Councils to offer cheap Home Loans

[Tunku]

You would think they would have learnt by now

"Scotland's biggest local authorities came under fire yesterday for a scheme to give 100 per cent mortgages to ­people who have been turned down by banks and building societies."

All I can say is "fking idiots, what caused the problem in the bloody first place?"
I really despair of this fking country and the drooling idiots in charge, who obviously had an umbilical cord wrapped around their necks at birth, and then were dropped on a concrete carpetless floor a few months later...

[EDLT]

Where are they getting the money to loan out, is council tax going to rocket?

[bazking69]

The most intelligent and astute brains available running our country we are told.
Where are they then?

[ianash]

Bunch of fecking idiots - here we go again.

[selmahoos]

It's a very good thing that 100% loans are made available to people exercising the right to buy. Many of them are getting enormous (60%) discounts from Fair Market Value (which is below Open Market Value) and many of them have lengthy (10 years +) history of successful Local Authority tenancy. From both security and ability to repay perspectives these are amongst the least risky of loans, and the high loan to purchase price doesn't mean they are necessarily anything like as high a loan to survey valuation.

[aw51 121565]

If the owners of a sold council property wish to sell it in the first ten years after purchase from the council, they must offer it back to the council first. The council can even buy it back and let the former occupiers become tenants again, if certain conditions are met. This isn't new legislation but local authorities are now introducing it.

And perhaps this is why councils are now offering 100% mortgages - it appears that they will retain control of their sold property if the buyer defaults in the first ten years?

I bet this particular council has introduced this legislation, and is using ring-fenced money (from council house sales? :cynic: ) for this scheme - the return on these funds as interest charged may well be more than if invested... (This paragraph is speculation.)

Incidentally, if a council property is sold after less than 5 years then the purchaser has to pay a proportion of their discount back to the council as well (sliding scale from 100% at nil years to 0% at 5 years). It's not all beer and skittles .