Im calling it.....

Scam said:
Nonsense. Help to Buy was only launched in 2013, that's only 3yrs ago. The first BTL mortgages were available in the 90s, I believe.

HTB doesn't help (har har :rolleyes: ) but BTL has had a far, far worse impact.

Let's go back to 2007 and see what's changed. Oh, nothing!
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In the last ten years (albeit a short time) I have purchased 7 houses in various parts of the country (sold four of them in that time as well).

The largest increases I saw in both selling and buying without a shadow of a doubt was after HTB. I can only go on experience as a home owner, buyer and seller. If you had been on the housing market around that time buddy you would have witnessed the same.
 
Rifte said:
The largest increases I saw in both selling and buying without a shadow of a doubt was after HTB. I can only go on experience as a home owner, buyer and seller. If you had been on the housing market around that time buddy you would have witnessed the same.
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Thanks buddy, but seen as we're talking economics, markets etc. I'm perfectly happy to go on the history and stats rather than a single experience in the market.

I wouldn't deny prices rose a lot after HTB but that was merely making a problem worse. It only takes a quick look for some graphs on the matter to see how quickly house prices rose after BTL became more and more common. E.g. http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php
 
Scam said:
Thanks buddy, but seen as we're talking economics, markets etc. I'm perfectly happy to go on the history and stats rather than a single experience in the market.

I wouldn't deny prices rose a lot after HTB but that was merely making a problem worse. It only takes a quick look for some graphs on the matter to see how quickly house prices rose after BTL became more and more common. E.g. http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php
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I am sure you could pull out a list of google graphs etc to explain why you cant get on the housing market because of BTL.

I only have real life examples. The one that stands out for me is a new build property I bought in St Albans in mid 2002 for 230k off plan,and sold it to a FTB couple in late 2005 for 410k.

That increase was seen by the fact that FTBers do not have to go through the hardships of actually saving anything significant for a deposit. A completely artificial method of allowing FTBers to get on the market that drove the prices up.

I purchased in Bedford in 2013 and was initially looking for a newbuild (despite the initial poor investment value, the wife loves them). The prices were obscene! When I asked the sales rep why? FTBers and HTB.

Just real life examples.
 
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billysielu said:
why do you think it'll crash? I don't see supply or demand changing much.
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It depends entirely on what effect a drop at the new build high end has (they have dropped). Londoners with property aren't upgrading to relatively small premium high rise flats. Nor can even well paid londoners get a ftb mortgage for an 800k flat.

Developers don't want to be selling these properties at the same prices as current used London flats. They need a high markup. If a drop in price from the foreign cash investor flight pushes these prices into mortgagable territory for Londoners then I dont think anyone knows what will happen.

So much of the market is based on sentiment and liquidity of banks. Measures of house prices also look at things in very specific ways. If these 800k+ flats drop in price but it is transacted at higher than the average price, guess what happens to the average transacted price.
 
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Can't see you being right, unless we exit.
Then for most people a slump won't make it any easier to buy. You're well off and thus might have a huge despite so might be able to take advantage. But fir most people a crash would leave them in the same position as mortgage would be harder to get and more expensive. Meaning they can't afford the same value house as now.

Reforms needed to actually lower the cost and make it easier isn't on the books and isn't on any other parties books that have a remote chance of getting in. Our only hope is EU regulations, on some sort of right to affordable roof over your head.
 
Scam said:
Because 20% of £800k is £160k and even if you're earning £100k/yr it's going to take a very long time to save that!
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It's not - you're overlooking bonuses and family financial input.

Let's say you're a mid-level Associate at a decent bank - therefore someone with 4-6 years' experience, and maybe in their mid to late twenties. Typically you'll be on a base salary of £80,000-£100,000. You'd also receive other employee benefits which may cover your annual travel costs as well as a fair amount on your living costs (shopping, food, gym, phone, etc.). Your annual bonus may be around £50,000, some get more/some get less.

A fair amount of people in these situations will have a partner or spouse with a similar compensation set up. When you factor in the significant increase in parents, grandparents and other family members gifted large sums for property acquisition, then the ability to save up a 10%, 20% or 25% deposit on an £800,000 is readily achievable. It may make depressing reading, but it's relatively common.
 
Rifte said:
True...not sure if 0% or 5% is available yet, but 10% is a common deposit for FTBers
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5% is extremely common, there's several schemes supported by government to ensure banks don't lose out.
There are also a few "100%" mortgage, although they generally require say parents putting 10% into a savings account and they get it back after three years if you've kept up payments.

And this is partly why houses prices are so high, government keeps introducing schemes 5% mortgage to house equity share where you can buy like just 50% to begin with.
All it really achieves is pushing the market up. But as no party will u-turn on it, you might as well take advantage of them.
 
Scam said:
Because 20% of £800k is £160k and even if you're earning £100k/yr it's going to take a very long time to save that!
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fine for a couple though.. plus that 100k ignores bonuses which is where the deposit + mortgage over-payments can come from

that and the couple can each sell their 300-400k one bedroom places to buy the 800k place together, both of which will have gone up thus giving them more equity and an even bigger deposit
 
toshj said:
It's not - you're overlooking bonuses and family financial input.

Let's say you're a mid-level Associate at a decent bank - therefore someone with 4-6 years' experience, and maybe in their mid to late twenties. Typically you'll be on a base salary of £80,000-£100,000. You'd also receive other employee benefits which may cover your annual travel costs as well as a fair amount on your living costs (shopping, food, gym, phone, etc.). Your annual bonus may be around £50,000, some get more/some get less.

A fair amount of people in these situations will have a partner or spouse with a similar compensation set up. When you factor in the significant increase in parents, grandparents and other family members gifted large sums for property acquisition, then the ability to save up a 10%, 20% or 25% deposit on an £800,000 is readily achievable. It may make depressing reading, but it's relatively common.
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Thats not an typical average londoners wages/job.
 
Rifte said:
That increase was seen by the fact that FTBers do not have to go through the hardships of actually saving anything significant for a deposit. A completely artificial method of allowing FTBers to get on the market that drove the prices up.

Just real life examples.
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Whilst I agree that anything that helps people to be able to buy will have some degree of impact on demand, HTB is a very minor factor in the recent history and continuing upward spiralling of property.

HTB was introduced so that people would have greater access to getting a property if they had a 5% deposit. HTB was introduced because house prices were already so high that saving for 10%-30% deposit for most people on average and even well above average wage was proving impossible. Before HTB was introduced and pre-recession, it was common place for banks to be giving 100% and also 100%+ mortgages under less strict conditions. I therefore fail to see how HTB has created some kind of mega demand as its now so easy for people to buy when in fact it used to be much much much easier to buy as you didn't even need a deposit to get on the ladder.
 
Its kept the demand, now that 100% mortgage aren't easily available.
Without HTb or freely available 100% mortgage demand would significantly drop at current prices. It would at the minimum reduce the price increase.
So HTB does in fact make a huge difference in house prices.
 
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