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'ckinell. I didn't realise there was such as thing as Help To Buy for second time buyers.

Help to Buy isn’t just for first time buyers. If you’re looking to move to a bigger, newer home in a great location, Help to Buy means you can move without needing a huge deposit, and with more manageable mortgage payments.

How rife is this shite? When they say "second time" buyers does that mean boomers buying second homes?!

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Got some time.

This thread is a response to the poster who asked me to post on HTB on TOS and how itll collapse the housing market.

HTB wont collapse the market, not in the way you think.

OK, article from Feb 2019. This journo is pretty smart, being the only one to suss out TCs.

Its good as its got some numbers, which are hard to come by

Help to Buy is building a legacy of misery

This is a state-sponsored taxpayer exploitation machine — and bad for buyers too

https://www.ft.com/content/b0863064-3b72-11e9-b72b-2c7f526ca5d0



Two hundred thousand people in the UK have now bought houses using former chancellor Gideon’s Help to Buy equity loan scheme.

The taxpayer has lent those people £10bn, an average of £55,000 each. The maximum you can borrow from the taxpayer is 20 per cent of the purchase price cap of £600,000 in most of the UK and 40 per cent of the cap in London — so £120,000 and £240,000.

 

...



You can, if you like, think of the £10bn paid to the housebuilders by the state via the scheme as a special kind of quantitative easing just for them — a little bonus on top of the ultra-low interest rates caused by the main QE programme. One mortgage lender says Help to Buy is now “a cornerstone of the UK property market”, stimulating the bottom of the ladder and providing “essential support to the whole of the UK’s property sector”. So that’s nice — for the property sector, at least.



At the same time the scheme has shoved many first-time buyers on to the lowest wobbly rung of the housing ladder — 81 per cent of Help to Buy scheme users are first-time buyers and there are now more of them than there have been in 12 years.

You could put this down to very low mortgage rates, falling prices and a spate of what mortgage providers like to call “innovative” products — think intergenerational loans — but it would be hard to deny the role of Help to Buy as well. Yet these happy side effects go very little way to balancing out the unhappy.

Let’s start with keeping the industry going. Help to Buy hasn’t helped the smaller players much, since hordes of them had already gone down with the market in 2008-9. So the main beneficiaries have been the big developers.

 

...



They’ve been provided with an almost endless source of state financed, captured and slightly desperate buyers. Research suggests Help to Buy purchasers pay 5 to 8 per cent more than ordinary buyers of newbuilds, allowing the builders to increase their prices while also maintaining their almost unrivalled record of delivering entirely unsatisfactory products. Note this is not just about shoddy quality and design, but also the sale of leasehold houses with escalating ground rents, which made up 18 per cent of Help to Buy house sales in early 2017. Nasty.

...



You’ll be wondering where all the extra money goes given that it clearly isn’t being paid to the architects or building material suppliers. The clues are in the results. Look to Persimmon, developer of some of the meanest looking houses in Britain (don’t take my word for it, go and look on their website). Half of its sales are Help to Buy. Pre-tax profits have just passed £1bn. Operating margins have just hit a record 30.8 per cent. Think about that: this isn’t a company, it’s a state-sponsored taxpayer exploitation machine.

Still, at least we aren’t alone in being exploited by the sector. The first-time buyers are our fellow patsies. The very existence of Help to Buy forces up house prices in general by creating new demand. But first-time buyers also have to buy new build to get Help to Buy cash. That means that on top of the general price rise, they have to pay the average 16 per cent new-build premium as well as the “just because we can” premium that comes with buying a Help to Buy classified home.



Then, after five fee-free years, they have to start paying interest on our loans to them1.75 per cent for the first year, rising at RPI rather than the lower and supposedly government-preferred inflation measure CPI, plus 1 per cent a year until the loan is paid off. The average APR assumed by the scheme is 5.2 per cent. For context, note that Virgin has a 10-year fixed-rate mortgage on offer at 2.7 per cent.

