AIBU to think a 2.5% deposit scheme will not help?

[Lugol]

DS told me yesterday about some mortgage scheme the Government have come up with where the deposit is 2.5%.

I'm just wondering how any young people are going to be able to take advantage when the Government have made them virtually unemployable and there are no jobs.

Surely if they want young people buying houses, or anyone buying houses for that matter, then the Government need to create an environment where people can afford to.
The CoL is off the charts and only getting worse if this 25% increase in energy costs is going ahead in January. Fuel at the highest it's been.
The housing market is totally stagnant.

They keep building whole estates of houses (not even starter houses either) and I keep wondering who the fuck is going to buy them.

Because it's not young people.

YABU - Don't be daft Lugol, All of the young people will magically find jobs and buy houses
YANBU - the country is fucked

I agree that a 2.5% deposit scheme won’t solve the wider affordability problem, especially if interest rates rise and as you say energy prices!. But saving for a deposit is a major barrier in its own right. Around me, rent is often higher than the monthly mortgage payment would be, so people may be able to afford the repayments but struggle to save a deposit while paying rent. I think the scheme could help some people, even if it’s far from a complete answer.

Australia tried this exact policy, although it requires a 5% deposit, and it only inflated house prices more.

It’s a bandaid solution instead of actually fixing the causes of insane house prices: Lack of supply, too much demand i.e. immigration levels not keeping up with house building and house building being far too expensive, while also incentivising owning multiple investment properties with generous tax breaks. But changing those things is deeply unpopular so no government wants to do it.

I don't think anyone thinks any policy will solve any issue 'magically'.

Wont help at all. The house prices and interest rates are what’s stopping people, not having to have 10% deposit.

Smoke and mirrors.

I can't help but feel the Government deliberately pushed the house prices higher when they did the Stamp Duty holiday.

We were looking to buy a house at the time and suddenly every house that was £300k was £500k plus.
And they've stayed high since.

And the mortgage rates were low at the time so now everyone who was on a 5 year deal is having a nightmare because the interest rates are sky high.

I'm afraid to say that the 2.5% scheme also won't cure cancer, eliminate bad fashion sense, bring about world peace, stop the effing boats, or find Madeline McCann.

You're completely right about the jobs market crisis, and the CoL. But in fairness to the government, there is no silver bullet. We need a suite of solutions, and I think on the surface getting young people in their own home on 2.5% rather than 10% brings it in closer reach of more than could hope to get there today. As ever, the devil is in the detail.

If we knock any initiative that doesn't fix everything, we won't do anything. Yes to the 2.5%, and now more on youth employability please.

I mean if they wanted the UK to be somewhat tolerable for it's citizens they could stop big businesses like the energy companies from absolutely rinsing everyone with endlessly hiking energy bills.

They post ridiculous profits every year while people freeze to death.

But they won't do anything about that.

And people are so focussed on Gaza/Israel that they won't collectively take to the streets and lobby the Government to do something about it.

It won’t solve everything but it will help the housing and construction industry which prop up a large proportion of the economy and employs thousands of people.

Also, new houses are more efficient so the energy bills thing hits differently than if you’ve bought yourself a leaky Victorian cottage so it’s win/win on the front

(Nothing wrong with a leaky Victorian cottage btw, just showing that the energy thing can be a red herring)

A 2.5% deposit scheme looks good on paper but it means that you're likely going to end up with 65year olds with mortgage payments. I live on a newish build (still building but we are 2nd owners of a 6year old house) and the amount of people I've spoken to who did the 5% mortgage is astonishing. They go for a long mortgage as they can't afford a higher mortgage payment but they also then have their cars (usually audis etc) on finance 'because they wanted (not needed) a new one and couldn't afford it' add to that paying for multiple streaming services, unnecessarily expensive phones/phone contracts and it explains why a 2.5% deposit scheme is needed . People's priorities have changed and it seems its all about looks. We're not rich by any means (joint income of less than 70k) but we worked hard to save for a decent deposit of over 40% and have a lower mortgage repayment because of it

It will benefit some people but you have to be earning a decent wage for the bank to lend to you.
I have rented all my life and as a single person my wage would not get me a mortgage despite paying my rent each month which is a similar amount to what a mortgage would be!!!

