Buying schemes for FTB - your ideas?

[Dufflebag]

I've seen speculation in the media that the government will introduce some new buying schemes for First Time Buyers this year, and it got me wondering what those who are nearly on the ladder but could benefit from a little help to get there would ideally like.
I was thinking what we would benefit from would be support for tenants to buy from their landlords - lots of talk on here about landlords feeling squeezed alongside renters also feeling squeezed.
I was thinking something along the lines of the First Homes Scheme but instead of developers being subsidised, there'd be help towards the deposit in the form of an eg 30% discount for tenants buying the property they rent, which then gets passed down the line to future buyers (I worry all buying schemes push up prices in the end so this would have longer term benefits).
Obviously this is my own speculation but I wondered if there are obvious downsides to this idea, and also if you're a FTB what your ideal buying scheme would be.

The best thing the government can do for first time buyers is to keep their meddling noses right out of the housing industry; Help to Buy did nothing other than raise prices. Would you prefer to pay 30% less for a house or to have some short-sighted scheme brought in?

The most likely scenario is that they'll strong arm a bunch more banks into offering 40 year long mortgages, which is good for the government's PR machine, good for banks who earn ££££ more money from longer term mortgages, but terrible in the long term for borrowers.

Buying schemes are a symptom of a manipulated ("broken") housing market.

I'd like a "work for you deposit" scheme. You work a min of 1 day a weekend or weekend for a Government-approved employer and the employer puts your fixed wage (£100/day) into a housing deposit savings account. Once you've reached 50% of the deposit you need, the Government matches it and bingo, you've got your deposit.

You are required to carry on working to repay the government's 50% contribution. Or you could do work on your fixer-upper and the additional equity created (up to the amount of the loan) could be drawn down to repay the government.

Savers could also top up their housing deposit savings account with cash and the Gov. will match it like for like (again, it will be a loan).

This encourages work, savings, and buying and fixing up one's home.

I was curious as to how the long term mortgages would be a carrot to FTB - they sound terrifying! I think they are also bad for the Bank of England as they reduce ability to manage inflation, but may be wrong.
I agree that buying schemes have pushed up prices but it looks like the gov will do it again anyway, so I was speculating as to what different individuals might find helpful personally, as well as looking at shortcomings. It seems to me the First Homes concept is the first buying scheme that doesn't look set to push up prices, and also hands those reduced prices down to future buyers, but may be wrong - what do you think? Here's the original concept for anyone who hasn't come across it www.gov.uk/first-homes-scheme

Thanks @Serendipityandmore for your perspective. How long would it take someone to save a deposit using that scheme in your neck of the woods, using that idea, if you don't mind me asking?

Tighter controls on the service charges and ground rents that can be charged on leasehold flats would make a significant difference.

As a previous poster pointed out the worst thing they could do would be to introduce another "help to buy sell" type of scheme that artificially increased values.
Shared ownership too - is now showing to have been pretty unsuitable for a lot of participants.
The only one that really was useful, without causing other problems, was the help to save ISA.
Realisticly though I don't think either government can afford to do anything very meaningful. Bigger problems to address.
I'm hoping for a labour government and rent increase caps. That should help to choke out any more new entrants to the "overleveraged amateur landlords" game at least. Therefore reducing competition and prices at the bottom of the ladder.
The best thing they could do would be to massively increase the building of affordable homes - hard to do though when debt levels already so high.

I am confused- is the help not the first home scheme?

I see what you mean @DrySherry - more FTB type homes available as not being bought up as BTL.

@Whataretheodds yes that would definitely help affordability for mortgages on flats - my only anxiety personally around leasehold changes is various politicians keep mentioning 'levelling up' flat values to match house values which won't really help (as it would make flats as out of reach as houses), but I don't think that's what you mean here at all.

@Krampers no the First Home scheme is fairly under the radar - none in London that I can see but if you look at individual developers eg Barratt you can see by region where discounted new builds are offered. Help to Buy was a scheme where the government offered a loan to make the deposit up to an amount that made mortgages affordable, which finished this year.

