Help to Buy Scheme Should Really Be Named Help For Bankers Scheme - Discuss

JBod said:
I rent my house in the UK out while I am in California, the rent exceeds my mortgage. I am hoping to save enough money while out here to have enough to get another house for me and my family to live in when we return and carry on renting out my old house.

I think instead of fighting against change people need to work with the system.

As a culture British people are way too hung up on owning their property and leaving the nest.

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

One of the reasons the financial industry gets attention now is the same reason that old industry did decades ago. It is the key industry for our country and the only reason we can even consider leaving the EU.
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Unfortunately as your link points out the rental market is very different in Germany. Longer term, more stable leases, able to modify your rental property slightly to turn it into your "home" and lower, more stable rents are three of the bigger ones.

People will happily spend decades in the same rental (quite possibly the lower floor of the landowners house - much bigger houses), painting their walls the colours they want etc., whereas here people move around a lot more, can get into trouble for putting up pictures and can have significant rental increases, while living in a poorly looked after property.

Things would have to change significantly in the UK rental market for people not to want to own their own homes.
 
JBod said:
I rent my house in the UK out while I am in California, the rent exceeds my mortgage. I am hoping to save enough money while out here to have enough to get another house for me and my family to live in when we return and carry on renting out my old house.

I think instead of fighting against change people need to work with the system.

As a culture British people are way too hung up on owning their property and leaving the nest.

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

One of the reasons the financial industry gets attention now is the same reason that old industry did decades ago. It is the key industry for our country and the only reason we can even consider leaving the EU.
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It's not just house prices which are out of kilter with wages. Rents are too. They are broadly aligned with what mortgage repayments would be for a given property ; it would not make financial sense for a landlord to let a property for less than their mortgage repayments.

Home ownership is seen as the preferred tenure type in this country due to lack of regulation in the private rental sector, unscrupulous estate agents who charge exorbitant fees, relatively insecure tenure, and ultimately the fact that the rent you are paying is effectively paying off someone else's mortgage repayments.

In contrast, the German rental market is somewhat different. Rents are far more reasonable in relation to wages, rent controls are in place (limit rent prices/increases), they have a more elastic housing supply thanks to a more liberal planning system, longer term tenancies, and institutional landlords (far preferable to renting from the shower of amateur "Mom & Pop" landlords we get in this country ).

Ultimately, rising property costs and insecure tenure are having a negative effect on living standards for a large swathe of society, particularly younger people who were not able to buy when prices were cheaper.
 
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Scam said:
Fubsy, if you don't mind me asking does your rent generally cover your mortgage up there? My other half has long thought about doing that (she's from Leeds) but was a bit worried about the maths, and obviously joining the dark side.
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Mortgage payments fixed atm will be under £200 p/m and the average rent for the area is £550 p/m. This shouldn't be happening and I actually feel dirty, but being stuck in the trap for so long and paying landlords to pay their mortgages, when the opportunity came up to get on the ladder means that we'll at least be paying towards something that will be ours for once.

I've only been renting for 3 years and already spent £22k clearing off someone else's mortgage. It's just sad that we couldn't get a deposit together before we moved down here but in proportion to earnings, it's hard to get a deposit together in the area you live, north or south - but living in the south with the extra earning potential you can find somewhere cheap enough to rent and buy cheap up north. That's broken.

Edit: I should mention that we are very lucky to have someone offer to manage/take care of issues with the property/tenant while we are down here. That was a big thing for us.
 
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Having recently bought my first home after renting for 15 years. I refused to consider the HTB scheme. It is not a safe financial option in my opinion. It forces people into buying a property above their own means and for the first 5 years it's OK... after that "oh dear" is all I can say.

I spent time saving a deposit instead and did a 10% deposit standard mortgage on a 140k home.
I'm really happy with it my repayments are <£600 a month.
Prior to this I was renting at £695 a month.

Thanks for the monthly savings.
 
The sensible thing to do on paper is get 10% or more deposit and buy a house. But with the prices high and rising fast in some places this is becoming impossible.