There’s more. The taxpayer loan to the buyer really is an equity loan, so what must be paid back is a percentage of the value of the house at the point of sale. If you borrowed £40,000 to buy a house for £200,000 (20 per cent) and the value rises to £400,000, you have to pay back £80,000 (on top of the interest, of course).

 

 

 

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I agree.

In London this year may be interesting. 

Anyone buying on HTB in 2013-2015 may be OK, as there was equity gains from that period.

After 2016, with exception of a couple of areas, prices are flat or less. 

2021 is the year the loan payment kicks in, and with stuff like EWS1, SVR, unemployment, reduced investor appetite, there could be some real forced sales. A lot of the properties bought with HTB in London were the new build flats, which compare quite unfavourably with other properties even before the pandemic.

In 2017 one I saw was £475k - built in 2016 and attempting to be flipped for a £50k profit (before costs). It sold, as well. Nowadays there are lots of flats for sale in that block and the lowest asking price is now £425k and looking weak. The same money gets you a nice 3-bed semi with no £250 monthly charge. It's half a mile more out from the station but in these times that hardly matters as much now.

Personally I think there will be several people among the 2016-2019 HTB who will find if they sell they will lose their entire deposit thanks to declining values.

No doubt it will be presented in the papers as some kind of sob story and they need to be bailed out, a bit like the crappy stories about £500k new built flat owners not being able to afford £10k for EWS1 repairs.

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22 minutes ago, Boon said:

I agree.

In London this year may be interesting. 

Anyone buying on HTB in 2013-2015 may be OK, as there was equity gains from that period.

After 2016, with exception of a couple of areas, prices are flat or less. 

2021 is the year the loan payment kicks in, and with stuff like EWS1, SVR, unemployment, reduced investor appetite, there could be some real forced sales. A lot of the properties bought with HTB in London were the new build flats, which compare quite unfavourably with other properties even before the pandemic.

In 2017 one I saw was £475k - built in 2016 and attempting to be flipped for a £50k profit (before costs). It sold, as well. Nowadays there are lots of flats for sale in that block and the lowest asking price is now £425k and looking weak. The same money gets you a nice 3-bed semi with no £250 monthly charge. It's half a mile more out from the station but in these times that hardly matters as much now.

Personally I think there will be several people among the 2016-2019 HTB who will find if they sell they will lose their entire deposit thanks to declining values.

No doubt it will be presented in the papers as some kind of sob story and they need to be bailed out, a bit like the crappy stories about £500k new built flat owners not being able to afford £10k for EWS1 repairs.

Disagree.

North has been flat since ~2004.

London has been falling since ~2015ish.

HTB has been going for @~6 years, the bulk took off ~4 years ago.

And London HTB is invariably going to be flats, of the inflammable cladding type.

new builds typically have a ~10-15% premium p daft wimmin.

HTB new builds appear to be 20-30% - taking all that 'help' plus some more.

For each 100k of HTB from ~5 years ago, they are going to be down ~30k

Persimmon builds are beyond shit. I think theres a chance theres going to be a massive scandal on Perssimon build quality and HTB.

 

The numbers involvedled in HTB are about ~50k/year. Thats about 1 months mortgage sales i.e. HTB are only below 10% of the mortgaged buyers.

The new estates near me - mainly in Scabby - are in a terrible state.

The numbers are ~20% social housing -crappier, smaller builds than the rest of the estate.

Of the remaining 80% about 50% have been snapped up by BTLers, whove put in scum that the LA dont want.

Theres already a fair few new buyers (non HTB) exiting as the scum percentage is too high.

One of mrs spys work mates is a HTBer. I think shes got ~1 years  left before the 20% 'help' is due.

Shes already saying that buying the house was 'Here worse decision ever' previously that was marrying her hubby.

As that equity loans kicks in and gets more n more expensive, shes going to regret it more.

