Support for Mortgage Interest

ILW

HAMISH_MCTAVISH wrote: »

Where's the incentive for people to do the right thing and buy a house, thus planning for their housing needs in old age, if you'll lose it at the drop of a hat in the event you're made redundant or get ill?

I woud suggest that anyone who stands to lose their house "at the drop of a hat" has overextended themselves and should have saved a little for the possibility of short term unemployment etc.

Odd thing is that those who have done so are penalised.

HAMISH_MCTAVISH

Generali wrote: »

That assumes they would never work again.

Not really.

The average FTB is now in their 30's. Lets say they get made redundant at 40, and then get repossessed. They'll have very little left over from the sale (especially given the state of the market today), and almost certainly burn through it before claiming benefits.

By the time their credit clears up enough to get another mortgage they'll be pushing 50, and therefore unable to get a 25 year mortgage and so probably unable to afford to buy.

So they then claim ten grand plus a year in rent benefits for their 30 years in retirement.

And all because we wanted to save £50 a week for a few years now.

It's a daft proposition.

Emy1501

HAMISH_MCTAVISH wrote: »

Yes, I see the validity of that argument, but the same thing applies in reverse too.....

Where's the incentive for people to do the right thing and buy a house, thus planning for their housing needs in old age, if you'll lose it at the drop of a hat in the event you're made redundant or get ill?

As it stands, the government can either choose to pay very small amounts of SMI, or very large amounts of housing benefit to support people through their retirement after they inevitably spend down their lump sum and start claiming benefits.

Home ownership is not a must for everyone. There are insurance policies people can take out to cover themselves for redudancy etc. I can understand the policy of look after the ill but if someone is made redundant I suspect they will find a job after 12 months and support themselves if a safety net is not there.

nearlynew

It always amuses me when the "my property is my pension" brigade start complaining about having to downsize/use any equity they may have to support them in old age.

You really couldn't make this stuff up.

Graham_Devon

HAMISH_MCTAVISH wrote: »

But I think the more relevant point is that they would almost certainly never be able to own a house again.

Yes, because they CAN'T AFFORD IT.

How is that different to the swathes of others under the same umbrella? You seem to be singleing out these people as they were once homeowners as somewhat "special".

nearlynew

Graham_Devon wrote: »

Yes, because they CAN'T AFFORD IT.

I don't see you trumpeting government cash in terms of benefits to get renters out of rented and into mortgages.

Exactly.

In other words ...

People claiming SMI are in a similar position to those priced out of the market -

Neither group can afford to buy a house.

HAMISH_MCTAVISH

ILW wrote: »

should have saved a little for the possibility of short term unemployment etc..

We all pay for a safety net through high taxation. It's pretty much the only reason most people are willing to put up with some of the highest tax rates in the world.

There is no reason why we should discriminate against homeowners.... After all the state is more than happy to take their money when the going is good.

ILW

HAMISH_MCTAVISH wrote: »

We all pay for a safety net through high taxation. It's pretty much the only reason most people are willing to put up with some of the highest tax rates in the world.

There is no reason why we should discriminate against homeowners.... After all the state is more than happy to take their money when the going is good.

We seem happy to discriminate against those that have tried to cover themselves through savings or insurance.

HAMISH_MCTAVISH

Emy1501 wrote: »

There are insurance policies people can take out to cover themselves for redudancy etc.

Indeed there are.

But why should we pay twice?

We already pay some of the highest tax rates in the world which cover the social contract, that benefits will cover rent or SMI for those who lose their jobs.

Are you suggesting renters should also buy insurance, and be ineligible for rent support?

I can understand the policy of look after the ill but if someone is made redundant I suspect they will find a job after 12 months and support themselves if a safety net is not there.

If the jobs are there to be had, then whether or not we pay SMI will have little bearing on whether people get work or not.

At the moment there are 2.5 million unemployed and less than a half a million job vacancies, so I'd suggest SMI isn't the reason people aren't working.

HappyMJ

Emy1501 wrote: »

Why cant they downsize? We are living in tough times where cuts are being made evrywhere. As said why cant these people take out part time jobs or pay off these costs through their pensions etc.

People need to be accountable for their own problems rather than simply relying on the state. People who took out Endowments took on a gamble and they should not be relying on everyone to pay for their failed gamble.

Friend of mine did just that she sold her 3 bedroom house (with only her living in it) and still had £5,000 outstanding on the mortgage so paid of off with the proceeds. She then used the money she had to buy a half share in a lovely brand new 1 bedroom flat shared ownership property with central heating to the entire complex in supported housing which was worth more than her aged 3 bed terraced house with poor heating. She spent thousands furnishing it and now the government pay the other half of the rent for her. Perfect...costs the housing association and council about £60 a week or they could have paid just £3.50 per week to pay the interest on her mortgage.