Your comment is just so over dramatic. Sick of threads like this that just want to say the country is fucked. It’s OUR country, we need to sort it out ourselves. All young people are not unemployable.

It's important to remember that was a different government.
You can't blame Burnham for Sunak's choices.

People say the parties are all the same, but they're not. They prioritise different households, focus on different problems.
The stamp duty holiday worked the way Sunak intended.

No house price rose by 66% in a few months at any point in my lifetime. Gross exaggeration doesn’t help your case. Saving a deposit while paying rent that’s higher than the equivalent mortgage is the greatest barrier for first time buyers. Stimulating the housing market will help create jobs and get the economy moving.

And don’t try to tell me mortgage rates are sky high, they were 15% when I bought my first house.

They need to sort the student loan first

Is this the scheme that’s only applicable for new builds? I’m 28 tomorrow, still renting with the hopes of buying in the next few years and I would absolutely hate to go into a new build! They’re the most charmless, sterile looking things and I’ve heard lots of stories about issues with the property or land that’s hard to fix.

Incremental change is the only way to tackle all these issues.
Firstly immigration isn’t the main problem about housing.
check the ONS data as our net migration continues to fall as does the number of non-EU citizens entering.
Secondly - the Conservatives kindly privatised all the energy companies so they have little control over them, unless they nationalise them again.
The water companies are the bigger issue at the moment so they need bringing in first. To be fair about energy prices - thank your man Donald for that one.

There is still a lot of help for first time buyers with savings schemes and the 2.5% deposit can only help. Along with the building initiatives which continue to provide employment.

The last help to buy helped middle income people size up, while this might at least only be first time buyers it’s going to do the same thing of pushing up prices. It’ll help some people, but it’s not tackling the wider problem.

He’s proving himself to be very limited in thought and innovation. Big builders are quids in again.

I didn't blame this Government for all of the state of the UK.

The last Government were shit and made awful decisions. I suppose at the least they supported small business which Labour are trying to actively eradicate and tax to death.
So then there will be even less jobs.

Sunak has pushed the house prices out of reach for most people.

I’d like to know who will be eligible for this. They’re said it’s for those without the bank of mum and dad. How will they work that out?Strongly suspecting it will be just for those who have UC topping up parental income and the very squeezed middle just over the threshold will be yet again be funding it through taxes but penalised and forced to find money they don’t have.

We watched it literally happen with a house that we had been semi interested in.

We were in rented while we looked and it wasn't until health issues from the damp in the house we rented forced us to start actively looking.

The house we had been looking at changed prices from £350k to offers over £500k.
I looked it up after it sold and it sold for £520k. I feel for the people who got whipped up into a frenzy because they will never sell it for that price.

Don't read it then. The title wasn't ambiguous.

But do tell everyone how WE are going to sort this country out, we are all ears.

There are lots of comments all over Chat about how posters DC can't get a job and keep applying but any hint of criticism over Labour and posters on this site lose their minds.

Nobody said this was all Labours fault and that it's nothing to do with the Tories.

It's both parties fault.

it helps.. a tiny bit. but it won't make a dent.

The housing crisis is an "easy" difficult problem.

in that it is actually really easy to solve, but doing so requires people to accept a difficult reality.

All you need to do is force the building of more houses than the population is increasing by, and prices will fall on average. To do that you have two levers you can pull:

1 - how many houses you mandate to be built each year
2 - how many people you let come to the UK (as that is our main source of population rise, not births).

Raise 1, or lower 2.
or both.
Done.

So why is it difficult? Because in doing so you have to accept:

1 - property prices for all will fall. (what powerful minister or home-owning voter wants this?)
2 - Property will be built on "beautiful" spaces that could be in your lovely town
3 - The economy will take a hit, as migration/population growth drives overall economic growth.

No one with any influence wants to accept those 3 things, in return for helping young people afford housing. So for now, as with the last couple of decades, young people will get put to the side.

So Nige is going to come along and make it all better? The grifting cunt that he is