Jeremy Hunt considers support package to help FTBs

[Twiglets1]

Jeremy Hunt is considering a support package to help first-time buyers onto the property ladder ahead of next month’s budget. The chancellor and Treasury officials are said to be discussing measures including extending the government’s mortgage guarantee scheme and creating a new type of individual savings account (Isa) targeted at people looking to build up a deposit to buy their first home.

Sources told the newspaper that Mr Hunt has ruled out a revival of the Help to Buy scheme, which gave buyers a loan of up to a fifth of the value of a house, on the grounds it could fuel inflation.

The plans come as the Conservatives and Labour increasingly battle over the housing crisis facing Britain, with Sir Keir Starmer promising to build 300,000 homes a year if he becomes prime minister.

https://www.independent.co.uk/news/uk/politics/jeremy-hunt-housing-mortgage-budget-b2433941.html

I would really rather they just called a general election.

Lol - I think we all would!

It's hilarious, these parties saying 'we should build 450k new homes a year!', 'we will bulldoze planning restrictions so houses can be more easily built!'

Yeah, planning is a consideration, but no developers are gonna be increasing their quota in a downturn. They don't work on year to year profits, they have twenty year strategies. When house prices are plummeting they simply stop building and wait until they can make large profits again. That's why shareholder dividends have absolutely gone through the roof in the last five years.

Because I read a lot of housing stuff on here, whenever I open a new tab in Chrome, I get an absolute ton of house related articles my phone thinks I should read. In the last week, two building firms, the names of which I forget but they are common garden ones that everyone has heard of have said their planned output for 2024 is now to build a third less houses than 2023.

So they can all chuff right off with their 'we will build ALL THE THINGS ' manifestos, nobody is going to build those houses for you. They will only build houses when they think the profit margin is acceptable, even if that means waiting and waiting.

Thankfully no more Help to Buy. I have read some awful stories about people getting trapped by that scheme.

Agree about the Help to Buy scheme.

Plus I’m a bit confused by mention of a new type of ISA designed to help FTBs build up a deposit because we already have that in the form of LISAs. Maybe they will repackage them and increase the limit which has been stuck at 450k for quite a few years now. Hardly “new” though.

None of these packages are to support FTB.

They are to support the housing market in general. I.e property VIs.

FTB are best supported by letting the market find it's correct level without intervention - ie house prices dropping to prices where FTBs can afford them. Not finding ways of subbing FTBs so that they can afford to buy (because those subs inevitably come with conditions).

Without subs to FTBs, existing owners will be forced to lower their prices if they want to sell.

I don’t think ftb should be buying houses worth more than 450k with gov help. That’s not helpful.

Sure there’s London but people take that equity and use it outside London once they have children. Causing even greater disparity in towns with lower wages.

I think the route best for London is different and there should be specific key worker and ftb subsidised houses. Ie. You can buy for x - y% and you can sell for x - y%.

planning should have a shorter expiry date x

I agree they aren’t really to help FTBs but rather to help the government get re-elected (they hope).

Just find it interesting that it’s looking like central government will interfere once again in the property market. I have seen people speculating that they wouldn’t do that again as it generally causes more problems than it solves in the long term.

I can definitely see that point of view. It is London that primarily is the problem with regard to 450k. It only buys you a 1 bed flat in most parts of London whereas FTBs in other areas can buy a house with 450k or less.

@motherofratios May be interested in this debate about 450k limit in London as someone looking to buy there in the next few years.

Seeing as Hunt is widely reported to be stepping down to avoid 'doing a Portillo' he can promise the earth, moon and stars with extra sprinkles and not have to actually pay for anything.

Why would you expect them to change the habit of a lifetime ?

The issue is that the government probably SHOULD interfere in the property market. It's their responsibility to ensure that there are enough homes, available at reasonable prices, to allow people to live a reasonable live - ie management of the housing stock in the greater interests of the country.

If they aren't there to do things like this what are they there for ?

The problem is, when they do interfere, they always come up with something that makes the problem worse not better. This is because they are terrified of the effect that falling house prices might have on their election prospects and they are in thrall to the housebuilders who make obscene profits at the expense of normal people being able to live their lives in decent properties.

