Sign in to follow this  
Followers 0
JOHN DOE

First-Time Buyer Plan 'May Allow 5% Deposits'

63 posts in this topic

Taxpayers could underwrite millions of pounds worth of mortgages for first-time buyers as part of a plan that may allow deposits to be cut to as little as 5%.

The Government is aiming to "unblock" the housing market and would target people who are currently priced out of getting a foot on the property ladder.

According to The Independent, having the taxpayer underwrite some mortgages would allow deposits for first-time buyers to fall from the current level of 20%.

It comes as the Government unveils a series of proposals designed to tackle a shortage of affordable homes.

Housing minister Grant Shapps confirmed to Sky News there would be a government-backed indemnity scheme.

"People have had to wait until they are perhaps 37 to get a foot on the housing ladder and save up the equivalent of a year's income after tax," he said.

"This scheme brings the industry together, the lenders with the builders, and allows the Government to do that extra little bit to get them across the finishing line in order to ensure people will be able to put down smaller deposits."

Mr Shapps said the money came from budget "underspends" and was not extra cash.

He earlier remarked to the BBC: "What we want to do is make it easier for first-time buyers... who say the biggest problem we have is the amount of deposit that we have to get together - that is their biggest blockage."

Asked about the potential financial pitfalls for the taxpayer, Mr Shapps said public money would not be put at "unreasonable risk".

He added: "The industry itself - the Council of Mortgage Lenders, the homebuilders - they've been working on these types of ideas for a very long time, many, many months, and are actually trying to help themselves.

"What Government can do, of course, is sometimes provide some sort of backstop but actually this is largely going to be an industry-led approach with support from the Government."

He said the money would be "recycled" - it would help developers or first-time buyers before coming back to the public purse to be "used again for something else".

The coalition has also published details of a £400m Get Britain Building scheme, which will aim to help projects put on hold due to a lack of funding.

The Government claims the money will "unlock" the construction of up to 16,000 new homes, supporting 32,000 jobs in the process.

It is estimated that around 3,200 of the properties will be affordable homes.

In the foreword to the Laying The Foundations report, the Prime Minister and Deputy Prime Minister explain: "The housing market is one of the biggest victims of the credit crunch: lenders won't lend, so builders can't build and buyers can't buy."

"That lack of confidence is visible in derelict building sites and endless For Sale signs," David Cameron and Nick Clegg write.

"It is doing huge damage to our economy and our society, so it is right for Government to step in and take bold action to unblock the market."

However, the opposition say the new money is an inadequate replacement for funding for similar projects cut by the coalition.

Shadow housing minister Jack Dromey said: "George Osborne is giving back only 10% of last year's £4bn cut to housing investment to build just 3,200 affordable homes.

"With millions in need of a decent home at a price they can afford, the country is gripped by a growing housing crisis.

"Despite 127 government announcements, more than one a week since the coalition took power, their own figures show a 6% fall in new homes and a 10% increase in homelessness.

"Their housing policies are failing and George Osborne's mismanagement of the economy is making things worse, holding back housebuilding."

:: It comes as the Rightmove House Price Index suggests there has been a 13% fall in the number of new sellers coming to the market, compared with the previous month.

It blames the uncertainty over the future of the eurozone.

Asking prices have also fallen by more than 3% (3.1% ) in a month.

good or bad ?

0

Share this post


Link to post
Share on other sites

sounds gd, will probs have disastrous effects

0

Share this post


Link to post
Share on other sites

can people give there reasons as to why it's not good?..or are you just saying it for the sake of it

0

Share this post


Link to post
Share on other sites

Everyone wants to be on the property ladder asap.

I think lowering deposit amounts will lead people to jump the gun and then struggle to make the (what will be) higher mortgage payments.

Not to mention young buyers will settle for some 1-2 bedroom for like 150+ bags and want out in a few years when they want to settle etc.

1

Share this post


Link to post
Share on other sites

Why are people so desperate to get on the property ladder?

1

Share this post


Link to post
Share on other sites

Why are people so desperate to get on the property ladder?