I don't think we need schemes, we just need sufficient housing stock (so scarcity doesn't artificially drive up prices) and jobs that pay a fair reliable wage. My dd has a help to buy isa, but even that isn't needed if there's sufficient housing.

That scheme provides about 500 homes a year. Does not touch the sides in terms of demand. Your extremely lucky if you get offered one

Agree with a previous poster that the gov should stay out of the market! Generally messing around causes more issues.

I do wonder if they will reduce stamp duty to aid market fluidity. Now house prices are so high stamp duty prevents moving. A one million pound property is £41k stamp duty! Bear in mind that a £100k salary is £65k take home.

Other levers might be used to limit demand. Perhaps prevent non UK resident ownership, introduce a property value tax (beyond council tax, more like an asset tax), ban ownership of multiple properties.

Stamp duty already is zero for first time buyers though @Rollercoaster1920 up to 425k.

They could make this band higher which would benefit FTBs in very expensive areas like London. They could also increase the Lifetime ISA limit in London which is currently stuck at 450k and hasn’t moved with inflation. Martin Lewis has been campaigning for this for a while.

However, this would probably lead to the cost of flats in London rising even higher which isn’t a great idea for FTBs that don’t have help from the Bank of Mum & Dad.

DC could benefit from a key workers scheme. They don't seem to exist anymore and in London and it's suburbs it's pretty difficult to buy as a teacher, nurse etc without help of some kind.
An increase in the Help to Buy ISA purchase limit (250k outside London and £450k in) which hasn't increased since its inception, making it useless in the south east.

Don’t want the government to interfere with house prices, it just pushes up the prices!!! Perhaps they should think about changing stamp duty from paying when you purchase to when you sell.

@fussychica yes that does seem to be a big change for key workers. I hope your DC are able to find something - I know first hand how hard it is!

I think it would be an excellent idea to introduce more support for keyworkers looking to buy @fussychica

We all need and support key workers! (well most of us do). May be more of a Labour than Tory thing but hopefully Labour will be in next year anyway.

Giveaway empty houses to NHS workers.

The government should fix the cladding on thousands of flats , this would enable to sell the 1 and 2 beds to first time buyers. No point of building new overpriced flats when there areany that could be sold on to first time buyers if fixed.

FLOWER1983 that sounds like an excellent idea, make use of what is already there. Allow people who purchased them move on with their lives and open them up to people who need them.
Stop leaseholds or at least stop ground rent and maintenance charges increasing dramatically. Many FTBs struggle to afford a house but the pitfalls of buying some flats and the greater difficulty in getting a mortgage sometimes prevent FTBs getting a property they can afford.

@FLOWER1983 yes interesting point about cladding, and the importance of looking at what we can repair / conserve to widen supply.

It’s silly. I think they need to stop meddling. Stamp duty exemption is good.

Price reductions are only going to cause an issue as people can’t then make the jump to a second home (due to lack of equity). You need to do this before children or it’s not really possible. That’s going to cause a blockage on the first homes all over again.

Giving just pure and huge cash injections for ftb with no strings would increase prices case a secondary rise in the 2nd rung too. So that won’t work either, well it will for the first people who go through but the second lot it’s going to cause a problem again for that jump.

Everyone wants the best house they can get in their rung. And there’s not that many best houses. So bidding wars will ensue on those which push up prices of crappy ones too. It’s basically just always going to keep rising. That is just human nature and math.

Basically I think they should just leave it.

It would be good to keep focused on first time buyers, who are increasingly (especially in cities) families facing higher rents who are looking for stable, suitable shelter rather to move up a scale of investments.

It’s not moving up a scale of investments. It’s the housing market. You buy the only thing you can afford - usually somewhere resembling some kind of hideous student accommodation, shite, tiny, botch jobbed and wholly unsuitable for a family. Then you move up the rungs.

Those in cities either need to have a job that pays well enough to live there or move out.

I do agree a key worker housing scheme is probably a more appropriate solution.

That's not really how it works anymore @Gymnoob

What makes you say that?