FTB 20% off new build's - am I missing something?

[Jakestar]

I'm sure we've all read the news:

http://www.bbc.co.uk/news/uk-politics-31683974

SO if I'm reading this right, if I hadn't bought a (pre-owned) house in Nov 2013 I could now bag a £250,000 new build for £200,000, wait 5 years (whilst renting a bedroom or 2 to pay the mortgage) and then sell netting the £50,000 initial discount plus any capital gains to boot?!!!

Surely there must be a catch?! If there isn't I'm pretty p$ssed that I missed this one!!

I have apprx £30,000-£40,000 equity in my house - I'm even considering selling and paying off the mortgage and applying for one of these cut price homes as an investment!!

Someone tell me the whole scheme won't work, people who buy into this will somehow come unstuck and I should thank my Chickens I've got a house I like using the old skool method of saving myself for a deposit and having a decent enough salary to get a mortgage?!

[crazy about cars]

The keyword here is "promise"

Also want to add the deal is only for new builds on "brownfield" lands. I don't think the home values would be particularly high in those areas anyway.

[jas xjr]

There is always the possibility that qualifying houses may be overpriced by 20% to begin with

[98elise]

Its a couple of months before an election. All parties will "promise" free stuff to anyone with a vote.

Its never going to happen.

[Pheo]

This promise is stupid.

Where are these extra houses going to come from? All the existing schemes have seen us producing half as many houses as needed. I fail to see what is different about this one to get us building more.

Give the money to councils, ring fenced for properly built council housing? Only time we've ever been producing enough houses was when councils were in charge.

[Paul Drawmer]

jas xjr said:

There is always the possibility that qualifying houses may be overpriced by 20% to begin with

As I understand it, the discount will be funded by the developers not having to pay councils 'development amenity', thereby reducing the developers costs.

But, surely the developers don't price houses on a cost plus basis anyway - the sale price is set by the local market conditions?
So all this will do is increase the developers profits.

[dxg]

Paul Drawmer said:

jas xjr said:

There is always the possibility that qualifying houses may be overpriced by 20% to begin with

As I understand it, the discount will be funded by the developers not having to pay councils 'development amenity', thereby reducing the developers costs.

But, surely the developers don't price houses on a cost plus basis anyway - the sale price is set by the local market conditions?
So all this will do is increase the developers profits.

This is kind of interesting. Early reports (I recall something from Savills) are suggesting that the CIL has just become another tax. Few LPAs are publishing charging schedules and those that are are not investing in infrastructure. So CIL may be dead in the water anyway. S106 obligations being removed will only further harm the provision of affordable housing.

Interesting bits of rhetoric are emerging, though. Calls to control plot densities to avoid the ghettos that attempting to create so many homes on such little available space will no doubt cause. Also calls for a new private rented sector with new builds created specifically for rental. Didn't we do this in every major city centre peaking around 2005, 2006? And didn't that do well...

Also Labour are saying that they'll force LPAs to identify the land available for housing in the future if they get in. Erm, LPAs already have to do that in their strategic housing land availability assessments!

Interesting times, though.