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 Post subject: Re: Budget 2017
PostPosted: Wed Oct 12, 2016 5:56 pm 
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Too Big to Fail

Joined: Apr 4, 2010
Posts: 4543
SoCoDu wrote:
Luan wrote:
The system rewards prudence - to qualify you need be a FTB with an 80% LTV i.e. Only those how have saved the 20% or have received a gift will qualify.

A scheme design to promote the prudent and offspring of the rich :)

Not at all - it's designed to help the usual suspects, i.e. the financially reckless/illiterate who will cry that they didn't know property prices could go down if things go tits up again. You have to have an LTV of at least 80% to qualify. If some prudent person only had an LTV of 50% then they would not receive the grant. If someone had a 90% mortgage, then they would qualify. Obviously irrespective of being prudent, anyone who can get a high LTV of 80%+ will now do so in order to qualify, rather than take the lower LTV that they actually want and can afford. It encourages people to borrow more and ensures that people will need much smaller deposits to borrow (on new homes).


What's to stop you getting a higher LTV than you need, getting the credit and then paying off a lump sum from reserved savings?

There must be endless ways of gaming this.

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Book I, Chapter X, Part II,


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 Post subject: Re: Budget 2017
PostPosted: Wed Oct 12, 2016 5:59 pm 
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Under CAB Investigation
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Posts: 2195
Location: South Dublin
satechi wrote:
Another question is would this be continued next year and afterwards, if you are a developer and have land and want to build (and somehow get credit somewhere) you could be bogged down for years in planning system before you even lay a single foundation.

It's running until 2019.

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 Post subject: Re: Budget 2017
PostPosted: Wed Oct 12, 2016 6:34 pm 
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Joined: Jan 2, 2008
Posts: 1541
Madness of Crowds wrote:

What's to stop you getting a higher LTV than you need, getting the credit and then paying off a lump sum from reserved savings?

There must be endless ways of gaming this.


STFU I already have my masterplan in place. Highest LTV i can get plus BOI cashback and DIRT. Rent a room relief at 14k. Leaves me with sub 10% deposit net and a personal mortgage repayment of about 3/400pm.

This gets all the LOL's!!

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 Post subject: Re: Budget 2017
PostPosted: Wed Oct 12, 2016 6:45 pm 
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Real Estate Developer

Joined: Nov 20, 2014
Posts: 994
SoCoDu wrote:
satechi wrote:
Another question is would this be continued next year and afterwards, if you are a developer and have land and want to build (and somehow get credit somewhere) you could be bogged down for years in planning system before you even lay a single foundation.

It's running until 2019.

Ah missed that thanks


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 Post subject: Re: Budget 2017
PostPosted: Wed Oct 12, 2016 8:50 pm 
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Under CAB Investigation

Joined: Apr 9, 2014
Posts: 1859
SoCoDu wrote:
Luan wrote:
The system rewards prudence - to qualify you need be a FTB with an 80% LTV i.e. Only those how have saved the 20% or have received a gift will qualify.

A scheme design to promote the prudent and offspring of the rich :)

Not at all - it's designed to help the usual suspects, i.e. the financially reckless/illiterate who will cry that they didn't know property prices could go down if things go tits up again. You have to have an LTV of at least 80% to qualify. If some prudent person only had an LTV of 50% then they would not receive the grant. If someone had a 90% mortgage, then they would qualify. Obviously irrespective of being prudent, anyone who can get a high LTV of 80%+ will now do so in order to qualify, rather than take the lower LTV that they actually want and can afford. It encourages people to borrow more and ensures that people will need much smaller deposits to borrow (on new homes).

:oops:

Mis-read


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 Post subject: Re: Budget 2017
PostPosted: Wed Oct 12, 2016 8:57 pm 
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Single Home Owner

Joined: Jan 27, 2014
Posts: 116
@Luan

"The reason the CBoI is happy with the scheme is best explained with a few examples :)

Prior to the introduction this scheme a first time buyer required a deposit of €58k to €98k to buy a house priced €400k to €600k. This means the first time buyer has a LTV of 85.5% to 83.7%

Under the new scheme a buyer of a :
1. €400khouse will have a LTV of 85% (vs 85.5%)
2. €600k house will have a LTV of 83.3% (vs 83.7%)"

Eh?


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 Post subject: Re: Budget 2017
PostPosted: Wed Oct 12, 2016 9:26 pm 
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Holiday Home Owner
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Joined: Jan 8, 2008
Posts: 348
Mantissa wrote:
Would it not have made more sense to simply offer a grant to the builders instead? 20k VAT rebate for any new builds sold, subject to TCC?

Political suicide, they'd be given a kicking for announcing a measure to help their developer mates, even if it made more sense, would be so much more straightforward and actually better achieve the ultimate goal of increasing supply.

By going the FTBer route they can spin it as looking after the young couple who just want a home to start a family...


