"Help to Buy" scheme - storing up trouble?

Londo

LE
Not really.

Main residence and a buy to let.
That's what I had when in London . The main residence I sold after 30 years and the buy to let ( a one bedroom flat I bought with a redundancy payout ) I sold about the same time . Bought both when prices were low and sold both when high , I was very lucky in that respect and retired at 60. The profit on the flat paid for this 3 bedroom house I'm in now .
 
I wouldn't by a new build if it was the last available house on earth.

they'll be falling down in ten or twenty years, ironic given the pre-fabs they replaced...
 
There was, I think by BBC, an hour's program about Persimmon Homes deep in deep pooh over appalling quality of build...including missing attic fire-walls...all allegedly geared up to mass produce/quick build on the back of Help to Buy. It looks like Cala are not the only guilty parties.

Locally, I'd say the only quality houses being built are sole developments of perhaps a half dozen homes on 5th/6th acres as farmers...or stretched developers.... sell off odd bits to small niche developers. However, they tend to be 200k to 350k plus which for up here, still gets a considerably large detatched 4 bed/ 2 public/ double garage + affair.
The rest? We see utter crap getting chucked up within 4/6 weeks of the rafts & ground services being laid.
Cheap brick, frames look like really cheap & nasty stuff, dodgy looking variances in mortars.

Our son & we did our homework well over the last year and ditched new builds.
Just 5 weeks back we nailed a lovely wee 30 year old end terrace, new fitted kitchen, new quality DG etc with large great zero maintainance front and rear gardens, numbered parking space, and in perfect overall condition looking over fields for a fixed price of just 2 thirds(!) what a locally built new 2 bed would have cost...which also screamed utter sh"t.

We were very very fortunate to nail it though. We plonked a few hundred on it over a witnessed handshake with the owners so they were made up over that deal and cancelled the next batch of viewers. I think they liked the notion of having a police person moving in beside old neighbours. I had the offer done by courier by 10am the next morning...fixed price remember. First come first served. It's getting chronic up here...big shortage of decent 1st/2nd buyers stuff.
I think "our kid" is still pinching himself...quietly.

You're right; quality isn't a thing for big developers.

I sit on a couple of construction industry committees, although i haven't been involved in house building for 15 years, I'm just on infrastructure projects.

Opposite numbers from housebuilders are full of disturbing stories from Board level.

My houses are 1890, 1950 and 1925.

Wouldn't consider anything newer than 1980 or so unless i was specifying and inspecting myself.
 
The house I'm living in is 18 years old. We found out last week that it hasn't got any insulation in the cavity walls!

Built by Bloor, this is one of 19 that were built for social housing, obviously on a budget.

I built a database to record temperatures in every room, the house is surprisingly good at heat management.

Sent from my neocore_E1R1 using Tapatalk
 

lecky

Old-Salt
The house I'm living in is 18 years old. We found out last week that it hasn't got any insulation in the cavity walls!

Built by Bloor, this is one of 19 that were built for social housing, obviously on a budget.

I built a database to record temperatures in every room, the house is surprisingly good at heat management.

Sent from my neocore_E1R1 using Tapatalk
You're lucky you got Cavity walls.
We watched some new homes going up on the Cadbury site at Keynsham... about £500k a piece.
When they were finished, they looked like £350K homes with some of the balance going to finance some of the social housing. They were all identically finished, but the Social housing build stood out on the build, as they went up as single skinned!
 
$1,100 pa, wow, my condo (east of Toronto which I sold 5 yrs ago), cost £531 PER MONTH for building & grounds maintenance. They also have a scheme where your unit designation determines *special* replacement costs, at one point they (condo corporation) decided to paint, repair, & resurface the underground parking garage. It cost a Prime 4 (1 bedroom) unit £1400 whereas a Prime 1 (3 bedroom) unit paid $3800 for exactly the same work.
I could never buy leasehold , its like renting but with slightly better terms.
 

Joshua Slocum

LE
Book Reviewer
I've recently learned that I'm eligible to participate in the Governments Help to Buy (HTB) scheme - which will lend you 25% of the purchase price (40% in That London) for properties valued up to £600k.
Interest free for five years, new build only, interest starts in year 6.

On the face of it, it looks awesome - a boost from HMG at a very favourable interest rate.

I've looked at some of the properties in one area I'd consider, and it strikes me that as new build, the actual premises aren't big, the plots are small and the prices seem to be inflated when you compare to what you could get for the same price sans HTB.

I also note that the major housebuilders are making record profits, which I do not think is a coincidence.

Having given the matter some consideration, I think that anyone purchasing with HTB is storing up problems. The scheme is due to end in a few years, and if you're paying a premium / inflated price because of HTB, you'll have problems offloading the property at a profit when you come to seel. the loan from HTB has to be repaid, at a 5age value equal to the amount lent in the first place. Doubled in value? Double the loan. But halved? So does to HTB loan.

