Budget 2021: Mortgage guarantee to help buyers with 5% deposit

[FoxEye]

Resting on your laurels in a cushy public sector (council no less) role whilst being mad at the world is very unbecoming.

/yawn. You really do have a low opinion of public sector workers don't you.

Also I have never been to India or Bangladesh, and have not seen the slums there. Are they the places we should be comparing ourselves to? Maybe in this new post-Brexit world free of the EU's socialist meddling, we can roll back the clock to the good old days of Empire, workhouses, slums and all.

 

[dlockers]

/yawn. You really do have a low opinion of public sector workers don't you.

Also I have never been to India or Bangladesh, and have not seen the slums there. Are they the places we should be comparing ourselves to? Maybe in this new post-Brexit world free of the EU's socialist meddling, we can roll back the clock to the good old days of Empire, workhouses, slums and all.

Actually not at all. I'm normally jumping to the defense of council workers as it's the popular thing to take the p*ss and use words like 'clowncil'

The only reason I mentioned council is because you can directly point to the people you want to pay more to fund your house selection extravaganza.

Thanks for participating in this chat though. No further insight or understanding as to why you are so disgruntled with the world other than your own doings.

 

[cu3ed]

Theirs badly any houses available. First time buyers and house prices are well out of reach. Reaks of housing crash 2.0 in the making and we already know the banks are back to repacking bad credit portfolios and marking them up.

 

[Scam]

I'll respond to the personal insults tomorrow but hey look everyone! Another housing thread has degenerated into a bunch of entitled boomers and landlords telling us young'uns what we're doing wrong in life. (Sidenote, I'm not young)

Fact remains the average FTB age is over 37 years old compared to mid-twenties or whatever it was back in the day and average house price to average wage ratio is now 8+ across the whole of the UK. If that doesn't tell you something is wrong then you're just plain ignorant. End of story. And if you can't see that successive governments are doing everything they can to prop up the bubble to serve their own pockets then you're just as ignorant. Big yawn from me, generally...

Edit: And if you still can't see there's something wrong then why don't you step back and wonder why on earth in a civilised first-world society the government needs to waste everyone's taxes to guarantee someone's mortgage then seriously... Surely the definition of 'unaffordable' is having to take money from the government to pay your own loan? No?

 

[413x]

Tying up would a better phrase, I take your point.

Downsizing is good in theory but many struggle to give up the extra space as you still want family to visit / gran kids etc. Plus the majority don't end up buying some big "forever" home, they stay in a modest sized house which doesn't really allow downsizing. Moving somewhere cheaper maybe but at that age you'll likely want to be near people you know.

The reality for most people is that you either end up in a care home and the house is sold to pay for it or you die and your kids inherit whatever is left after tax. So given the choice between having that at the end of your life or more disposable income during your better years, I think I can guess what most people would choose.

This.

How much better would life be if houses were 50 percent cheaper.

I could have a 400 ppm gain or pay of the mortgage and actually have a retirement.

Really, the cost of housing is denying people a retirement. Because mortgages are so long and so burdening

It really won't be long before we are at multi generation mortgages. With 30+ year mortgages we are getting close

I earn above average. Not higher tax yet. But even in this wage I won't pay down the mortgage until 20 to 25 years. To even get the bank to lend I had to go for 30


Everyone also seems to think it's great to have no money when you're young and have a big locked away asset when you're old. But health goes. You might end up being a care or cared for. And never be able to use that. If this was paying off a mortgage at 40 vs 70 that's different. But this is 70 vs 60. I'd much rather have some freedom now.

So you get old, have this great asset but you can't use it because you're basically spent

 

[HangTime]

And yes, high earners will find it harder to find another high earning job and likely have much bigger outgoings. Someone sacked from Starbucks can cross the road and join Costa.

You seem to be ignoring his point that high earners are more likely to have savings (or other assets) built up to fall back on. For some high earners, being unemployed for a couple of years is no problem, whereas for many low earners, even a few months out of work can be a big problem.

 

[dlockers]

You seem to be ignoring his point that high earners are more likely to have savings (or other assets) built up to fall back on. For some high earners, being unemployed for a couple of years is no problem, whereas for many low earners, even a few months out of work can be a big problem.

You guys are so disenfranchised if you seriously think a high earner is sitting on a nest egg that could buy them a couple years unemployed, lol.

This is why average salary and average house price and average saving is such a poor data point. Median is much more useful and illuminating.

 

[HangTime]

I'm speaking from experience as someone who is unemployed but used to be a [moderately] high earner.

 

[Rexton]

Bought my first home in October and the timing felt very lucky. Decent size property with little work needing for £130k, £28k deposit.

I imagine with covid and now this new scheme housing will be even more difficult to afford in the near future.

While the intentions sound good it's likely to cause housing prices to climb, and with 95% LTV interest will be very high.

