Property Market 2020

LJ12345 wrote: »

What’s the value of the new build houses going back to market within 12 months of purchase? It must happen - have they lost value.

I don't know- but I imagine its rare, as there are a lot of transactional costs associated with buying and selling property (Estate Agent fees etc etc). You'd need prices to be rising by at least 1.5-2% to break even- stagnant prices or falling prices, and you're in the red.

awec wrote: »

It’s a tax refund. You cannot get a cent more than you’ve paid in tax. Of course those who contribute the most will benefit the most, those who contribute less will benefit less.

People who build houses benefit from scheme to incentivise building houses. People who need deposits benefit from scheme to aid with deposits. It’s hardly a shock?

The scheme was sold as a help-to-buy scheme- and a decision to allow people use the 20k as a deposit was only made after the fact. It was not allowed at the outset. Keep in mind the politicians and the Central bank were singing off two entirely different hymn sheets- which is how FTBs have a 10% deposit requirement versus a 20% requirement for everyone else. The 20% requirement for subsequent purchasers is as much an impossible target for a majority of subsequent purchasers as is the 10% for FTBs- yet the FTBs get a hand-out for their 10% but the subsequent buyers don't.

My proposal is a tiered SSIA scheme is a different top-up percentage for different groups of people- but allow everyone enter the SSIA scheme- and have a default top-up treatment for those who don't use their SSIA account for a deposit- and also- most importantly, don't have an end-date on the scheme- so you don't end up with a cohort of people all entering the market at the same time.

You and I obviously have different opinions on whether the HTB scheme, as it stands, has helped matters and for whom it has helped matters. Looking solely at the manner it was amended after it was drafted- to allow it be used for deposits- seems to me to be the sole beneficial manner in which it has helped FTBs- given the entire sum was immediately incremented onto the purchase price for houses.

Any new scheme has to be more open- and has to be open to second hand property- and non-FTB purchasers.

awec wrote: »

HTB money or no HTB money you'd be doing well to flip a property in 1 year and not make a loss when you take into account all the extra costs with buying.

Unless prices are absolutely rocketing up.

There is also the fact that they're no longer eligible for the HTB grant- so the subsequent purchase will be so much more difficult for them...… No HTB grant to assist with the deposit, and a deposit requirement of 20% versus 10%...……..

Marius34 wrote: »

New houses are bought not only by FTB. I can't imagine, that same property sold on second hand market looses 5% in value.. Maybe 1-2%, but not 5%. As a second time buyer wanting to buy A/B rated new or recently built I would look what can I get best for value. And what if HTB incentive would be 100K? Identical houses would be 100K different in price value depending if it's sold as new or Second hand?

Fewer than half of all new houses make the open market (fully half are snapped up by REITs, Housing Associations, Local Authorities, Vulture Funds etc). Of those that do make the open market- a FTB has half the deposit requirement of a non-FTB- and they get a 20k 'grant' (tax rebate) into their hands which can be used towards the deposit- with similar lending multiples as for any other purchaser. Aka- the playing field is massively tilted in favour of the FTB- subsequent buyers are not excluded from the market- however, the cards are stacked against them. On the other hand- a secondhand property has no such HTB grant towards the deposit for a prospective buyer- however, the FTB is still incentivised over a subsequent buyer- by virtue of the lower deposit requirement.

There is active assistance towards FTBs- through both the deposit rules- and also they qualify for a tax rebate that subsequent purchasers do not.

I can easily imagine a 1 year old property loosing some of its initial price- to what extent depends on a lot of factors, not least of which is the prevailing state of the market- aka if average prices are rising by 3-4% (possible in some areas) its unlikely that a 1 year old property will suffer too badly in its resale price- however, all things else being equal, it would be more attractive to a subsequent buyer- who gets the A-B house at a discount, than a FTB who won't get their 'grant' towards its purchase.

Its all hypothetical- and every situation is unique- you could end up in a situation where there was little interest in a property and have to discount it further to shift it- or you could get a bidding war- and a boon...….

Either way- you really have to appreciate just how different a FTB is from someone else- and once you see what governs a FTB- any divergence from this governance- makes it less likely that a FTB will buy your house- and more likely that a subsequent buyer has a better shout-in on it.

The 10% and 20% deposit requirements are tough barriers for everyone- but a FTB gets a massive help towards their 10%- when this help is taken out of the equation- its massive, its terminal for many FTBs- unless there is a fundamental reason for them to look at a secondhand property- such as a massive discount on what it would otherwise cost. As for the non-subsequent buyer and the 20% deposit requirement- bridging loans used exist for covering the time between selling a property and buying a new one- and once upon a time people had sizeable equity in their homes. Bridging loans no longer exist- and lots of people do not have sizeable equity in their homes, even if they're not in negative equity...….. So- they're stuck.

Marius34 wrote: »

I'm aware that HTB, is quite small portion of new property. Around 5K, same STB for new property around 5K. So it's equal number of players in new builds. I do agree that Central Bank has big impact on Price, what seems not releastic, that 5% incentives, directly associated with 5% increase of new build. More likely 2%

HTB is up to 20k or 5% of the value of a property- whichever is lower.
The STB needs a 20% deposit for a new property.
It most certainly is *not* an equal number of players in new builds- mortgage figures from the Central Bank depict this sharply.

I'm not clear what you're saying about 5% incentives and 5% increase in new builds. New builds increased from under a thousand units to over 20k units in 2019.

The Central bank rules are a 10% deposit requirement for First Time Buyers- and a 20% deposit for any subsequent buyers.

Can you clarify what you mean by 5% and 2% changes in build increases- I'd love to know what premise you're basing this on- and indeed, how it relates to the current situation we find ourselves in.

Queasy Tadpole wrote: »

I'm looking to buy at the moment and is it me or has the market completely slowed down?

I was in this position last year and had to hold off, the difference in properties coming up for sale in my view is crazy.

Prices seem the same to me yet the availability of properties seems way lower.

The length of time to sell a property has lengthened considerably- much to the worry of estate agents. Some people are lowering prices to try and generate interest- however, the memo isn't out there yet, lots of people don't like what they're hearing and are holding out in the expectation that they'll get a better price if they hold off selling.

There are a lot of executor sales and sales of BTL properties out there at the moment- and the condition many of these in is pretty appalling.