SMI: More changes on the way

SecondLegDownIsTheBigOne

FTBFun wrote: »

You're obviously trolling though so there's little point arguing with you.

Obviously.

Graham_Devon

Heyman wrote: »

Do you think the system should only pay Housing Benefit for 6 months as well?

Housing benefit is a very different beast.

On another forum, totally unrelated to houses, and related to technology which I sometimes head to for tech help and inspiration, there was a discussion on SMI.

One poster had his mum and dad on SMI, on a 57k mortgage. They had spent quite a lot, and MEW'ed, and were now using the benefit system. All fine, you'd think. But it's not really, not when you see that person locked out of housing due to high costs. Same house would cost him 189k. Not the 40k it cost his parents. Yet they are appauled he can't get on the ladder.

His parents are getting their interest paid for, to keep them in that house, and when the mortgage is up, they will have had a helping hand from the state to keep their asset and service their payments on it. They will take the full 160k equity and pocket the lot (I realise they are not pocketing it per se, but you get the drift).

Housing benefit does not put that claimant in a better position at the end of claiming. SMI does. Politicians don't like this, and for good reason.

It may cost less than housing benefit, but that couple would not be entitled to housing benefit if they were forced to sell up. They are sitting on 140-160k cash. That would keep them renting for a LONG time. May sound awful, but we all have to adjust if we hit hard times....it can't JUST be the ones who don't have who are expected to adjust to having even less. No one will feel pity for their son who hasn't had a chance to buy having to rent. But his parents did have the chance, and they over extended themselves, so get rewarded.

12 months would be an adequate, and fair amount of time to give a helping hand, IMO.

The other point about SMI is it often excludes the self employed who don't have a regular income.

julieq

Oh here we go again.

SMI is a benefit paid for from tax as part of a package of social security. It doesn't cost a lot in absolute terms - £400M annually - and the average payment is less than £30 a week, which compares to average housing benefit of just over £80. And over half of the recipients are over 60. There is absolutely no evidence at all that it's a prop to the housing market, but what it does allow is for people to stay in their houses over a period of unemployment.

It does show the inherent nastiness of some of the bears that they want this perfectly reasonable benefit removed in the faint hope that that would get them a cheaper house. Actually it wouldn't even if that was the proposal: make people homeless and the effect is that simply that you push them into rented accomodation and you don't free up one single house. Someone just buys the house and rents it back to them (on a net basis).

The proposal doesn't do that though. It just puts a charge on the house which is payable out of the householder's estate when they die or when the householder wants to pay it, i.e. it's a deferred tax. It's hugely unlikely to be agreed anyway.

Graham_Devon

julieq wrote: »

It does show the inherent nastiness of some of the bears that they want this perfectly reasonable benefit removed in the faint hope that that would get them a cheaper house.

Yet no one has said that, and everyone has stated there should be a period of time. This is just your drempt up line to put weight on your own views. If you can vindicate another view, by whatever means neccesary, you feel it makes your view hold more weight.

After that period of time, there comes a point where you have to come to the conclusion that the house that the claimant is living in, is simply unaffordable for them.

Be lovely if we could all buy things and then when we figure out we can't keep up with the repayments, the government will sort you out.

Why not extend it to cars? Credit cards? Sofas?

People wouldn't be made homeless en masse. Many have equity built up, which they could use to service whatever they can afford to buy. If housing benefit is needed, so be it.

tomjonesrules

Graham_Devon wrote: »

Yet no one has said that, and everyone has stated there should be a period of time. This is just your drempt up line to put weight on your own views. If you can vindicate another view, by whatever means neccesary, you feel it makes your view hold more weight.

After that period of time, there comes a point where you have to come to the conclusion that the house that the claimant is living in, is simply unaffordable for them.

Be lovely if we could all buy things and then when we figure out we can't keep up with the repayments, the government will sort you out.

Why not extend it to cars? Credit cards? Sofas?

People wouldn't be made homeless en masse. Many have equity built up, which they could use to service whatever they can afford to buy. If housing benefit is needed, so be it.

Not everyone has equity in their property. The principle does not extend to cars, credit cards etc because they are not essential to a minimum standard of living.

If you had an individual claiming SMI of £200 a month with no equity in their property, why would you prefer to see them claim £400 in LHA?

Graham_Devon

tomjonesrules wrote: »

Not everyone has equity in their property. The principle does not extend to cars, credit cards etc because they are not essential to a minimum standard of living.

Eh? So by your example, having a mortgaged, owned home is essential to a minimum standard of living?

