Reply to: What could go wrong with Skipton's offer?

[NigelJK]

I moved into a new build last year. There's maybe 100 houses on it. There are houses which were designated as 'social housing' and many were assigned a housing association to own them. There is probably 15 of them, including a bungalow intended for OAPs. They are all less decorative and have no garages and only short drives. Good builders (and other industries) understand that maximising profits is not always the best way to stay in business.

[courtg9000]

I thought there were rules on a certain % being set aside as social housing which would be genuinely affordable but that may have changed in the last decade assuming I understood it properly in the first place. I definitely do remember reading complaints from people that their nice professional middle-class estate was forced to have a certain number of "chav houses"

There are ways around this, but it can be got around, getting around it is typically not that difficult either. It does cost time and money but for the developer or the development partners that can often be money well spent.

[d000hg]

There's also the "affordable housing" con, where a percentage of any new estate has to be "affordable" - meaning they are slightly smaller overall and closer together than the full price versions but still sell for 5 times anyone's annual salary.

I thought there were rules on a certain % being set aside as social housing which would be genuinely affordable but that may have changed in the last decade assuming I understood it properly in the first place. I definitely do remember reading complaints from people that their nice professional middle-class estate was forced to have a certain number of "chav houses"

[NigelJK]

I doubt very much that they can make the 'first time' bit stick. Statute of Limitations prevents them from searching further than 7 years. I had a house repossessed (when IR35 came in and the market got cold feet) but was still allowed a mortgage recently. No mention of the previous fault.

[malvolio]

Yes, I get that. My point was that I seem to recall many years ago you could be considered a first time buyer if you'd not had any mortgage or home ownership for a number of years. The rationale being that you'd been out of the property market for long enough to be in much the same position as a first time buyer.

Let's not forget that "First Time Buyers" - defined how you will - are the drivers of the housing market; without them the ones already in their own home aren't able to move up the chain easily meaning they are chasing fewer properties meaning house prices go up.

House prices won't come down to any significant extent until we build a lot more than we have so far, but getting the market moving like it was 20 years ago would stop them going up at a stupid rate - mine has appreciated around 37% since we bought it seven years ago, not counting the improvements we've made to it. The boring three bed ex-council semi we sold in London in 1979 for £12.5k is on the market now at around £1.5 million.

Also builders could build properly affordable properties quite easily; no central heating, no fitted kitchen, and so on, but nobody would buy them and the margins are too small to attract the builders anyway...

There's also the "affordable housing" con, where a percentage of any new estate has to be "affordable" - meaning they are slightly smaller overall and closer together than the full price versions but still sell for 5 times anyone's annual salary.

[ladymuck]

the clue is sort of in the name First Time Buyers, but of course they have no intention of giving you access to a sensible home if they did they would build more their intention is just to push the prices up.

Yes, I get that. My point was that I seem to recall many years ago you could be considered a first time buyer if you'd not had any mortgage or home ownership for a number of years. The rationale being that you'd been out of the property market for long enough to be in much the same position as a first time buyer.

[vetran]

This offer was being discussed on the radio this morning so I thought I'd take a look at the terms. Max loan size is £600k and, based on the rent I pay, the max they'd lend me is just over £540k.

However, their definition of a first time buyer is someone who has never owned or part owned property, even if they've never lived in it (e.g. inherited then rented, BTL). So me last owning property over 15 years ago means I'm not eligible.

I wonder when that changed? Last time I looked at mortgages you could get a FTB mortgage if you'd not had a mortgage for some years (I forget how many).

the clue is sort of in the name First Time Buyers, but of course they have no intention of giving you access to a sensible home if they did they would build more their intention is just to push the prices up.

[ladymuck]

Watch what happens when you apply and they do a credit check even if you have a hope in hell of getting the deal. it would be along the lines of "im sorry Ladymuck we cannot offer you this deal because of x y and z - (expect this to be either arcane or ridiculous or both) but we can offer you this deal - yes its more expensive but you do get a parker pen and a free bill and ben the flowerpot men cassette tape".

I have no intention of applying, I have enough parker pens!

[courtg9000]

This offer was being discussed on the radio this morning so I thought I'd take a look at the terms. Max loan size is £600k and, based on the rent I pay, the max they'd lend me is just over £540k.

However, their definition of a first time buyer is someone who has never owned or part owned property, even if they've never lived in it (e.g. inherited then rented, BTL). So me last owning property over 15 years ago means I'm not eligible.

I wonder when that changed? Last time I looked at mortgages you could get a FTB mortgage if you'd not had a mortgage for some years (I forget how many).

Watch what happens when you apply and they do a credit check even if you have a hope in hell of getting the deal. it would be along the lines of "im sorry Ladymuck we cannot offer you this deal because of x y and z - (expect this to be either arcane or ridiculous or both) but we can offer you this deal - yes its more expensive but you do get a parker pen and a free bill and ben the flowerpot men cassette tape".

[ladymuck]

This offer was being discussed on the radio this morning so I thought I'd take a look at the terms. Max loan size is £600k and, based on the rent I pay, the max they'd lend me is just over £540k.

However, their definition of a first time buyer is someone who has never owned or part owned property, even if they've never lived in it (e.g. inherited then rented, BTL). So me last owning property over 15 years ago means I'm not eligible.

I wonder when that changed? Last time I looked at mortgages you could get a FTB mortgage if you'd not had a mortgage for some years (I forget how many).

[DealorNoDeal]

The new thing is to actually extend the repayment term to up to 40 years.

That probably only makes a big difference to the monthly payments when interest rates are really low. With interest rates around 5%, most of the monthly payment is interest, and extending the term probably doesn't reduce the payment by a huge amount.

Moreover, with a 5% rate and 100% LTV, a repayment mortgage doesn't offer that much protection to the lender because hardly anything is repaid in the early years.

[d000hg]

Can you even get domestic interest only mortgages any more?

Sure, why not? They are particularly common on BTLs too.

[SueEllen]

Can you even get domestic interest only mortgages any more? My first mortgage was 100% with a further loan to cover fees etc - worked out at about 102%.

Just did a Google - Skipton have them.

The new thing is to actually extend the repayment term to up to 40 years. Then when people get pay rises or some money, they can remortgage and reduce the term.

[b0redom]

Can you even get domestic interest only mortgages any more? My first mortgage was 100% with a further loan to cover fees etc - worked out at about 102%.

There was no way I could have afforded to find a 10% deposit up front. This was back in the early 2000s though. For some people it makes sense.

[WTFH]

The mortgage is secured on the property, so it's the lender's tough luck if the property is worth less than the mortgage.

Hence the suggestion above of making it an repayment-only mortgage, which is lower risk for the lender than interest only.