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 Post subject: Re: Budget 2017
PostPosted: Wed Oct 12, 2016 10:05 pm 
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Of Systemic Importance

Joined: Nov 4, 2011
Posts: 5500
Location: SthDub
SoCoDu wrote:
Luan wrote:
The system rewards prudence - to qualify you need be a FTB with an 80% LTV i.e. Only those how have saved the 20% or have received a gift will qualify.

A scheme design to promote the prudent and offspring of the rich :)

Not at all - it's designed to help the usual suspects, i.e. the financially reckless/illiterate who will cry that they didn't know property prices could go down if things go tits up again. You have to have an LTV of at least 80% to qualify. If some prudent person only had an LTV of 50% then they would not receive the grant. If someone had a 90% mortgage, then they would qualify. Obviously irrespective of being prudent, anyone who can get a high LTV of 80%+ will now do so in order to qualify, rather than take the lower LTV that they actually want and can afford. It encourages people to borrow more and ensures that people will need much smaller deposits to borrow (on new homes).


Had missed that 80% bit myself.
So those who could go a lower LTV are now incetivised to aim higher/bid more. Even more win win for the Builders than I previously thought


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 Post subject: Re: Budget 2017
PostPosted: Thu Oct 13, 2016 12:49 am 
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Property Magnate

Joined: Oct 12, 2014
Posts: 596
Location: Dublin
Or just bid what they were going to anyway, then hide a portion of their deposit - take the State's money... then "discover" more money just resting in another undisclosed account a year later. Use to pay down chunk of mortgage.

But yes, you are right - builder will whack 20k more on to house, now he's still selling to the exact same cohort as before... they just all have 20k extra he/she can skim off the top.
Don't worry. In the words of Mr Trump: "It's gonna be amazing."
:sick:


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 Post subject: Re: Budget 2017
PostPosted: Thu Oct 13, 2016 10:01 am 
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Holiday Home Owner

Joined: May 29, 2009
Posts: 337
Only if you can make the house price on LTI + 20% deposit - I can't. We were making up shortfall with savings, looking at LTI around 70%. So now we're stuck with fighting in an even more overheated bracket or forgoing the rebate and going a step higher, while being 20k worse off than the 'competition' who have a better LTI

As for self-build, I'd question what percentage self-build include buying a site rather than being gifted it - which is obviously very fortunate for the recipients - the value of the gift likely being 25-35% of final valuation. There must be a workaround for that too somewhere. This country runs on workarounds.


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 Post subject: Re: Budget 2017
PostPosted: Thu Oct 13, 2016 2:27 pm 
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Of Systemic Importance

Joined: Nov 4, 2011
Posts: 5500
Location: SthDub
Related or not, the timing is beautiful!

Developers have added up to €45,000 on to the price of houses since the Budget speech
In one Wicklow development, the price of a house rose by between €17,500 and €45,000 following the Government’s new first-time buyers scheme.
http://www.thejournal.ie/budget-housing ... 9-Oct2016/


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 Post subject: Re: Budget 2017
PostPosted: Thu Oct 13, 2016 3:07 pm 
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Single Home Owner

Joined: Sep 27, 2013
Posts: 189
Another thing that should be considered is that buyers are pretty much buying into negative equity. If I buy a new build today for 350k and go to sell it tomorrow as a second hand house it is really only worth 332.5k. I know its not negative equity but its less than the actual purchase price.


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 Post subject: Re: Budget 2017
PostPosted: Thu Oct 13, 2016 3:22 pm 
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Nationalised
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Joined: Jan 4, 2013
Posts: 16995
Location: To the right of the decimal place
super wrote:
Another thing that should be considered is that buyers are pretty much buying into negative equity. If I buy a new build today for 350k and go to sell it tomorrow as a second hand house it is really only worth 332.5k. I know its not negative equity but its less than the actual purchase price.


Interesting point.

I stand by my proposal of giving the grants to the developers. That might actually entice them to lower prices if needed to make a quick sale and get the grant.

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 Post subject: Re: Budget 2017
PostPosted: Thu Oct 13, 2016 8:29 pm 
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Real Estate Developer

Joined: Jun 10, 2010
Posts: 855
Soon developers will also be offering a % deposit rebate. This combined with the government rebate will cover the CBI requirements and it'll be back to the good owl days.

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 Post subject: Re: Budget 2017
PostPosted: Fri Oct 14, 2016 9:51 am 
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Of Systemic Importance

Joined: Nov 4, 2011
Posts: 5500
Location: SthDub
FF have come out against the 600k limit of the Help to Buy scheme.
The Chancers that wanted the scheme to include 2nd hand houses are now saying it is set too high and should be reduced to 400k.
Barry Cowen on SOR now saying that the upper limit being too high will lead to house price inflation!!!!

Some bunch of muppets and an even bigger bunch of idiots that vote for them.

Seperately- the Hines developers for Cherrywood were on SOR also. Asked about the Help to Buy scheme, they described it as a measure designed to give confidence to Developers and Lenders. Make of that what you will


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