To think "the government giving £3'000 to peoples first home" isn't s good use of public money

[DyslexicScientist]

With so many essential services cut, doesn't seem right to me to give people money to buy a first house.

Apart from anything the average house price in england has just hit 300k and this is about 12 times the average wage, so prices are in a bubble and unsustainable. This just seems to be adding fuel onto the fire, help to buy as seemed to have the affect of also stoking house prices, making people worse off as they have a loan to repay in 5 years.

£3000 is a drop in the ocean. All it will do is mean those few who can afford to buy will get a boost and the majority who cannot afford to buy get the Royal "fuck you".

I don't know how much this will cost taxpayers per year but I do know it would be better spent elsewhere than propping up an overinflated property market.

Elsewhere meaning things like SEN education support which is a disgrace unless you have the confidence and words to take on the local authority. Meanwhile cuts to budgets abound. That's just ONE cut in a public service while they ponce about giving cash to those who could save it anyway as they earn enough to do so.

Not a fan of this policy and not a fan of this Govt.

My DSS and fiancee, who earn modest wages, bought with help to buy last year. They could afford a house because they bought in an area that is being regenerated. In five years they will pay the money back in full or start paying interest. When they realised they qualified for the scheme it really focussed them on getting the 5% deposit together. My other children ,who have been renting for years, will apply for the scheme too.

It will disproportionately help people in areas where housing is cheaper and wages are low though. The type of people who without this potentially would be supported by hb later in life. In the south yes, it is a drop in the ocean but for a 50% deposit on a 60k property it is half.

I disagree - no new houses, this policy will not increase the number of householders it's smoke and mirrors, the houses would be bought up regardless of the £3k.

Yes I agree that new houses are needed also.

It ducks me off to be honest. I live in a flat that is worth about 90s. I would love to move but we can't get a mortgage atm as dh is self employed. When we can well be competing with ftb who have had this extra help when we got nothing 9 years ago and have ridden out negative equity etc. We will have 2 dc when we move so I'd argue our need is greater than ftb without kids.
Obviously I am glad we have a roof over our heads and appreciate there are many stuck renting and lacking security but the answer to that is to build social housing.

Yes I agree that new houses are needed also.

it's not an afterthought. that's the major problem.

What are we talking about here? I haven't seen any schemes whereby FTB just get given £3k?

Are you talking about the FTB ISA which could potentially be topped up by £3k but only if you put in the full amount yourselves (which I think is £12k although I'm not certain).

I work in mortgages and specifically in pushing through operational change so have close contacts with those that deal with products and the like.

BTW not necessarily saying this is good, just I'm not sure that I know what everyone is talking about.

I've just opened that HTB ISA, so I can't really comment. DP and I will need all the help we can get to buy our first flat and our parents aren't in a position to help us so I'll take what I can.

My friend has just started one of these. It may not help people in the South East and London, but there are plenty of places around the rest of the country where first time buyers will benefit from this.

I live in a naice town in the West Midlands. We bought our first house in February this year using Help To Buy. We don't have a loan to pay back in 5 years, we have a normal mortgage.

I am definitely not a Tory voter, but I do think this government are trying to help my generation (I am 30) to get on the property ladder, which previous governments have not. We also saved about £1000 in stamp duty due to the changes they made.

There is a huge amount of house building going on in our town too. 1600 homes are currently being built with even more planned.

*Yes I agree that new houses are needed also.

it's not an afterthought. that's the major problem*

The thread is specifically about whether it is a waste of the 'public purse' to help people access decent housing. Housing and the issues behind it are extremely complex. Perhaps another option as well as more building is to try and curb the rise in population which is also a very key factor?

Perhaps another key as well as building more houses is to stop rich people buying more than one. This is a small island with finite resources and a large population, the greed of a few is at other people's direct expense. Simply building more houses won't stop that problem.

I agree with op, if they suddenly have so much money to throw into private hands why have they so little to invest in communal services which support all of us. The recent announcement of so-much-off for under 40s is rather annoying to those of us just over 40 who have never been able to get on the ladder either and will now see the prices rise by that amount as well. Nobody ever did anything to help us over the last ten -twenty years of skyrocketing prices, it's just that the vocal middle classes are now affected too. And still the only solution they have is to throw more public money into private hands. Pathetic bunch.

I also think we should do an audit of empty properties, buy to leave is a real problem in the capital.

Perhaps another key as well as building more houses is to stop rich people buying more than one. This is a small island with finite resources and a large population, the greed of a few is at other people's direct expense.

it's not a small island. Space isn't stopping us. It's planning permission. Old derelict buildings in central london on prime land aren't being used, as one example.

