Options
20% Reduction For First Time Buyers
Master Ozzy
Posts: 18,937 Forum Member
✭✭
Heard this on the news today and have been looking it up online. I'm sure I heard that you would have to live in the house and be renting it for seven years before you could then buy it. Is this right?
0
Comments
They need to make more of an effort building affordable properties that are available to first time buyers not property investors.
Round here you can get a 2 bed house for around 70k. To someone young thats a lot of money. To an investor thats a cheap buy that they can make a fortune from renting it out to the very people who would buy it if they stood a chance.
at least double that round here [in a shitty area] but more likely three or four times as much anywhere average
What's to stop someone buying such a property? You can't really make it that much cheaper unless you practically give them away. £7K deposit and 5% mortgage would cost £370 pcm (£270 interest only). That's £4500 per year; even minimum wage jobs pay £12K.
That's assuming FTBs want to start with a 2-bed house; many make do with a 1-bed flat first.
You've got to draw the line somewhere.
Why? Why not offer it to all first time buyers? Why discriminate on age?
To piss me off for a start.
Help yes, but what would really help would be all house prices coming down so that the cheapest ones would come within the reach of first time buyers on affordable mortgages.
The only way to do that is to disincentivize buy-to-let, enforce rent control and demand high-spec requirements on rental properties etc.
There are loads of houses and thousands of people stuck in rentals when they'd really rather be an owner-occupier.
So you can pay off a 25 year mortgage before you retire
Yes basically. Keeps the banks happy.
Yes, coz banks should give mortgages to anyone who asks for one, that didn't cause any problems before, did it?:D
The banks don't care. The ever-expanding property bubble is keeping the economy afloat and if it all goes tits-up they know the government will happily bail them out while Joe Public foots the bill for the next 10 years.
Yup. I have a friend who is a first time buyer at 45. Earns good money, has a healthy deposit (20%) and could easily afford the repayments but is finding it hard to get a standard 25 year mortgage and 15 or 20 year ones are much more expensive.
10 years ago banks were lending to anyone with a pulse. Now it seems to have gone too far the other way.
The problem is ftb save up and see a 70k property but often get out bidded. Investors are probably willing to go up to 100k because they have the money to do so so can put in a higher offer.
I looked in our area and the cheapest properties are 2 bed terraces. A 1 bed flat is considerably more and rarer to find.
Thanks to Help to Buy, house prices have already seen a massive boost, with first-time buyers (and new build) prices surging nearly 15% nationwide these past 12 months - again, another great windfall for older home-owners and property developers.
If the government genuinely wanted to make housing cheaper for first-time buyers, they'd abolish Help to Buy, remove the countless market subsidies they've implemented, make BTL purchases harder (landlords have access to interest only mortgages, and have greater purchasing power) and allow local authorities to build more housing.
Unfortunately, any of those measures above would be detrimental to house price growth and current values. They simply will not happen.
Outside of London house prices are still lower than they were at the peak of 2007-8 after more than a decade of constant growth. Imagine what they would be now if the financial crisis had never happened.
The only thing which causes house prices to fall is a financial crash or a recession. We probably aren't due another one for at least 10 years.
That's the only thing that caused it last time.
There are lots of things that could be done fairly straightforwardly to cause a house price correction so that those prices would be equal to a sensible multiple of average earnings.
It won't happen though as no political party has the guts or inclination to do it.... After all, the MP expenses scandal showed how filthily MPs are involved in manipulating the rules to make the property market work for them.
I bought some Royal Mail shares and sold them quickly. Does that make me one of his "special friends"?