Support for Mortgage Interest Changes

andyandflo

dmg24 wrote: »

This is where your argument completely falls down.

Would you rather someone with a mortgage have help with their payments, who is most likely to have worked for some time in order to have been offered a mortgage in the first place, or some landlord receive payments from the govt in order to house a tenant? The latter is a classic example of making the rich even more so, and keeping the poor exactly where they are!

The great majority of mortgage payments are lower than equivalent rents. In order for a landlord to invest a property they would expect at least an 8% yield, usually closer to 10%. This is higher than most mortgages.

Do you have any informed opinions on the subject? At the moment you do appear to be spouting hot air.

Hi,
Ok the argument seems to be homeowners v tenants.
1. No, I agree that some help is needed for both. What this all started with was when I found out that the rate of interest paid as benefit currently stands at 6.08%. This is in my opinion totally unfair to those that actually pay that rate or more to the bank compared to those that actually pay less than 6.08%. The excess is used to reduce the capital debt - something that should not happen.

2. It does not matter that they did get a mortgage in the past through their hard work, the problem is as I see it, is that those that have had it cushy for so long with the interest paid AND some capital are now complaining that they might have to dig in their pockets to cover the anticipated shortfall following the budget.

3. The ironic thing is that up until now those lucky souls have used the benefit to 'lock in' the equity in their home. Is that right, was that the intention of the legislation?

4. What you are saying is that the rich get richer landlords, are the only ones gaining out of this. What about the banks that are receiving taxpayers money by way of the benefit. Surely they are getting richer as well. Both parties are gaining in my opinion, but what is also happening is that the locked in equity is never taken into account for tax or benefits if the property is their only home. Why should these homeowners have that insurance policy?

5. Who are the poor then? the tenants of course. They are not getting poorer, it's the homeowners with equity that are getting richer by comparison (the value of their equity is rising with the increase in value of the property).

6. The argument re amount paid - rent v mortgage depends on the level of mortgage debt and the interest that is being paid by the homeowner. Of course there are differences - but those differences go both ways.

7. How to solve it? How about building more council houses? Should we not have the same level and amount of support given to both owners and tenants based purely on the property needs of the family not what they would like to live in?
Is it right that Mr & Mrs A with no children live in a 5 bed detached house valued say £650,000 with a mortgage of £200,000 get full relief on that interest and protect their equity of £450,000? Whereas Mr & Mrs B with 5 children under 16, rent a 3 bed home with a maximum rental paid via housing benefit because that is the size of house relevant to their family needs?

Actually we should be actively building more council homes - not private ones! Then the housing benefit would go back to the council and not a private landlord.

We in this country have become so pre occupied with home ownership that we see it as a right! Let us go back to the times when owning a property WAS the norm for the very wealthy only. This argument would not be happening if the homeowners were able to pay their way without looking to benefits to help them.
As I said before If you can't afford it - you can't have it!!

Finally you ask to back up my argument, it would be nice for a change to see you put forward a valid and acceptable argument putting forward statistics which back your case!

andyandflo

LizzieS wrote: »

I've never seen a house go from 35K to 200K in the last 15 years (must be where I live, lol).

Neither have I!!

The same house that I live in cost £87,000 in 1995. They are now selling for £178,000. An increase of £91,000 over 15 years = £6067 pa.

And I live in a fairly expensive area.

mumofjusttwo

I am concerned that I will not be able to keep up my payments , although I have a little money in a savings account that won't last long. i already have to use savings to cover some of my mortage.

Ironically I would be better of if I moved out and rented and the government would be paying out more money but don't think I can sell the property and then get HB so would be homeless.


Hope to find a job but hear of people saying there are no jobs and others saying there are. Hope it is the later.

Kirri

andyandflo wrote: »

Hi,
Ok the argument seems to be homeowners v tenants.
1. No, I agree that some help is needed for both. What this all started with was when I found out that the rate of interest paid as benefit currently stands at 6.08%. This is in my opinion totally unfair to those that actually pay that rate or more to the bank compared to those that actually pay less than 6.08%. The excess is used to reduce the capital debt - something that should not happen.

