SMI. Priced-out young pay for older generation to stay in their homes.

Orpheo

53% of those in receipt of Support for Mortgage Interest payments (SMI) are over 60 years old. 10% of recipients are less than 40 years old.

Not only have the younger generations been priced-out of the housing market, they are paying the mortgages of their elders, who occupy price-inflated houses, that are too big for them and that they can't pay for.

Source:

http://www.dwp.gov.uk/docs/support-for-mortgage-interest.pdf

I look forward to October when the benefit paid drops from 6% to 3.67%. Bring it on.

Graham_Devon

Thats actually a really interesting statistic.

I would have never battered an eyelid if someone suggested it was mostly the young who who taking advantage of the mortgage resuce scheme, as I would have thought they had the biggest mortgages and therefore the biggest problems.

Why on earth would more older people be using it?

Orpheo

I speculate that they have borrowed on the equity in their homes and failed to pay off their mortgages by the age of 60.

Graham_Devon

Orpheo wrote: »

I speculate that they have borrowed on the equity in their homes and failed to pay off their mortgages by the age of 60.

I think it's the only real conclusion you can come to.

Unless statistics show that a much greater proportion of over 60's saw job losses. But I don't think this is the case? Job losses were pretty much across the board. Just it's harder to get another one if you are over 60 or under 25!

CLAPTON

certainly a most interesting set of stats

it does seem unreasonable for taxpayers to be paying 6.08% interest when the average rate is much lower; so in effect the claimants are actually making money out of the payment

StevieJ

Orpheo wrote: »

I speculate that they have borrowed on the equity in their homes and failed to pay off their mortgages by the age of 60.

I though such borrowings were ineligible for mortgage support, from your link.

customers in this position do not necessarily receive Support for Mortgage interest payments in excess of their full housing costs where part of their mortgage is ineligible (taken out for some purpose other than purchasing the property or making certain home improvements).

nicko33

Orpheo wrote: »

53% of those in receipt of Support for Mortgage Interest payments (SMI) are over 60 years old. 10% of recipients are less than 40 years old.

...

I look forward to October when the benefit paid drops from 6% to 3.67%. Bring it on.

The source also shows that although there are 5 times as many 60+ getting the support than under-40s, the total paid to the 60+ is less than twice that paid to the youngsters, because the youngsters get larger payments due to their larger outstanding balances.

And when the benefit drops
"All other things being equal, this implies that a change to the standard interest rate would generally have a higher impact on the cash awards received by younger customers compared to older customers."

Orpheo

CLAPTON wrote: »

certainly a most interesting set of stats

it does seem unreasonable for taxpayers to be paying 6.08% interest when the average rate is much lower; so in effect the claimants are actually making money out of the payment

Indeed. Further reading of the document reveals that 92% of claimants are having their capital paid down by the excess. Even when it drops in October there will still be 50% of claimants having their capital paid down.

Orpheo

nicko33 wrote: »

The source also shows that although there are 5 times as many 60+ getting the support than under-40s, the total paid to the 60+ is less than twice that paid to the youngsters, because the youngsters get larger payments due to their larger outstanding balances.

This stands to reason. The youngsters have had to borrow more to feed the inflated house prices of their elders.

Orpheo

StevieJ wrote: »

I though such borrowings were ineligible for mortgage support, from your link.

Mortgage Pusher: What do you require the loan for?

Mortgagee: A new car and a holiday, er, um, I mean home improvements.

Mortgage Pusher: Home improvements it is then. That'll be no problem, the computer says yes!

Everyone knows that the right answer to "why do you want the loan?" is "home improvements."

StevieJ

CLAPTON wrote: »

certainly a most interesting set of stats

it does seem unreasonable for taxpayers to be paying 6.08% interest when the average rate is much lower; so in effect the claimants are actually making money out of the payment

But surely this could only have been done to save money on admin costs, otherwise it would have been sensible to pay the actual rate. BTW I wonder how much this costs compared to rents paid out? It may be that over 65's who claim SMI would have been much more of a burden on the state had they not bothered to purchase a property and relied 100% on the state to pay their rent during their dotage.