HTB has removed a large nubmer of FTBs er from the future housing market. These people will not be second stepping - they are stuck in their HTB til they pay it off or go bust

Same as IO BTL - it removed FTB from smaller housing, so ~35yo are FTB rather than second buyers. They dont have equity to bid for people selling family homes.

The market that a 60yo+ home owner has to sell to is tiny now.

 

 

 

 

 

 

 

 

 

 

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2 hours ago, spygirl said:

Persimmon builds are beyond shit. I think theres a chance theres going to be a massive scandal on Perssimon build quality and HTB.

 

I wish. The government could easily make new builds undesirable, by simply letting people know how shite they are. Amazingly, many people still think new = less stress. Particularly FTBers who don't know how to repair a tap valve, or the boomers and pensioners with ailments who don't want the stress of adding Hammerite to the guttering every few years ("I can't climb a ladder, I'm too lazy I've got a bad back").

If people know that new builds were in 90% of cases absolutely awful then there would be no need for much else to be done, the market would fall. If new builds aren't powering the market then the entire house of cards collapses. If they were rendered un-buyable then this would be great.

But I can't see it :(

Edited by spunko
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29 minutes ago, Green Devil said:

No need to worry yourselves. RISHI has a magic money tree with an infinite supply of money.. Maybe they'll be a Help to Repay Help To Buy HTRHTB scheme? 

 

Well it is sort of magic. Every time he bungs another £1,000 to a 1st time buyer every other house in the UK goes up by £1,000 ... It's magic!

 

Edited by XswampyX
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17 hours ago, spunko said:

I wish. The government could easily make new builds undesirable, by simply letting people know how shite they are. Amazingly, many people still think new = less stress. Particularly FTBers who don't know how to repair a tap valve, or the boomers and pensioners with ailments who don't want the stress of adding Hammerite to the guttering every few years ("I can't climb a ladder, I'm too lazy I've got a bad back").

If people know that new builds were in 90% of cases absolutely awful then there would be no need for much else to be done, the market would fall. If new builds aren't powering the market then the entire house of cards collapses. If they were rendered un-buyable then this would be great.

But I can't see it :(

I do.

Persimmon are not the government.

When the HTB shit hit the fans UKGOV will be looking for someone to throw under the bus.

Persimmon fits it perfectly.

 

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18 hours ago, spunko said:

I wish. The government could easily make new builds undesirable, by simply letting people know how shite they are. Amazingly, many people still think new = less stress. Particularly FTBers who don't know how to repair a tap valve, or the boomers and pensioners with ailments who don't want the stress of adding Hammerite to the guttering every few years ("I can't climb a ladder, I'm too lazy I've got a bad back").

If people know that new builds were in 90% of cases absolutely awful then there would be no need for much else to be done, the market would fall. If new builds aren't powering the market then the entire house of cards collapses. If they were rendered un-buyable then this would be great.

But I can't see it :(

One of my kids asked me today why I have always bought old houses (the youngest was 75 years).  My answer was : because most houses built in the past 40 years will fall down before they get to 75 years old.

 

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22 hours ago, spunko said:

'ckinell. I didn't realise there was such as thing as Help To Buy for second time buyers.

Help to Buy isn’t just for first time buyers. If you’re looking to move to a bigger, newer home in a great location, Help to Buy means you can move without needing a huge deposit, and with more manageable mortgage payments.

How rife is this shite? When they say "second time" buyers does that mean boomers buying second homes?!

£600,000 maximum in England? (£300k Wales, £230k Scotland)

Osbanker planned it that way in 2013
 

Quote

 

Help to Buy scheme could be exploited by second homebuyers

Gideon refuses to rule out possibility that wealthy homeowners could fund a second property through the mortgage guarantee scheme

 

20% of sales were existing homeowners by 2018

Quote

 

Research last week revealed that one in five households which had used the scheme had upgraded their home, rather than bought a new property, the Sunday Telegraph reports. Since it was launched, almost 170,000 families have taken advantage, of which 136,700 were first-time buyers.

https://metro.co.uk/2018/09/02/help-to-buy-scheme-facing-axe-because-its-only-helping-wealthy-people-7904979/?