2. It does not matter that they did get a mortgage in the past through their hard work, the problem is as I see it, is that those that have had it cushy for so long with the interest paid AND some capital are now complaining that they might have to dig in their pockets to cover the anticipated shortfall following the budget.

3. The ironic thing is that up until now those lucky souls have used the benefit to 'lock in' the equity in their home. Is that right, was that the intention of the legislation?

4. What you are saying is that the rich get richer landlords, are the only ones gaining out of this. What about the banks that are receiving taxpayers money by way of the benefit. Surely they are getting richer as well. Both parties are gaining in my opinion, but what is also happening is that the locked in equity is never taken into account for tax or benefits if the property is their only home. Why should these homeowners have that insurance policy?

5. Who are the poor then? the tenants of course. They are not getting poorer, it's the homeowners with equity that are getting richer by comparison (the value of their equity is rising with the increase in value of the property).

6. The argument re amount paid - rent v mortgage depends on the level of mortgage debt and the interest that is being paid by the homeowner. Of course there are differences - but those differences go both ways.

7. How to solve it? How about building more council houses? Should we not have the same level and amount of support given to both owners and tenants based purely on the property needs of the family not what they would like to live in?
Is it right that Mr & Mrs A with no children live in a 5 bed detached house valued say £650,000 with a mortgage of £200,000 get full relief on that interest and protect their equity of £450,000? Whereas Mr & Mrs B with 5 children under 16, rent a 3 bed home with a maximum rental paid via housing benefit because that is the size of house relevant to their family needs?

Actually we should be actively building more council homes - not private ones! Then the housing benefit would go back to the council and not a private landlord.

We in this country have become so pre occupied with home ownership that we see it as a right! Let us go back to the times when owning a property WAS the norm for the very wealthy only. This argument would not be happening if the homeowners were able to pay their way without looking to benefits to help them.
As I said before If you can't afford it - you can't have it!!

Finally you ask to back up my argument, it would be nice for a change to see you put forward a valid and acceptable argument putting forward statistics which back your case!

Don't forget that not everyone who is claiming SMI has money to 'dig deep' into, I'm sure people would be happy if they did have savings left to use up!!!! If they did they would not be on IB JSA and claiming SMI anyway! For the people who have no savings or have used them up trying to live already post job losses, and are currently claiming, then 61.50 a week JSA or whatever it is, is not also going to cover the mortgage as well as the bills. No one has a right to a home, I don't think anyone is saying that, but rehousing people post repossession and paying rental thereafter isn't going to be any cheaper and either way people need to be housed.

Not everyone has equity in their houses, there are a fair few people in negative equity at the moment so there is nothing to 'protect' other than a roof over their head. Maybe some have equity and could downsize, they are the lucky ones, but there are maybe just as many who bought later when property was already expensive in minimal sized places which are now not worth any more or maybe less.

People in larger houses or in couples are less likely to be claiming if they have a partner who is working anyway and if they were the lucky ones who were earning so much their partner didn't need to work they probably have quite a bit in savings precluding them from benefits in the first place. It would be interesting to see the stats of the average person who is claiming this, I doubt it's amongst the wealthiest people!!!

TOBRUK

citizen11 wrote: »

I earn 50K, the house I rent is worth 200k. My next door neighbour is a sales assistant and has been all her working life, she bought her house 15 years ago for 35K and has nearly paid the mortage off.

For me to buy the same house I would to put down 50K and take a big mortgage.

A 50K/year professional lives next door a sales assistant ~18k/year? and is much poorer due to a massive mortgage.

Why is that when on the face of it I have been more successful?

That is reduced social mobility.

How do you measure success?! The amount you earn? How can you say that you are more successful than your next door neighbour! I can't believe it!