HTB looks to em like its doing two things, other than allowing people to buy a more expensive property than they otherwise would.

1. Its transferring Government money to the P&L of the major housebuilders.
2. Its causing a house price bubble and we know how the bubble story ends.

I do think if you're looking to by a home, rather than looking to buy an asset that you happen to live in, HTB can make sense - but you'll pay over the odds. But if you're buying now in the expectation of trading up in a few years, I think you'll struggle to get a decent sale prices as you've paid over the odds "now" and the scheme isn't available to a person looking to buy your home in the future.

Couple of examples below, with and without HTB.


£570k with HTB: Check out this property for sale on Rightmove!
£mile or two away, £575k no HTB: Check out this property for sale on Rightmove!
there was an article in the Times earlier this year, it said it was storing up trouble, inflating costs, and the possibility of negative equity, like so many schemes that governments put out, its just to make money for the big boys that bank roll them
 

Londo

LE
The house I'm living in is 18 years old. We found out last week that it hasn't got any insulation in the cavity walls!

Built by Bloor, this is one of 19 that were built for social housing, obviously on a budget.

I built a database to record temperatures in every room, the house is surprisingly good at heat management.

Sent from my neocore_E1R1 using Tapatalk
We got cavity walls with no insulation and the couple of houses down my street that were plagued by the door to door salesmen a few years back and got the insulation done are new regretting it as they now have a damp problem . Glad I told the salespeople to do a running jump .
 
The really interesting point about any new build, is that if you live in a new build social housing, it will have the most advanced components in terms of windows, doors, etc due to the legislative requirement to meet the Secure by Design standard. Yet the private house across the other side of the development that costs £800k for five beds will have the cheapest and most low-tech stuff in it.
That’s nonesense frankly. If anything, I think the opposite is the case.

Grenfell House wasn’t a new build but the block was completely renovated and look what happened there because corners were cut on the quality of the cladding and a sprinkler system was deemed to be too costly and unnecessary which resulted in the disaster.

Generally speaking as far as I’m aware, the majority of social housing developments, in London anyway, are part of new larger private developments whereby a number of new units in the development are reserved for social housing tenants. That’s often a planning permission requirement.

It would be daft and more expensive in project management terms to use two categories of materials based on cost and ensure that the less expensive materials were installed in the right units. It would also be very noticeable that the developer had done so.

Definitely not good for sales at all.
 

MrBane

LE
Moderator
Kit Reviewer
Reviews Editor
That’s nonesense frankly. If anything, I think the opposite is the case.

Grenfell House wasn’t a new build but the block was completely renovated and look what happened there because corners were cut on the quality of the cladding and a sprinkler system was deemed to be too costly and unnecessary which resulted in the disaster.

Generally speaking as far as I’m aware, the majority of social housing developments, in London anyway, are part of new larger private developments whereby a number of new units in the development are reserved for social housing tenants. That’s often a planning permission requirement.

It would be daft and more expensive in project management terms to use two categories of materials based on cost and ensure that the less expensive materials were installed in the right units. It would also be very noticeable that the developer had done so.

Definitely not good for sales at all.
No, I'm factually correct, because that's one of my of specialisms in work. I'm not talking about fire, I'm talking about security - legislatively, a social build house must meet SBD standard, and if it doesn't, the developer loses a huge whack of funding. Plus Grenfell is donkeys old anyway and would've been exempt.

As such, doors, windows, etc must be SBD gold standard which are expensive bits of kit attack tested to stop sophisticated entry attacks.

Private builds do not. They can have £80 front doors if that's the cheapest they can get, which could be jemmied open with a screwdriver.

 
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No, I'm factually correct, because that's one of my of specialisms in work. I'm not talking about fire, I'm talking about security - legislatively, a social build house must meet SBD standard, and if it doesn't, the developer loses a huge whack of funding. Plus Grenfell is donkeys old anyway and would've been exempt.

As such, doors, windows, etc must be SBD gold standard which are expensive bits of kit attack tested to stop sophisticated entry attacks.

Private builds do not. They can have £80 front doors if that's the cheapest they can get, which could be jemmied open with a screwdriver.

Are you sure you’re not confusing ‘social’ (rental properties owned and let by housing associations) with ‘affordable’ housing, which the developer has to sell cheap(ish)?
 

Joshua Slocum

LE
Book Reviewer
The lease on our 1916 built house is £2.90 per annum and hasn't gone up in the 23 years we have been here.
you are lucky, however companies are always advertising to buy leases, i t may well be that yours is managed by an old family solicitor, but as soon as a relative gets hold of the estate, its all about the money
you should consider trying to purchase it
 

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