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Star Letter Extra 05/07/13

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  • 05/07/2013
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Star Letter Extra 05/07/13
Each Friday, Mortgage Solutions takes a look back at the best reader comments on the website.

Help to Buy could be ‘hazard to economy’ – Taylor Wimpey CEO

Could it be that the CEO is more concerned with phase two of Help to Buy when in theory it opens up to all non-new build properties this coming January.

Whilst the fine detail is yet to be confirmed, it is clear that new build developers will have competition in this sector of the market for sales that they have not had to face for some years. Up until now, any buyer looking to purchase a property with an equity share element has had to go new build.

Naturally, developers may resort to re-introducing their own equity sharing schemes but this means committing resources when at present the help to buy scheme is doing the job more than adequately for them – for free!

jimW

Ask the Experts: Is interest-only gone for good?

While the availability of interest only has been rightly decimated from the free-for-all of years ago, I suspect criteria will be relaxed slightly as the market recovers.

From a lender’s point of view, a repayment loan book is always reducing as capital payments are made each month, so there is constant pressure to lend the money again to maintain market share and maintain interest payments to savers/investments.

This either means a change of mood on interest-only criteria as lenders start to re-interpret the MMR rules or sustained competition on pricing to be the lender of choice. Either way, this should ensure choice is available for borrowers.

Arron Bardoe

Fracking house price threat spreads

If we had proper property tax this would be sorted out very easily. If the value of your land went down, your council tax would go down a great deal, so you have an automatic mechanism to compensate people for loss of land value.

Instead, local government is largely funded by central government grants, so regardless of what happens to the value of your land, you still have to pay VAT, NI, income tax, corporation tax and so on at the same rate.

mombers

Stamp Duty reform: Scotland’s done it, can Westminster follow? – Marketwatch

Getting rid of the current structure clearly makes sense. But the way the Scottish government plans to implement it, it won’t reduce costs to most buyers.

Mark Hordern

Buy-to-let lending cap willl help first-time buyers – think tank

Residential lending is strictly regulated according to affordability, and lending more residential mortgages won’t bring prices down to levels that are attainable for most first-time buyers.

Even with buy-to-let lending reigned in, who’s to say that those ‘trapped’ in the rental sector would be able to secure mortgage finance for a comparable property?

Unless a proportional amount of those currently in the rental sector were to immediately scale up to home-ownership – unlikely, in my view – capping BTL lending and increasing interest rates would force private rents upwards. A policy designed to help private tenants would in many cases achieve the opposite.

This could work in tandem with an unprecedented homebuilding initiative, but on its own would likely be disastrous for both landlords and tenants.

Brian Godfrey

Thank you for your comments this week

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