Councils want power to offer mortgages

lynzpower

I just cannot see how this is a good idea at all.

how can they evict non-payers knowing that they will have to go onto thier own homeless provision stock?

The government already does do some lending- budgeting loans. Anyone qwhos ever tried to get one of these will tell you what a shower the whole system is.

Also the political aspects- would tory run councils lend more than labour? Who knows. I just wouldnt like officials tinkering with things they know nothing about TBH.

Out of interest, there must have been a good reason why councils stopped offering mortgages, ( I didnt know they ever did) does anyone know?
Please keep the government away from lending.

lynzpower

napoleon wrote: »

yes, whack the cost of it onto the council tax - the cure for all financial ills.

Oh yeah, and then even more people on council tax benefit, to pay for the council taxz we can no longer afford as it keeps rising due to bad debts. Just rising tides of claimants, ever many and his dog would have to claim, its getting more likely every time council tax goes up annually, of course.

Not being funny, but if I knew my mortgage was run by the government, I probably would be much less likely to pay it on time.

Wonder if in this dumb new world, one would go to prison for non payment, same as you can for council tax ?

this literally is cradle to grave, the government does everything for you. Fabulous.
Educates you feeds you lends to you, cares for you when sick, feeds and houses you in prison when you cant afford to pay because the government hasnt provided enough jobs or tax credit, releases you back into the community to live on CTB and HB then pays your funeral expenses for you on your final day.

I wouldnt mind, but they do such a crap job, why on earth would anyone want them anywhere near it!

Its a big enough mess as it is.

Yes I am totally :mad:

brightonman123

where will the councils get the money? or are they just going to be agents? will they be qualified? what happens to the profuts (if any)..

Gorgeous_George

lynzpower wrote: »

Not being funny, but if I knew my mortgage was run by the government, I probably would be much less likely to pay it on time.

Wonder if in this dumb new world, one would go to prison for non payment, same as you can for council tax ?

Therein lies the problem.

What should be done about those who choose not to pay their way in life? Prison is a last resort.

GG

rolo1952

Well back in 1976 I was very grateful to my local council for agreeing to grant me a £6000 mortgage to buy my first proprty. This was for a 2 year old flat built by Barrat.
From memory the monthly payment was £40 per month interest rate fixed for the 25 year period.

The flat had been repossesed by the council for non payment by the previous owner.

I was required to be interviewed by the finance officer as to my suitabilty before they agreed to lend me the money.

This was a lifeline fo me as despite all the local authority housing at the time I would have had to wait aprox 5 years for a council flat.

Anyone have any ideas how councils could do this type of thing back then and not now.

baby_boomer

rolo1952 wrote: »

I was required to be interviewed by the finance officer as to my suitabilty before they agreed to lend me the money.

And not just by Councils. In those days mortgages were not thrown around like confetti and you had to jump through several hoops - including the sex test [males only] at least until 1975.

seven-day-weekend

Some friends of ours had a 95% fixed rate Council mortgage too which helped them to buy their first home.

We couldn't get a mortgage at all in 1976 because our house was over 100 years old. (Just an ordinary mid-terrace house). In the end, after an interview with an IFA and Staffordshire Building Society, we were able to borrow 75% of the asking price PLUS had to have an indemnity to assure the lender of their money if all went pear shaped.

They didn't give them out like sweets in those days.

Ah yes - the price of the house £3,000 of which we were allowed to have on mortgage £2750.

We lived in this house until 2004 when we went to Spain and now our son lives in it.

I can't believe that anyone would even WANT 125% mortgage, let alone lenders being daft enough to grant them.

baileysbattlebus

I have no objection to councils offering mortgages - they did when I was younger - the fixed rate my parent's friends got was higher than the variable rate at the time - which was why people thought they were mad. But the rate was fixed for 25 years. Mortgage borrowing was from limited sources then - building societies and some times councils and the criteria for being accepted by either was strict.

Also, there wasn't the bottomless money pit that happened when the banks were able to offer mortgages and not just loans. The building societies were deregulated in 1981, by Mrs Thatcher, allowing banks and other institutions to provide mortgages.

When mortgages were provided by a building society each branch had an amount of money to lend each month, once it was gone it was gone. They had fairly strict lending criteria based on income and savings and it was backed by household savings - they had to have the money to lend.

When deregulation happened the banks and financial instutions fell over themselves to give people mortgages.

100% mortgages appeared and they didn't have to have the money to lend the money could come from a number of sources like short term money market funds etc.

Lending ratios changed from the traditonal 3x. +1, I remember in the mid 1980's being offered 4.5 times salary. We didn't take it, we bought a cheaper house.

In the 50's about 30% of people owned their homes by the mid 90's it was nearly 70% and now I think the figure just tops 80%.

Easy money and a buying frenzy. Hey Ho!

baileysbattlebus

Another big change I remember is borrowing additional money if you wanted to build an extension / double glazing etc.

The loan was usually from your existing lender and if I remember rightly added to your existing mortgage - if it was for an extension the money was usually released in stages, as each stage was completed you go a bit of money. It was spent on the property.

It changed to where you borrowed additional money as a separate loan secured against your house and used the money for anything. You could say it was for an extension etc, but use it for what you liked. The start of equity release.


There have been some big changes in financial regulation over the last 25 to 30 years, not all of them for best.

Generali

Gorgeous_George wrote: »

What is needed is more council-owned homes. These could be provided by building new housing estates (100% council owned), compulsory purchase of unused houses or by snapping up selected bargains at the auctions.

Then, after paying the equivalent of £££s in Housing Benefit, at least they would own the house.

GG

Most modern built flats aren't built to a high enough standard to be used for social housing directly. The only way it can be is for a private LL to let it to someone on housing benefit.