She is a sales assistant, you say you are a professional - what does it matter what your job is? Is it the fact that you may have been to college (if you have) and she may not have. She may have a degree etc but chooses to do what she does.

The fact that I went to University doesn't make me any better than someone who hasn't, and the type of job you do doesn't necessarily make you more successful!

Imagine if you were to roll back the years to 15 years ago hey, you could also have bought the house with your 50k for 35k AND you'd have 15k left over!

You can't compare situations, prices of houses years ago and now, what may or not have been!

Wutang_2

andyandflo wrote: »

Sorry to be blunt - I come from an age (61 yrs) when you were taught that if you could not afford it - you didn't get it.
so, even if you have equity in your home but still can't afford it, SELL the damn thing and rent elsewhere. No you wouldn't get housing benefit until you had depleted your capital. But what gives you the right to hold on to the equity? (It's mine and I worked for it! - tell that to the pensioners that have lost everything when their company pension scheme folded and got nothing!!) We all have to face pain at sometime in our life and that is all it is - short term pain!!

Well done mister - you have managed to distract this whole thread with your "I come from an age.." opinions and not the initial point of this thread. Hope you're happy?

Go and start another thread called "During the war...."

andyandflo

Wutang wrote: »

Well done mister - you have managed to distract this whole thread with your "I come from an age.." opinions and not the initial point of this thread. Hope you're happy?

Go and start another thread called "During the war...."

I have already pointed out two matters that ARE directly related to the original posting.
1. Yes the rate of SMI is going down and so it should. Too many people are being overpaid SMI because the interest rate the governemnt is currently using is greater than the interest being charged by the bank to the claimant. The difference is being used to reduce the capital/arrears - a great big NO NO!

2. If you can't afford the mortgage after this reduction, sell your house, and any equity you make plus any savings is over £10,000, use it to pay the rent on another home. The government has no place in 'protecting' people's equity by the government paying the mortgage interest.

And all I was finally saying is that there is nothing wrong in spending what you earn, and not a penny more! That gives peace of mind without stress.

OK if you lose the equity, it is only another form of savings, that are there for the 'bad' times. We should use our own money first before expecting handouts to keep you in your home of choice!

Deepmistrust

andyandflo wrote: »

Neither have I!!

The same house that I live in cost £87,000 in 1995. They are now selling for £178,000. An increase of £91,000 over 15 years = £6067 pa.

And I live in a fairly expensive area.

My first house in 2001 purchased for £120k is now valued at £250k. (Though in reality would probably only achieve about £230k)

So that is £110 - £130k in 9 years.

Deepmistrust

andyandflo wrote: »

I have already pointed out two matters that ARE directly related to the original posting.
1. Yes the rate of SMI is going down and so it should. Too many people are being overpaid SMI because the interest rate the governemnt is currently using is greater than the interest being charged by the bank to the claimant. The difference is being used to reduce the capital/arrears - a great big NO NO!

2. If you can't afford the mortgage after this reduction, sell your house, and any equity you make plus any savings is over £10,000, use it to pay the rent on another home. The government has no place in 'protecting' people's equity by the government paying the mortgage interest.

And all I was finally saying is that there is nothing wrong in spending what you earn, and not a penny more! That gives peace of mind without stress.

OK if you lose the equity, it is only another form of savings, that are there for the 'bad' times. We should use our own money first before expecting handouts to keep you in your home of choice!

Why do you equate a persons home with something they should just sell, like a spare car, when they hit hard times?

andyandflo

Deepmistrust wrote: »

My first house in 2001 purchased for £120k is now valued at £250k. (Though in reality would probably only achieve about £230k)

So that is £110 - £130k in 9 years.

Which proves the point that the equity you have built up of £130,000 should NOT be ring fenced by the government to protect it for you. If you can't afford the mortgage sell and rent using the equity!

AND help us all out by then not needing to claim SMI or Housing benefit - if more did that, the country would be that much healthier, financially!!