Were buying our first house and its nearly £400k! The deposit plus SDLT plus fees mean we need well over £50k in cash. We have only been able to do it due to an inheritance and borrowing from parents. There's no way we could have saved that on our own, especially while paying rent that is more than we will be paying in mortgage payments.

We are going to be considerably better off once we own a house and have £340k of debt, than we are now with no debt and renting somewhere a bit crap. That's pretty screwed up.
 
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My sisters place in SW London has gone up from £210K to £440K in 3 years....
My mums in NE London bought for 13k in 1972 is now £330K

Something has to give way or be made to give way. Political suicide or not someone needs to take responsibility.
 
Also, don't forget, that the earning power of women has also increased. Traditionally, the family consisted of dad as the main breadwinner and mum staying at home. Nowadays, the woman is likely to earn more than the man and both work full time until having children in their late 20's / early 30's. This means that the amount a couple would be looking to spend on their 1st home would be more today than it would in the 60's.

Additionally, the population is growing at around 400,000 - 500,000 people per year, driving demand for housing. Land is a finite resource, as more is used the remainder goes up in value, hence the more land we use for housebuilding the more the prices of houses goes up.
 
House prices will go up. That's a fact of life and anyone who hopes otherwise is kidding themselves.

But, house prices rising at 10%+ a year is stupid. We don't need the market to collapse, that's a bad thing. What we need is for it to slow to a realistic pace.
 
OP, do you own a home? I'm guessing not and there's self-interest in your message.
I cannot take your view too serious because of "The banks were bailed out with public funds in 2007 instead of letting the property market correct" :).

I don't disagree with the fact that house prices are high today but if the banks were not bailed out in 2007 there would have been a lot worse outcomes than the property market correcting.

And also, the property markets did correct after 2007 or have people already forgotten that? In most of the country properties were something like 20-30% lower for a while, if you could find a buyer at all. IMO it's only the last few years property prices have recovered significantly. A neighbour of mine had a property on the market for 5 or 6 years, only selling it a year or so ago

If the banks were not helped out in 2007 just maybe capitalism as we know it would have ended and riots would have been on every street corner. I know I would not have taken lightly to my savings being wiped out.

If you want lower property prices then the next couple of years could bring them if the stock market continues in bear territory - stock market crashes are often followed by lower house prices. Because the property market is an inefficient market it takes a while usually for the market to drop. Personally I think the stock markets are just taking a breather however but if the FTSE does have another leg down I think that will filter through to property prices and the withdrawl tax benefits to landlords would be a double whammy - property investments simply won't work for many with big mortgages.
 
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I did it all myself. Saved for 5 years. Bought a house, put 15% down. Currently paying 380 a month mortgage.

Renting is £500 per month minimum around here. I now own about 15.5% of a 3 bedroom.

That's why renting makes no sense.
 
danielanthony said:
Also, don't forget, that the earning power of women has also increased. Traditionally, the family consisted of dad as the main breadwinner and mum staying at home. Nowadays, the woman is likely to earn more than the man and both work full time until having children in their late 20's / early 30's. This means that the amount a couple would be looking to spend on their 1st home would be more today than it would in the 60's.
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This naturally had some impact on house prices and rents, though whether or not requiring a two income house hold is desirable or linked to declining birth rates is another topic for debate ;)

The issue being tackled in this discussion is the the fact that the government launched various monetary initiatives under the guise of "help to buy", in order to continue inflating house prices, which had been slowly stagnating up until the launch of the scheme. For further information on what I'm referring to, please see my previous post here.


danielanthony said:
Additionally, the population is growing at around 400,000 - 500,000 people per year, driving demand for housing. Land is a finite resource, as more is used the remainder goes up in value, hence the more land we use for housebuilding the more the prices of houses goes up.
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A crazy rate of growth and we are building nowhere near enough houses. The argument about a lack of land is complete nonsense. Less than 10% of the land mass of this country is actually developed, with less than 3% of land actually built on

We have an artificially induced supply side shortage, caused by an outdated and over restrictive planning system. The existing legislation was devised in an era when the state was building hundreds of thousands of council houses per year, and there was less reliance on private construction. This has seen little change since it's inception, bar the pretty much wholesale abolition of council house construction.