I struggled enough with saving for a deposit over 8 years in an already difficult market. I'm 28, grew up very poor. No external help, up until the last few years I was working minimum wage with no prospects.

From experience it's incredibly difficult for first time buyers already, and it's no doubt going to get worse.

 

[413x]

Bought my first home in October and the timing felt very lucky. Decent size property with little work needing for £130k, £28k deposit.

I imagine with covid and now this new scheme housing will be even more difficult to afford in the near future.

While the intentions sound good it's likely to cause housing prices to climb, and with 95% LTV interest will be very high.

I struggled enough with saving for a deposit over 8 years in an already difficult market. I'm 28, grew up very poor. No external help, up until the last few years I was working minimum wage with no prospects.

From experience it's incredibly difficult for first time buyers already, and it's no doubt going to get worse.

It will.

The natural course without the meddling the government would have been likely a small fall or stagnation (guess)

 

[HACO]

It really won't be long before we are at multi generation mortgages. With 30+ year mortgages we are getting close

100-year mortgages were introduced in the 1990s in Japan in the aftermath of their property bubble bursting (reminder: we are mirroring Japan's 1980s fiscal and monetary policies, and this government mortgage guarantee is also exactly what Japan did to continue inflating their property market during the 1980s). We all saw how it ended for Japan.

You can't meaningfully reduce interest rates anymore, wages are not and will not be growing, the only way the property market can continue to raise prices (UK's religion) is to increase the terms of the mortgage which is what we're going to do as well. Prepare for 50, 75 and 100-year mortgages.

 

[NotAGolf]

100-year mortgages were introduced in the 1990s in Japan...

What happens in this scenario when you die before paying off your mortgage? Does the bank just get the house outright? What if you have living family?

 

[HACO]

What happens in this scenario when you die before paying off your mortgage? Does the bank just get the house outright? What if you have living family?

Probably the same thing that happens if you die before paying off any other mortgage, I'm guessing the estate will have to carry that debt, so the inheritors will either accept the sale of the property or agree a new financing agreement with the ban.

 

[Pigeon_Killer]

Is the budget shared before it's made public? Starmer seems to be reading a prepared speech and a lot of what he's saying doesn't have anything to do with the budget, it's almost as if he doesn't realise we're in the middle of a pandemic.

 

[Fubsy]

It's just an extension of the blame game for post 2008 financial crisis and the opposing views on how to recover from that based on political flavour. Starmer is right in general/normal times, but now isn't the time to be raising public spending further - the pandemic has killed any realistic chance (if there was anyway) for public sector pay bumps. They'll be lucky to get anything to keep in line with inflation. Labour to promise anything else is disingenuous.

I listened, it all sounds a lot tamer than usual.

 

[Pigeon_Killer]

It's just an extension of the blame game for post 2008 financial crisis and the opposing views on how to recover from that based on political flavour. Starmer is right in general/normal times, but now isn't the time to be raising public spending further - the pandemic has killed any realistic chance (if there was anyway) for public sector pay bumps. They'll be lucky to get anything to keep in line with inflation. Labour to promise anything else is disingenuous.

I listened, it all sounds a lot tamer than usual.

Thanks. Generally don't pay any attention to politics, other than election nights, but was worried the CGT uplift may have been removed which would've left my brother and I with a massive tax bill. Happy it wasn't but I was interested to see what, if anything, Starmer agreed with. Just seemed like a personal attack on Sunak more than anything.

 

[booyaka]

Offtt - Corporation tax will increase to 25% from 2023 but income tax thresholds will freeze, in the Chancellor's plans to boost the economy after Covid.

That's a bit of a sore one....Doesn't make the UK a particularly good looking place to start a business suddenly!

Taxation

• No changes to rates of income tax, national insurance or VAT
• Personal income tax allowance to be frozen at £12,570 from 2022 to 2026
• Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
• Corporation tax on company profits to rise from 19% to 25% in April 2023
• Rate to be kept at 19% for about 1.5 million smaller companies

 

[HACO]

That's a bit of a sore one....Doesn't make the UK a particularly good looking place to start a business suddenly!

It will still be very low compared to our international peers.

 

[stuman]

Offtt - Corporation tax will increase to 25% from 2023 but income tax thresholds will freeze, in the Chancellor's plans to boost the economy after Covid.

That's a bit of a sore one....Doesn't make the UK a particularly good looking place to start a business suddenly!

Taxation

• No changes to rates of income tax, national insurance or VAT
• Personal income tax allowance to be frozen at £12,570 from 2022 to 2026
• Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
• Corporation tax on company profits to rise from 19% to 25% in April 2023
• Rate to be kept at 19% for about 1.5 million smaller companies

There were also MANY other grants and tax breaks available for startups in the right sectors. So looks actually pretty good.

 

[CaptainRAVE]

Splashing the cash around.