My DS is final year uni and just opened one of these ISA's- it pays 4% interest which is brilliant anyway and as he will be working in London then any bit helps. He has until 2030 to use it as a FTB and reckons he will be renting for 6 years before can get enough of a deposit together as rent so high in the City. (He is using money he earned from working last summer to fund the ISA). We can't give him help with a deposit. If he never buys a house he just gets 4% on what he has saved so worth opening just for that.
So whereas I agree that benefit cutting is awful, I can't complain about these when my DS is hoping to benefit from one.

i disagree OP, the younger segment of the population who will make up most of FTBs are hardest hit by credit cuts/house prices/wage freezes while pensioners have been excluded from any cuts. while my tax pays universal winter fuel allowance/free bus passes for them, regardless of need, I am VERY happy to be helping out those starting off for a change. We have a v skewed system of support and this goes a v small way to righting that.

I can't complain about these when my DS is hoping to benefit from one.

You totally can. As they will probably end up just inflating the cost of housing. Its kind of a necessary evil. Although my tiny house has gone up over 10k a year in the last few years. Bonkers.

Yes to PP who wrote about Australian scheme (scrapped now funnily enough). It absolutely just inflated first time buyer houses in desirable areas by the 'free money' amount.

Felicia's point is a good one - this is a discussion of the ISA scheme, right? The First Home Owner's scheme in Australia was, as far as I can tell, a grant that required a fairly simple application process to get - the ISA scheme here requires a) quite a bit more forward planning and b) a fairly modest rate of savings over a lengthy period of time.

If I understand the system correctly (please correct me if I'm wrong, Felicia, as I'm hoping to apply for one!) the ISA has to be started within a tax year in which you haven't paid into any other ISA, so if you already have savings in another ISA you have to time the switch carefully. Moreover, you can only put in up to a maximum of £200 per month. The government also contributes a percentage up to a maximum of £3000, but if you take the money out before you've "filled" the ISA then obviously you receive less.

This seems quite different from the Australian scheme in a number of ways. I think the complexity of setting it up means less people will apply, which on the one hand is exclusionary. On the other hand, the fact that it isn't a grant and is instead a reward for fairly low-level but consistent savings means that it is to some extent designed for people who are slowly trying to build up their deposit. It also incentivises saving consistently, as it commits you to that £200 a month to get the reward.

I don't think the uptake will be wide enough for it to have an impact on house prices (as it won't be taken up across the board as the Australian scheme presumably was). I think it will make a huge difference for individual young people looking to buy a first home in the £100,000-£150,000 range and may mean individuals or couples who take it up end up out of renting and on the property market a year or so earlier than they might have otherwise.

All that said, it obviously is a "sweetener" policy, but I don't think it will have quite the catastrophic effects people are predicting here...

Thankyou, moving

That sounds about right Provisionally, but I'm yet to complete the internal training about it!

I admit I don't know enough about it, but it seems to me like an ISA with certain restrictions and certain bonuses. Much like a lot of savings products these days. I'm not sure the bonus coming from the govt is the right thing.

Provisionally I believe you can transfer other ISAs in, so if you have an ISA from 2014-2015 and open this ISA in 2015-2016, you can transfer the balance in. This is true of most ISAs. This would boost the balance but the bonus remains the same, and I think the £3k is only payable on the monies paid in this year, not for previous years.

I will do the training tomorrow and update!

All that said, it obviously is a "sweetener" policy, but I don't think it will have quite the catastrophic effects people are predicting here... still fairly pointless as it does not create more houses!
Agree that there are other ways to increase housing stock than just building more that would help to reduce the upward pressure on house prices but this policy is not designed to do this it is just feeding the monster!
This policy had a faint odour of - school places - where the sharp elbowed middle classes work their way into over subscribed faith schools and grammar schools by being more clued up and more organised. The fact that this system is slightly complicated and vaguely intimidating is not a good thing - it favours the more educated and we already know they are more advantaged. At least the Australian system was fair - mad as it was!

TamponLady how has buying your council house freed up a council house for others? I am really confused.

The main reason why house prices have increased with recent measures implemented here and Australia etc is because it's a basic 'fuck you I got mine' mentality of the current home owner population.

The biggest drag on any government tackling this head on is the voting demographic who are home owners, everyone wants to buy a bargain and sell at a profit, the argument of build more houses as a solution is far to simplistic as there are many fundamentals in play and over a decades worth of 'house prices always rise' mind set that needs to be shifted.

The FTB ISA along with right to buy is nothing more than a can kicking excersise because no body (primarily those that already own a house) wants to see a rebalancing situation and any government that is in charge during this rebalance will be committing political suicide for a generation

the current government are starting to focus attention onto professional/accidental landlords as a potential cash cow with tax take (no matter how much you call them evil, they are addressing the problem), 'the rich' buying houses is a globalisation issue and far more complex than just 'prevent them buying' and one of the reasons why we are not meeting demand and only building ~200,000 houses a year is because of the electorate that will not welcome more as it affects their personal wealth, and that is disregarding our banking system giving credit away like free chocolate during Browns boom years and the implications of said correction.