In short, although we have dual income households (both people now have to work), house prices are still misaligned with wages - even for dual earners. Further more, houses haven't materially changed, so it is neither desirable or just that a house previously affordable with just one wage should now require the debt enslavement of two working people.

Ultimately, what we are seeing for many is a reduction in living standards ; less disposable income, less quality family time for children (both parents at work), less living space etc.

How can this possibly be seen as progress?
 
The Running Man said:
I did it all myself. Saved for 5 years. Bought a house, put 15% down. Currently paying 380 a month mortgage.

Renting is £500 per month minimum around here. I now own about 15.5% of a 3 bedroom.

That's why renting makes no sense.
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Renting does make sense, it all depends on your circumstances. I've often rented while owning a home too due to being a freelancer.

Biggest shock to me recently is that in one part of the country I am buying a 4 bed detached house for £1000 a month, in London my company will soon be paying £1600 a month to rent a small one bed flat for me while I work there.
 
Yea you're company are paying that. It wouldn't make sense for you to pay that. Renting is perfect for a tiny amount of the population. So I kinda rented when I was at uni. Then rented from my parents and with a friend for a few years before buying a house. Renting only made sense because I didn't have enough for a deposit and was renting at artificially low prices I.e 200 quid a month all in.
 
Renting your primary residence in the UK is never the sensible long term option. Unfortunately it is the only option for a lot of people.

The idea of 'renting while saving for a Mortgage' doesn't really work due to the comparable cost of the 2 options.

Obviously my opinion is based on currently renting and having spent a painful 2 years trying to buy. As soon as I do have a mortgage I'm going to flip my opinion and be fully in support of any sort of scheme that pushes my house price through the roof :). I'm literally sat here now with a spreadsheet working out what house price increase I need in order to get from 90% LTV to 75% LTV within 2 years :p.
 
A terrible form of anti-capitalism massively distorting the markets to the benefit of the Government and Developers.

People not being able to afford properties would lead to a reduction in house prices in the long term (with changes to BTL as well). All these schemes are designed to keep the bubble going to the detriment of future generations.
 
Not to sound all grandiose about it, but seen as the current 'young' generation are now deemed to likely never be as well off as their parents (mainly due to house prices) it truly could be the end of capitalism as we know it. There was a good piece in the guardian about it. If young people lose the will to strive and better themselves (because its a pointless exercise in the current economy) the whole idea of capitalism is a failure. There's going to be huge social ramifications..
 
radderfire said:
A lot of the reason is it's hard to buy a house is Buy to Let landlords, who have been given mortgages by the banks to expand and speculate in the property market. The physical number of houses in the UK is not the problem, it's the fact that the finance community has been allowed great control over housing and especially has been allowed to promote/enable Buy to Let landlords, again artificially boosting property prices. If it was left to real market conditions and natural economics, this wheeze would have been scuppered years ago, but instead the Government has used taxation to give money to their friends in the finance community to keep them going. This is why the UK is experiencing greater inequality, because those in power seem to have no qualms about taxing the poor and giving the cash to the wealthy to continue in their rentier ways. The people of Britain need to wake up to this fact and start complaining about it.
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I've got a few properties which I rent out, (12) they were wrecks when I bought them and they are all completely refurbished to a high standard. I'm a builder.

I want to sell them as it was always a short term venture. I approached every tenant and offered to pay their 5% deposit along with back up from the help to buy scheme. I bought the properties mid crash at extremely good prices with no competition with as much as 50% off pre crash prices which enables me to be able to offer this.

Not one took me up on the offer.

It's not the landlords fault at all.
 
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I took out HTB 6 months ago, its great for me. I was worried about paying for the HTB element in a few years time, so I got another job on £10k more a year. Also having a mate lodge with me for a while while he goes through a divorce and my student loan finishes in a year or 2.

In a couple of years I will add on the other 20% to the mortgage and come out of the scheme before my 5 years are up.
 
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