Because paying someone else's mortgage is a mugs game

3

Share this post


Link to post
Share on other sites

Bun all the haters.

I'm gonna jump on this ting.

5% on a 39 year mortgage for the first 4 years = me

I will now be buying a yard in 2013 or late 2012.

0

Share this post


Link to post
Share on other sites

Why are people so desperate to get on the property ladder?

Because paying someone else's mortgage is a mugs game

So it's an ego thing?

0

Share this post


Link to post
Share on other sites

If the interest rate is right I will cop as soon as it drops

0

Share this post


Link to post
Share on other sites

But has there ever been a worse climate to increase the burden on the taxpayer?

0

Share this post


Link to post
Share on other sites

The Government claims the money will "unlock" the construction of up to 16,000 new homes, supporting 32,000 jobs in the process.

It is estimated that around 3,200 of the properties will be affordable homes.

8-)

0

Share this post


Link to post
Share on other sites

Why are people so desperate to get on the property ladder?

Because paying someone else's mortgage is a mugs game

So it's an ego thing?

Surely it's more of not throwing your money into a black hole thing.

But yeah I don't trust it by the way

0

Share this post


Link to post
Share on other sites

Why are people so desperate to get on the property ladder?

Because paying someone else's mortgage is a mugs game

So it's an ego thing?

Surely it's more of not throwing your money into a black hole thing.

But yeah I don't trust it by the way

To simplify...

You rent for 15 years, at the end of your tenancy, you have your belongings.

If you pay your mortgage for 15 years, at which point if you want to cut; you sell your house, give the bank what you owe. Your left with all the money you ever paid in.

0

Share this post


Link to post
Share on other sites

ive always seen renting as paying someone to borrow thier house

after uni i decided i aint moving out until im ready to get the mortgage ting paid 420 per month for 12 months - what for?

as naive as i was i thght that if you had the depo money then a mortgage is yours

i was wrong

when i finish uni im getting a mortgage in my sis name still

0

Share this post


Link to post
Share on other sites

Why are people so desperate to get on the property ladder?

Because paying someone else's mortgage is a mugs game

So it's an ego thing?

Surely it's more of not throwing your money into a black hole thing.

But yeah I don't trust it by the way

To simplify...

You rent for 15 years, at the end of your tenancy, you have your belongings.

If you pay your mortgage for 15 years, at which point if you want to cut; you sell your house, give the bank what you owe. Your left with all the money you ever paid in.

No the premise is simple enough, what is hard to understand is what people go through to put themselves in this position and then end up losing the home and money after 15 years anyway.

There are a million things than can and do go wrong, loss of jobs, arrears, partners split etc...

0

Share this post


Link to post
Share on other sites

ive always seen renting as paying someone to borrow thier house

after uni i decided i aint moving out until im ready to get the mortgage ting paid 420 per month for 12 months - what for?

as naive as i was i thght that if you had the depo money then a mortgage is yours

i was wrong

when i finish uni im getting a mortgage in my sis name still

when u cant pay her every month for the next 25-35 years...

0

Share this post


Link to post
Share on other sites

If you need the deposit to go down to 5% the chances are you aint in the best position to be taking out a mortgage.

There will be some who do well out of this deal but there will be a lot of losers.

But I guess that's what the Govt and banks are counting on...

0

Share this post


Link to post
Share on other sites

Everyone wants to be on the property ladder asap.

I think lowering deposit amounts will lead people to jump the gun and then struggle to make the (what will be) higher mortgage payments.

Not to mention young buyers will settle for some 1-2 bedroom for like 150+ bags and want out in a few years when they want to settle etc.

nail meet head.

Nationwide have an account, i think its some kind of hybrid current/savings account ( i wasnt paying much attention I just read it somewhere)

anyways you open the account, every month you put a little sutin in it then after 2 years you use that as a deposit for a mortgage

one sec Ill find the article because my explanation is shit, memory is quickly dying

0

Share this post


Link to post
Share on other sites

oh yeah its for first time buyers

brb

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0