Support for mortgage interest (SMI) extended AGAIN

julieq

Incidentally that document is about HMS, not SMI.

julieq

RenovationMan wrote: »

"nowt"?

Northern Monkey.

Want to make summat of it?

Mrs_Arcanum

ILW wrote: »

If you think £110,000,000 is peanuts, I would be grateful if you could send me a cheque for that amount.

The Euromillion pot is bigger this week!

blueboy43 wrote: »

Of all the benefits that taxpayers provide, why is it that this one proves so emotive ?

1) It doesn't seem to cost much.
2) Not that many people seem to get it.
3) The number who do receive it is vastly less than in the 1990's
4) The average payment in May 2007 was £47 a week
5) Many of the recipients are elderly (in 2008 more than 50% of people receiving this benefit were also receiving pension credit - ie they are income poor pensioners)

http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/snsp-00737.pdf

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

Is it just the green eyed monster within us, and are there people who want elderly people thrown out on to the freezing streets - JUST SO THEY CAN GET A CHEAP HOUSE !!!

Some genuine people who are affected by the changes http://www.advancehousing.org.uk/index.asp?m=302&s=315&ss=327&t=The+detail
How can a Shared ownership mortgage be a 100% mortgage? Yet the government say it is. The average cost of keeping someone with Learning Difficulties or Long term Mental Health problems in rented or residential care can be as much as £8,500 MORE than getting them into a shared ownership property with SMI. Either way the taxpayer is funding their home.

ILW

I wish someone could clear up what the SMI is actually paid on, even the HMG website is pretty vague about how it is worked out.

If as said earlier that 50% of it goes to pensioners, it just does not add up that it is only for the initial house purchase.

StevieJ

Graham_Devon wrote: »

Oh yet more capital isn't paid off, but is paid off, but in net terms its not paid off, but even if capital is paid off it doesn't matter.

What is the problem with assuming everyone pays the average as we don't actually know any different.

StevieJ

ILW wrote: »

I wish someone could clear up what the SMI is actually paid on, even the HMG website is pretty vague about how it is worked out.

If as said earlier that 50% of it goes to pensioners, it just does not add up that it is only for the initial house purchase.

From the link above, no mention of a couple of weeks in Barbados.

interest on loans taken out for repairs or improvements that are necessary to maintain the fitness of the property for human habitation

;

Graham_Devon

ILW wrote: »

I wish someone could clear up what the SMI is actually paid on, even the HMG website is pretty vague about how it is worked out.

If as said earlier that 50% of it goes to pensioners, it just does not add up that it is only for the initial house purchase.

Right, this is from August 2010, and the interest rate has changed since then, however, it clears a few things up.

1. BEFORE the interest change. 92% of SMI recipients were receiving payments in excess of their interest payments. I.e. 92% of SMI recipients were getting their capital paid down on top of the interest.

2. AFTER the interest change, 50% of SMI recipients are receiving payments in excess of their interest rate. I.e. 50% of SMI recipients are getting their capital paid down on top of the interest.

3. SMI covers the initial mortgage AND any remortgaging taken out for making home improvements.

4. 115,000 customers in November 2009 were having their capital paid down on top of interest payments.

5. SMI has had an uplift. It was always intended to pay 1.58% above base rate, giving a total of 2.08% now. The 6.08% rate was an emergency rate. When the emergency rate was seen as in their words "not the best use of taxpayers money" it was to reduce to 2.08%. However, it was temporarily lifted to 3.67% as this was the rate split right down the middle, overpaying 50%, underpaying 50%.

6. In November 2009, 52% of people claiming SMI were of pension age and in receipt of pension credit.

7. Only 9% of claimaints are between 30-39. 19% between 40 - 49. 18% between 50 -59. 52% 60+

8. 62% of claimants were not in receipt of any disability benefits.

9. Interestingly, only 18% of SMI claimants have dependant children. Pretty surprising statistic. (not surprising if you look at the ages claiming, however, would have thought it was those with children struggling to keep up).


Enough stats for everyone?

julieq

Had time now to look in detail, and the first point is that the additional cost appears to be the cost of keeping a short (13 week) waiting period rather than 39 weeks, so the cost of SMI will be higher than £110M - which it should be. The shorter period is the concession brought in when the crisis hit and so it remains the case that the additional help to homeowners during the crisis is miniscule. I haven't been able to find anywhere a figure for the total cost of SMI, and the rules aren't really fully listed, but it's a substantial benefit paid to unemployed homeowners and so it has to be something around the same order of magnitude as housing benefit paid to renters.

SMI itself is capped at 3.6% of 200K annually, £600 a month, which as has been pointed out is considerably lower than housing benefit potentially like for like. There are rules about what benefits allow claiming, and interestingly it appears that pensioners on pension support can claim indefinitely, which is very peculiar and leads to some interesting potential loopholes. It's available for any loan used for purchase or improvement.

chucky

julieq wrote: »

I think the point was that on average capital isn't being repaid.

i can't believe the Orpheo and that dim Devon bloke think that SMI pays off the capital on peoples mortgages for them...

StevieJ

Graham_Devon wrote: »

.

3. SMI covers the initial mortgage AND any remortgaging taken out for making home improvements. that are necessary to maintain the fitness of the property for human habitation


Enough stats for everyone?

I have corrected that for you Dev

This is a convenient split one would have to ask how they know that.

2. AFTER the interest change, 50% of SMI recipients are receiving payments in excess of their interest rate. I.e. 50% of SMI recipients are getting their capital paid down on top of the interest.