Help To Buy scheme. Good or Bad?

I feel bad for anybody who can only buy a house if they get a 95% mortgage. Have fun paying that off.
I mean seriously, as a home owner already i feel bad for the poor *******s trying to get on the ladder now.
It was difficult enough for me to get on, i had to leave london and move up north to find reasonable prices.
 
Tories are using broken window fallacies to help boost to economy.

Help to buy scheme is crap, it's just going to flog crappy new build houses to people who can't afford to buy a house (If you can't scrape together a deposit, you aren't reponsible enough for or aren't in a financial position to own a house).
Most of them will be in negative equity because they paid way more than the house was worth, on a crappy mortgage deal and a multitude of financial problems will ensue when they start paying back both a loan and mortgage.

Particularly when interest rates rise we will begin to see fallout, and then no doubt the **** lands on labours head because people are too shortsighted to see the cause isn't rising interest rates, it's the idiotic scheme in the first place.

Typical Tories, boosting a private sector firm's profits at the expense of the hardworking majority, in order to make their figures look better on paper.
 
And lets watch the London bubble house prices climb higher and higher.
No increase in supply and now everyone can get a hand on the ladder.
Simple supply and demand.
 
Getting people into more debt rather than fixing out the problem of high house prices. Without a significant increase in supply, this scheme will only drive prices even higher.

Unfortunately everyone in the main three parties has a vested interest in keeping them high.
 
Tbh I think people want things easy. If you can't afford a deposit then make some sacrifices so that you can. There are many things you could do :move in with parents, live somewhere shot for a few years get a better job etc etc
 
Natwee said:
But from what Ive read, the loan stays at a fixed percentage, rather than a value. So if you buy a house for 100k, you get 20k, but if you then sell for 150k, you pay back 30k, despite only borrowng 20, supposedly "interest free".
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It isn't as much a loan as it is them owning a percentage of the property. Yes the percentage is fixed, but that includes if the value of the property drops. If you cannot afford the total deposit and mortgage requirement for the property, this is totally worthwhile.

The loan is interest free for 5 years, If there was a couple buying then it seems a good idea if over the 5 years you could save enough between you to pay the loan off. Its when interest starts getting added that it seems to become a complete rip off.

Also after the 5 years, then its charged at 1.75% of the loan, and thereafter it increases at 1% higher than RPI. Bearing in mind that this is on top of the fact that youll always pay more than you borrowed if house prices rise, it just seems like paying interest on interest.
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Actually, the interest doesn't go up linearly like you think.

It starts at 1.75% (way lower than any mortgage offerings). Each year it rises by the RPI + 1%. That is not additive.

So if the RPI is 3%, your new interest rate will be 1.75x1.04 = 1.82%

It would take either many years, or significant rises in RPI for it to start to match average mortgage interest rates.

As a user of a similar scheme from 2010, it is great for people who want to get on the ladder but cannot save up the deposit. The only real problem is inflating of prices due to lack of supply. Still cheaper than renting though!
 
+1

I am astounded that people in their 20s/30s are so stupidly willing to accept 40% more debt servitude so that people like those politicians can be handed yet more unearned wealth now - haven't they and others of their generation taken enough from society already ???

With a little extra willpower and prudence, those 20s/30s could have a mortgage that is 40% lower and a much higher standard of living for the rest of their life - more disposable income to spend on productive activities that truly help the economy of this country recover for the long term, to the benefit of all.

digipeep said:
Tories only doing this to prop up the property m
arket, they have been doing it ever since they have been in power, low interest rates, quantitative easing aka printing funny money, now this latest scam.

In a nutshell house prices are at least 40% overpriced, the average UK house price at £170k is a joke, it should be around £100k. That is the crutch of the problem, far too high house prices. And of course politicians on all sides have their own little BTL empires on the side so no matter who gets into power they want to keep house prices as high as possible and ever start a new bubble.

It's terribly sad for people in their 20s/30s to get into so much debt to buy something that is vastly overpriced.
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Without regulation and control over prices, vendors and agents it will create bubble where dreamers will be encouraged to overbid on already inflated and unrealistic prices for very limited supply and manoeuvre themselves into long term stagnated or negative equity with unrealistic finance in places that do not dictate enough demand. Any change in regional employment market will them inevitably create chain reaction of unpaid finance, repossessions with negative values with London market as the only stabiliser.
 
digipeep said:
Tories only doing this to prop up the property market, they have been doing it ever since they have been in power, low interest rates, quantitative easing aka printing funny money, now this latest scam.

In a nutshell house prices are at least 40% overpriced, the average UK house price at £170k is a joke, it should be around £100k. That is the crutch of the problem, far too high house prices. And of course politicians on all sides have their own little BTL empires on the side so no matter who gets into power they want to keep house prices as high as possible and ever start a new bubble.

It's terribly sad for people in their 20s/30s to get into so much debt to buy something that is vastly overpriced.
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+infinity

this policy is a disaster and will only inflate an already over priced market.
 
digipeep said:
Tories only doing this to prop up the property market, they have been doing it ever since they have been in power, low interest rates, quantitative easing aka printing funny money, now this latest scam.
Click to expand...
Hmm, I didn't realise that the Tories control what the interest rates are.

You learn something every day.
 
it's good but only if there are strict rules and the banks don't lend to any tom dick and harry
we'll create another bubble and price first time buyers out again etc

they also need to build more affordable housing for people to buy!
 
It means I could potentially get a mortgage at the end of next year, which is nice.

However, I have some serious concerns its effect of the rest of the economy.
 
This is going to contribute towards another housing price bubble, which is bad news for everyone looking to buy for the first time, or move to a larger home (eg. those with a growing family).
 
I'd love to take advantage of this.

Only problem is with a dodgy credit history (all now sorted and paid off and no debt for the last 6 years) I doubt I would get accepted for a mortgage in the first place.

:(
 
hmmm

i can see the attraction if you have suddenly just decided you want to buy a house, but dont want to wait to save a deposit - and are good and actually save the deposit up once you are in

anyone else that takes up the offer is just going to default down the line when they cant pay it back (or get ruined on intrest fees)

im looking to buy next year, and have been saving for a deposit for about 6 months now, with another 8 to go, and its pretty boring and we would love to just get on with it and buy now. the overall mortgage amount isnt the problem, its that you need at least 20% deposit to get going and thats a huge amount of money if you live in the south, id need £60000 if I wanted (read could) to buy a house in the town I work in, as it is I have to drive 30-45 mins each way just to get the price down.
Not to mention the complete lack of building round here, nimbys just wont let any substantial amount of houses be built

I dont think the scheme will fix the problem, it may help a small amount of people, it will ruin a small amount too. for everyone else the price will just get inflated even more
 
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