 

 

 

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15 minutes ago, Democorruptcy said:

£600,000 maximum in England? (£300k Wales, £230k Scotland)

Osbanker planned it that way in 2013
 

20% of sales were existing homeowners by 2018

 

 

HTB wasnt the banks' idea.

AFAIK the main HTB mortgage providers are Nationwide and HBOS. Few other banks would touch the HTB with a barge pole.

A year or two ago the nationwide were making a big fuss about the lack of interest by the other banks in mortgaging HTB mortgages.

HTB are going to be worse than Northern Rocks 125% mortgages.

 

 

 

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1 hour ago, wherebee said:

One of my kids asked me today why I have always bought old houses (the youngest was 75 years).  My answer was : because most houses built in the past 40 years will fall down before they get to 75 years old.

 

The good thing about older houses is nothing has to be perfectly straight. I wall mounted a TV the other day, didn't use a spirit level even, because what's the point if the walls and beams are all wonky? It would have looked silly if it was dead straight, in fact it probably would have looked wonky.

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9 minutes ago, spunko said:

The good thing about older houses is nothing has to be perfectly straight. I wall mounted a TV the other day, didn't use a spirit level even, because what's the point if the walls and beams are all wonky? It would have looked silly if it was dead straight, in fact it probably would have looked wonky.

We recently mounted a wall clock on a wall. There is no way I can get it aligned straight relative to anything. 

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10 minutes ago, spunko said:

The good thing about older houses is nothing has to be perfectly straight. I wall mounted a TV the other day, didn't use a spirit level even, because what's the point if the walls and beams are all wonky? It would have looked silly if it was dead straight, in fact it probably would have looked wonky.

Sometimes as  tradesman you have to fit things by eye and put the spirit level down. It just looks better that way. Shadow lines etc.

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14 hours ago, spygirl said:

I do.

Persimmon are not the government.

When the HTB shit hit the fans UKGOV will be looking for someone to throw under the bus.

Persimmon fits it perfectly.

 

Wasn't the Persimmon CEO the first ever House builder CEO to get a £100 million bonus,, And all the cash came from Help to Sell..

Which is why they fund the Tory party

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7 hours ago, macca said:

Wasn't the Persimmon CEO the first ever House builder CEO to get a £100 million bonus,, And all the cash came from Help to Sell..

Which is why they fund the Tory party

From 2011, when youd' expect and 'donations' from house builders to be happening.

https://www.thebureauinvestigates.com/stories/2011-09-30/the-biggest-conservative-donors-from-beyond-the-square-mile

Property develeopers barely register.

 

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11 hours ago, spygirl said:

From 2011, when youd' expect and 'donations' from house builders to be happening.

https://www.thebureauinvestigates.com/stories/2011-09-30/the-biggest-conservative-donors-from-beyond-the-square-mile

Property develeopers barely register.

 

I used to have to look after a friend's lad after Saturday school sports when he would nip up to Downing Street for his fortnightly handing over the brown envelope consultation meeting.

 

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It appears that lettings agent chain "Leaders" is getting in on the 'part rent part buy' party.

This one is the 3rd property I've seen to be listed in this way. The other two I didn't take much interest as I'd assumed they were built as shared ownership (newer builds). This one's a traditional terraced house:

https://www.rightmove.co.uk/properties/100484441

_20201127_121528.JPG

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3 hours ago, UmBongo said:

It appears that lettings agent chain "Leaders" is getting in on the 'part rent part buy' party.

This one is the 3rd property I've seen to be listed in this way. The other two I didn't take much interest as I'd assumed they were built as shared ownership (newer builds). This one's a traditional terraced house:

https://www.rightmove.co.uk/properties/100484441

_20201127_121528.JPG

https://yourhome.org.uk/

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