So nearly every action they take is normally to boost prices, benefit property VIs and corporate profits and thinly disguised as a benefit to priced out groups like FTBers.

The problem is they are hitting the point where continuing to boost prices is unaffordable and impossible. So there is panic.

True.
I do think large parts of the electorate have now cottoned on to their thinly disguised efforts to reduce falls in the housing market. There were some articles in MSM about their possible proposals at the weekend followed by 99% scathing comments. Admittedly, people who keep up to date tend to be better informed but even so, I think it shows an increase in awareness. Not clear that it will increase their votes at present.

Tbh I did always expect them to intervene in the property market because I’ve seen it happen so many times before when the market is slow like during Covid.

I did note however that a lot of people didn’t think they would intervene again.

Of course we have yet to see the details unveiled. But I don’t think there is anything they could suggest that would be enough to make much of a difference to voters at this stage.

That was a highlight on election night I remember well!

talking to an estate agent yesterday and there is currently an oversupply of flats in london. Loads have been built in west london for example. Not sure we need another 300k here. But other parts of country may be different

For fucks sake.
stop putting a sticking plaster over it and let it drop, they should have done in 2008.

There was a programme on BBC 2 last night about the housing crisis (and another episode still to air, on Tuesday I think).

It acknowledged that the Help To Buy scheme was to boost the house-building industry. As PPs have said, construction firms choose when to build, and will do so when it's most profitable. At one stage the sector was paying billions in dividends.

A PP mentioned letting the market level out by itself and it will become affordable again. But don't forget the housing market is skewed by a large number of buyers purchasing for investment, not to live in:

1. Buy-to-let investors (UK individuals)
2. Foreign investors - and not just high-end properties in Knightsbridge etc. Blocks of new build flats in bog-standard parts of London (and probably other cities too) sometimes have a proportion reserved for marketing abroad, eg to people in the Far East.
3. Holiday lets - a long-established problem in some areas, exacerbated by the ease of Airbnb etc. There are now reports of landlords ending residential tenancies and switching to holiday rentals because it's more profitable.

And before anyone starts clamouring for more social housing being the solution, just remember that means relying on the social housing provider for building maintenance and upkeep. With so many stories of mould, unfixed leaks, out-of-services lifts, etc, it's obvious that some local authorities can't even maintain their existing stock to acceptable levels of habitation.

https://www.bbc.co.uk/programmes/m001rkn5

Jeremy Hunt is a nasty piece of work and I expect nothing less of him than burning down the house to humiliate his successor.

This is true and they are overpriced

As someone trapped in the Help to Buy shitshow, having basically only done it because we were raised to believe that the only guaranteed investment is property, any intervention the tories plan is going to be for the benefit of anyone but first time buyers. Five years later and the economy has been destroyed by the same people who put the thing in place, and now the mortgage is going through the roof, the place is too small for my now new family, and the value of the property has dropped rather than increased.

I am exactly the kind of person they would expect to vote for them as I get older. Property owner (sort of), high salary, new family, blah blah. Not only have I never anyway because their core values are abhorrent to me, but now they’ve put the nail in the coffin by very actively screwing me over in every possible way financially.

Why would anyone even consider voting for them at this point? I feel like a lot of people can go along with relative financial incompetence if their values align, or if their values don’t completely align then if they are better off under whatever Party is in charge. You can’t be morally disjointed and financially incompetent, though, and it’s fascinating that the Tories don’t see it.

That program is available on iPlayer ( parts 1&2), it’s an interesting watch though depressing of course.

What’s the answer? Should be ban foreign investment in the U.K. property market? Keep adding tax and other disincentives to people wanting to own a second home?

Both of those.

And employ builders and architects and all the necessary trades directly so obscenely wealthy overseas investors can't benefit from our much needed house building programmes.

Investment in training up youngsters in the industries is needed, and that doesn't mean keeping them on horrible apprenticeship wages for the first three years of their working lives either. Otherwise they'll just aspire to work in offices.

I am so very sorry you are going through this.