House price propping up goes national

[Spacecadet]

BBC News - Budget 2011: Osborne to promise first-time buyers help

The Budget will include a £250m package designed to help 10,000 first-time buyers to purchase a newly built flat or house, the BBC has learned.

Under the scheme, those struggling to find the deposit necessary to get a mortgage will be able to share the cost with the government and builders.

[AtW]

B0ll0x.

The best help first time buyers can get is not some artificial way to get overstretched by getting ridiculous mortgage, but by making sure that no dirty spekulation using debt can happen in the real estate: 25-30% minimum cash deposit required, 3x salary max mortgage - this would cause proper adjustment in house prices and make actual 25% deposit affordable.

[administrator]

Nice pic of Gidders! Looks v serious...

Seems to be more of a headline grabber than a real prop to the market.

Mr Osborne will also announce £250m to help 10,000 first-time homebuyers purchase newly built flats and houses.

40,000 mortgage approvals per month at the minute - not sure what % are first time buyers but seems to be that end of the market that is suffering.

How many FTBs are getting new properties too? They all seem to be tulipty shoe boxes and more likely bought up by BTLers so not sure it will be too popular.

The buyer would have to put up 5% of the cost, while the government and home builder would both put up 10%.

So they buyer would still need to find 85% mortgage - not easy at present I reckon.

£250m / 10,000 = £25K per FTB. Assuming this is the 15% = support for the cost of a £166,666 property on average. Purchaser would need a £140K mortgage still or thereabouts. With lending ratios dropping back to 3.5 times or so then this would mean support for someone on £40K.

Seems like a non-story to me.

[PAH]

So it's obvious the government will try anything to keep house prices unrealistically high. Must be too much riding on it to allow the natural deflation to occur that already has done in USA and is happening in other parts of the EU (Spain, NI).

Just looking at some properties on nethouseprices to see that they've more than doubled in value in the last 10 years makes me think this is ultimately unsustainable. Wages certainly haven't doubled in that time.

I can't see how this can end well for those buying now when prices do seem to be coming down in lots of areas. Only takes interest rates to go up significantly and many will be in negative equity and financially over stretched, and worried about losing their jobs.

[MrMark]

So it's obvious the government will try anything to keep house prices unrealistically high. Must be too much riding on it to allow the natural deflation to occur that already has done in USA and is happening in other parts of the EU (Spain, NI).

Just looking at some properties on nethouseprices to see that they've more than doubled in value in the last 10 years makes me think this is ultimately unsustainable. Wages certainly haven't doubled in that time.

I can't see how this can end well for those buying now when prices do seem to be coming down in lots of areas. Only takes interest rates to go up significantly and many will be in negative equity and financially over stretched, and worried about losing their jobs.

This and bombing Mid-Eastern countries. Have we voted in a disguised NULAB party?

[minestrone]

B0ll0x.

The best help first time buyers can get is not some artificial way to get overstretched by getting ridiculous mortgage, but by making sure that no dirty spekulation using debt can happen in the real estate: 25-30% minimum cash deposit required, 3x salary max mortgage - this would cause proper adjustment in house prices and make actual 25% deposit affordable.

Out of the mouth of a one party state babe.

It is called buying votes and if they spend a couple of billion a year on it to stop Labour getting back in with their 160 billion annual defecits then it is money well spent.

[minestrone]

So it's obvious the government will try anything to keep house prices unrealistically high. Must be too much riding on it to allow the natural deflation to occur that already has done in USA and is happening in other parts of the EU (Spain, NI).

Just looking at some properties on nethouseprices to see that they've more than doubled in value in the last 10 years makes me think this is ultimately unsustainable. Wages certainly haven't doubled in that time.

I can't see how this can end well for those buying now when prices do seem to be coming down in lots of areas. Only takes interest rates to go up significantly and many will be in negative equity and financially over stretched, and worried about losing their jobs.

I cannot really see 10,000 first time houses making any impact on the nations house prices and these houses will not increase in value because of the funding. The nation needs a leveling house prices over the next 10 or 20 years and I do not see it as a problem to help some in the community while that goes on, after all it was Labour's fault they cannot buy a house and this Government quite explicitly sets itself out as a Government to cure the problems of the last.

No different to what Thatcher did.

[TimberWolf]

We aren't in the buying votes before poll day stage yet either, this is economic pain that will have been forgotten by election day and things will be better by then of the government cycle.

[minestrone]

We aren't in the buying votes before poll day stage yet either, this is economic pain that will have been forgotten by election day and things will be better by then of the government cycle.

While that may have been true in the past this collation are buying Lib Votes every day.

THis government does not have a fixed term and never will have.

[PAH]

I cannot really see 10,000 first time houses making any impact on the nations house prices and these houses will not increase in value because of the funding.

I agree with that, but it is going to trap gullible first time buyers pressured by family/friends/partners into buying an overpriced property in a falling market. Which is fine if they can continue to afford the payments and continue to be in employment.

Though with the latter there's always the mortgage interest relief they can claim if unemployed.

Lots of meddling due to too many people being trapped in the massive bubble that's grown over the last decade.