If you had an individual claiming SMI of £200 a month with no equity in their property, why would you prefer to see them claim £400 in LHA?

It's highly unlikely they will have no equity in their properties. If they don't have any equity at all, then they must have seriously overstretched within a very recent period....and also took a concious decision not to pay for insurance. This is another scenario being painted to add weight to the argument of keeping SMI.

tomjonesrules

Graham_Devon wrote: »

Eh? So by your example, having a mortgaged, owned home is essential to a minimum standard of living?

It's highly unlikely they will have no equity in their properties. If they don't have any equity at all, then they must have seriously overstretched within a very recent period....and also took a concious decision not to pay for insurance. This is another scenario being painted to add weight to the argument of keeping SMI.

Having a home is essential to a minimum standard of living. Of course, if the council can provide the claimant with alternative housing that would negate the problem. Please let us know when you find all this available housing!

I take it you have some facts to back up your assertion that it is highly unlikely that someone will have no equity in their property? No, I didn't think so.

Back to my original question, if you had an individual claiming SMI of £200 a month with no equity in their property, why would you prefer to see them claim £400 in LHA?

Graham_Devon

tomjonesrules wrote: »

Having a home is essential to a minimum standard of living. Of course, if the council can provide the claimant with alternative housing that would negate the problem. Please let us know when you find all this available housing!

Ok, let's take this a little further. If you believe it's essential, shouldn't the government be stumping up cash for all those locked out of owning a home due to high prices?

Or is it only the haves you feel this is essential for?

I take it you have some facts to back up your assertion that it is highly unlikely that someone will have no equity in their property? No, I didn't think so.

Well, the only fact I have is, that most people make a payment to their mortgage each month, and most people, if they own a home, will have seen equity built up over the last 10 years.

If they bought since say 2007, and have no equity, they must have taken out a high value loan, with little or no deposit, and took no insurance.

Back to my original question, if you had an individual claiming SMI of £200 a month with no equity in their property, why would you prefer to see them claim £400 in LHA?

Yes.

After 12 months.

tomjonesrules

Graham_Devon wrote: »

Ok, let's take this a little further. If you believe it's essential, shouldn't the government be stumping up cash for all those locked out of owning a home due to high prices?

Or is it only the haves you feel this is essential for?



Well, the only fact I have is, that most people make a payment to their mortgage each month, and most people, if they own a home, will have seen equity built up over the last 10 years.

If they bought since say 2007, and have no equity, they must have taken out a high value loan, with little or no deposit, and took no insurance.



Yes.

After 12 months.

The government should ensure everyone has a home. I did not say that everyone had to own a home. Reading things that are not there?

So everyone that bought a home from 2007 onwards may have no equity in their property. That's a fair number I guess, certainly far more than your assertion that it is 'highly unlikely' that someone would have no equity, yes?

You appear to have missed the 'why' in my question. Trouble with reading as well as offering logical reason? :rotfl:

Graham_Devon

tomjonesrules wrote: »

The government should ensure everyone has a home. I did not say that everyone had to own a home. Reading things that are not there?

So everyone that bought a home from 2007 onwards may have no equity in their property. That's a fair number I guess, certainly far more than your assertion that it is 'highly unlikely' that someone would have no equity, yes?

You appear to have missed the 'why' in my question. Trouble with reading as well as offering logical reason? :rotfl:

No, not everyone who bought a home from 2007 onwards would have no equity. Many will have paid some down, many will have had larger deposits, especially since 2007.

Everyone has the right to a home, yes. But it's not the right to have a mortgaged home, where the taxpayer will chip in to allow you to continue paying off your mortgage and therefore reaping the benefits.

As to why....precisely the reason above.

Also, I believe that if you simply carry on paying off the interest on peoples loans, its a disincentive to go and find work and actually pay for it yourself. It's also a disincentive to look at alternatives, when you can't actually afford the home you are in.

People stand up and take notice if they know they are going to lose their support after 12m. For those who can work, they will go find work. If they can't, or won't, then I'm afraid they shouldn't be on the same level as someone who can and does.

For those who are too old to work....firstly, how did this happen, and secondly, this group, should, really have much larger equity in their homes, as unless they have MEW'ed it all away (which is their own doing) or have taken out a mortgage at around 60 years of age (they'd have known full well they couldnt fund it)....it's hardly likely these people won't have equity.

So those retired can face the same choice all the rest of us face, and relocate to something they CAN afford. Those who can work, have 12m to find something. 2m is plenty. Plenty of immigrants find work within days.