Summer Budget 2015 – Landlords Reactions

Help to buy has pushed house prices...have look (not buy to let)

http://www.ft.com/cms/s/0/fdbb8a00-5dfe-11e5-9846-de406ccb37f2.html#axzz3mIPUHNbB

Reply to the comment left by "KATHY MILLER" at "20/09/2015 - 16:17":

Absolutely! research has shown that, lenders never lose out on buy to let lending. This is most lucrative way for them to generate revenue for banks which consequently keeps them afloat.

Reply to the comment left by "KATHY MILLER" at "20/09/2015 - 16:55":

Kathy, I retract my earlier post. Yes these accountants are right it is being debated in Public Committee as such this would not be debated by Petition Committee therefore it is fruitless to have anymore signatures.

Reply to the comment left by "Saeef Khan" at "20/09/2015 - 17:13":

Hi Saeef

Cant read it , it wants me to sign up, can you cut and paste please

Reply to the comment left by "KATHY MILLER" at "20/09/2015 - 18:29":

Hi Kathy, I attempted again to read however, it also asks me to sign up. Surprsingly, I was able to read first time without sign up.

Reply to the comment left by "Saeef Khan" at "20/09/2015 - 17:41":

Saeef I disagree with your comments about the petition. Having more signatures shows the strength of concern about the tax proposal. I am still encouraging people to sign.

Help to Buy has pushed up house prices, says study
Kate Allen and Jim Pickard

In his autumn statement, Chancellor of the Exchequer, George Osborne, cut the rate of stamp duty for lower-value house sales and raised it on those worth more than £1.5m in a move that would cut the rate of tax for 98% of house purchases. (Photo by Carl Court/Getty Images)©Getty
The government’s flagship home ownership scheme Help to Buy has pushed up the price of an average house by £8,250, according to research.
Help to Buy assists people who would not normally be able to afford to buy homes with government loans and guarantees, enabling them to purchase a property with a deposit as low as 5 per cent.

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Nearly 120,000 households have used the £26bn scheme in the two and a half years since it was launched by chancellor George Osborne in 2013. Its popularity is growing: a record 4,745 people bought using Help to Buy equity loans in June, recent figures showed.
On its launch, Mr Osborne said Help to Buy was “a dramatic intervention to get our housing market moving”. But critics of the scheme predicted at the time that without a substantial increase in housebuilding volumes it would cause house prices to rise.
Research by the housing charity Shelter has found that by increasing the number of people who can afford to purchase a property, the scheme has begun to boost mortgage lending volumes and push up house prices.
Total mortgage lending is 8.4 per cent higher than it would have been without the scheme, Shelter found, and Help to Buy has added £8,250 to the average house price — an increase of 3 per cent on the average cost of a UK home.
Help to Buy’s impact has varied greatly by area, with the biggest effect in regions with lower-priced housing. The north-east has the highest proportion of Help to Buy sales; 6.7 per cent of all transactions since the scheme launched have been government-backed.
Scheme has little impact in London
Help to Buy has had only a small impact on house prices in London, as it has been little used there despite the capital's residents experiencing the country’s most pressing affordability crunch.
The scheme has backed just 1.8 per cent of sales in Greater London since it was launched in 2013, according to research by Shelter. Of the 112,803 buyers supported through the scheme, just 6,005 were in London.
At £525,000, average London house prices are more than 10 times average incomes. So first-time buyers purchasing an average home in the capital would need a £26,250 deposit to access the support of Help to Buy — more than three-quarters of median average wages.
At a local level, north-west Leicestershire is the area where prices have been boosted the most by Help to Buy. Average house prices there have been pushed up by over £19,000, according to Shelter’s estimates. The price of properties in South Tyneside has been driven up by more than £13,000.
Campbell Robb, Shelter’s chief executive, said the figures were “proof that Help to Buy hasn’t helped many people at all, instead it’s pushed a home of their own even further out of reach”.
“Investing in building genuinely affordable homes, not more piecemeal schemes, is the only way to give back hope to all those bearing the brunt of our housing shortage,” Mr Robb said.
The Shelter research is based on earlier work by the National Housing and Planning Advice Unit, which found that every 1 per cent increase in the volume of mortgage lending increases house prices by 0.36 per cent.
Jan Crosby, head of housing at KPMG UK, said it was "not surprising" that Help to Buy had boosted house prices. “We seem to be a nation addicted to house price inflation,” he said.
A DCLG spokesman said the department had “no evidence” that Help to Buy was pushing up house prices. The scheme is putting more households on to the housing ladder and increasing housebuilding, he said; with private housebuilding starts increasing by a third since its launch.

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "20/09/2015 - 19:27":

BTL, I suppose you have made a very good point.

Reply to the comment left by "Ahmad Jibril" at "20/09/2015 - 19:48":

Thanks Ahmad. I take it, you have membership with Financial Times?

Reply to the comment left by "Ahmad Jibril" at "20/09/2015 - 19:48":

People on this scheme will more than likely be the first ones into neg equity if prices drop.

Thanks for cut and paste