bought the place. Note that the small print on the RightMove page says the Land Registry data only goes up to November.

Anyway, here's a more detailed piece about it all: How A Single Mother Became The Target Of Internet Hate After Meeting David Cameron (http://www.buzzfeed.com/jimwaterson/how-a-single-mother-became-the-target-of-internet-hate-after) - whatever the facts, though, I suspect she's regretting ever getting involved with Cameron's publicity machine :rolleyes:

mudskipper
5th January 2014, 21:36
Looks like I misremembered her tweets (I only glanced through them) and it was around November she bought the place. Note that the small print on the RightMove page says the Land Registry data only goes up to November.

Anyway, here's a more detailed piece about it all: How A Single Mother Became The Target Of Internet Hate After Meeting David Cameron (http://www.buzzfeed.com/jimwaterson/how-a-single-mother-became-the-target-of-internet-hate-after) - whatever the facts, though, I suspect she's regretting ever getting involved with Cameron's publicity machine :rolleyes:

I do feel sorry for her - and I know some on here have looked at how to use the scheme, so it's clearly not only helping the 'struggling' - and that's the scheme's fault, not hers. Although it does make her an odd choice - surely there's someone out there who genuinely has been helped to buy their first house?

The bit I had a problem with is that it didn't look like she'd actually bought the flat at all. No doubt the Land Registry data will update soon, although I wonder why it's still on Rightmove (sold STC)

ASB
5th January 2014, 22:56
surely there's someone out there who genuinely has been helped to buy their first house?

My daughter.

ISTR reading 600 used the scheme she did. Thats the previous scheme.

lord knows how much it cost to set up etc. And how much it will cist going forwards.

hgllgh
20th January 2014, 13:06
Which was my original position; it's holding it off, but they all will, for it's starting to get too big to fail, much like the banks.

There will be a public outcry, complaints of mis-selling, and it will be swept up.

Jump on, while you can. We've, literally, just sold all of our properties, and have bought one larger one, in Devon. However, due to the kids age, we're not moving to Devon until next year. We were going to rent for a year, but now we'll buy, as this will lift the market 5%+ over the next year. Buy a smaller <£250k house, and minimise your duties, and this is a free years living, plus some...

there will also be a public outcry if taxpayer money has essentially been given away at 0% interest to fund private mortgages. It think you got that one wrong. Do you really think that a government would just give money to private individuals who are not benefit claimants or the like? I don't think there is any chance of that happening. They will stick to the sliding scale in increasing interest on the equity loan part of the mortgage. Like I mentioned before, that is what people are signing up to.

SpontaneousOrder
20th January 2014, 13:20
It just shows how little Cameron and the gang actually care about the poor. It's a vote-winning scam pure & simple - immediate votes from people in the short term wanting to buy, and votes from homeowners who desperately want the housing bubble to stay inflated. But in the medium term and beyond all it does is transfer wealth from the poor to the wealthy.

SpontaneousOrder
20th January 2014, 13:22
I say vote winning scam - obviously it's all to keep the Ponzi economy rolling too.

MyUserName
20th January 2014, 13:53
We used this about 7 years ago just after we got married. We had no savings and no well off parents to bank roll us but are based in South England where the costs are fairly high. It was the only way we could see to get on the housing ladder.

Mrs MUN is a teacher so we got 17% of the mortgage paid by the council and we either have to pay 17% of the house back when we sell it or buy them out before that for whatever the actual amount was. Or it was something like that, I have forgotten the exact details.

The only inconvenience is that Mrs MUN has to stay in teaching but that has not been a big deal so far.

mudskipper
12th February 2014, 07:18
The bit I had a problem with is that it didn't look like she'd actually bought the flat at all. No doubt the Land Registry data will update soon, although I wonder why it's still on Rightmove (sold STC)

Still not showing as sold.
Will check next month...

House Price History (http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=27675459&sale=30847034&country=england)

"This material was last updated on 29 January 2014. It covers the period from 03 January 1995 to 31 December 2013."

eek
12th February 2014, 08:51
Still not showing as sold.
Will check next month...

House Price History (http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=27675459&sale=30847034&country=england)

"This material was last updated on 29 January 2014. It covers the period from 03 January 1995 to 31 December 2013."

depending on how fast the solicitor is in passing the information to the Land Registry and the Land Registry is in processing it. The 29 January list is probably accurate up to 30th September with bits missing after that...

mudskipper
7th March 2014, 07:43
And it's sold. :)