They can't be.....can they?

theartfullodger

iammumtoone wrote: »

.......Via the rent money it is not only paying the interest but some/all of the capital as well. ...........

Pay off capital?? Nae, nae: Drink, mistress, toy-boy (or both..), pressies for the wife/hubbie/civil-partner, holiday, new car, eating out yes yes yes, pay off capital, nae, why would you?

seven-day-weekend

iammumtoone wrote: »

So why not make rent paid by the government a loan as well?

The interest only does just that enables someone to keep the roof over their head without the bank repossessing it. It does not pay anything toward the house itself (capital).

I understand that, but someone renting will never have the equity to repay a loan.

Also, what is to stop someone on SMI having their interest paid, then when the term is finished, selling their home at a profit, paying off the capital and getting a lump sum? I'm sure that's not just keeping a roof over someone's head!!

I speak as someone who has never claimed either of these Benefits but have paid off a couple of mortgages.

Red-Squirrel_2

Thrugelmir wrote: »

By virtue of owning a house the majority of people are still benefitting from an increase in capital values. Switching to a loan system seems far more equitable.

Most people only see any benefit from house price increases when they sell and downsize, if they ever do.

As I said before, for the vast majority their home is their home, not an investment. They buy rather than rent so that they will have security in retirement and not have to pay rent after they have finished working.

Take two ordinary people who work in the same job, as teachers or plumbers or in Tesco for example. One rents a 2 bed terrace, one owns the 2 bed terrace next door which is exactly the same.

If they are really unlucky and both get diagnosed with say, bowel cancer, on the same day and both need to stop work for some time to undergo surgery, then radiotherapy or chemotherapy, then after maybe 9 months or a year can only return to work part time due to having to manage things like multiple stoma bags and IV feeding 12 hours a day. One will get their rent paid for as long as they need. The other will have to take out a loan from the government in order to be able to keep the roof over their head. A loan where the terms could change at any time and they have no choice over what T&Cs to accept.

Does that seem right to you? It doesn't to me. I don't think people should be getting their full mortgage payments covered but the interest is equivalent to rent and paying it prevents them losing their home and needing to claim even more benefits at greater cost!

Red-Squirrel_2

seven-day-weekend wrote: »

I understand that, but someone renting will never have the equity to repay a loan.

Also, what is to stop someone on SMI having their interest paid, then when the term is finished, selling their home at a profit, paying off the capital and getting a lump sum? I'm sure that's not just keeping a roof over someone's head!!

Where would they live after they've sold their home and had to use the equity to pay back the loan? What if there isn't any profit?

seven-day-weekend

Red-Squirrel wrote: »

Where would they live after they've sold their home and had to use the equity to pay back the loan? What if there isn't any profit?

They may even have enough equity to buy a cheaper home outright, or at least for a deposit, depending on how long they have owned their house and the value of it, or they may chose to rent or go and live with relatives or in a retirement home.

If there is no profit, they won't be able to pay it back anyway, will they?

iammumtoone

seven-day-weekend wrote: »

Also, what is to stop someone on SMI having their interest paid, then when the term is finished, selling their home at a profit, paying off the capital and getting a lump sum? I'm sure that's not just keeping a roof over someone's head!!

That would never have happened as when it was paid it was only paid for a year for the unemployed. That seems reasonable as a year (on top of the six months you had to wait to qualify for it) gave people plenty of time to find another job/alternative arrangements. I believe if you went onto ESA the terms were different, there wasn't a time limit on that.

If it was paid indefinitely you would have a point but a year of breathing space of interest being paid people aren't going to profit much from that, just have the chance to hold onto their home.

Thrugelmir

Red-Squirrel wrote: »

Most people only see any benefit from house price increases when they sell and downsize, if they ever do.

As I said before, for the vast majority their home is their home, not an investment. They buy rather than rent so that they will have security in retirement and not have to pay rent after they have finished working.

Take two ordinary people who work in the same job, as teachers or plumbers or in Tesco for example. One rents a 2 bed terrace, one owns the 2 bed terrace next door which is exactly the same.

If they are really unlucky and both get diagnosed with say, bowel cancer, on the same day and both need to stop work for some time to undergo surgery, then radiotherapy or chemotherapy, then after maybe 9 months or a year can only return to work part time due to having to manage things like multiple stoma bags and IV feeding 12 hours a day. One will get their rent paid for as long as they need. The other will have to take out a loan from the government in order to be able to keep the roof over their head. A loan where the terms could change at any time and they have no choice over what T&Cs to accept.

Does that seem right to you? It doesn't to me. I don't think people should be getting their full mortgage payments covered but the interest is equivalent to rent and paying it prevents them losing their home and needing to claim even more benefits at greater cost!

Not the forum for a political discussion.

seven-day-weekend

iammumtoone wrote: »

That would never have happened as when it was paid it was only paid for a year for the unemployed. That seems reasonable as a year (on top of the six months you had to wait to qualify for it) gave people plenty of time to find another job/alternative arrangements. I believe if you went onto ESA the terms were different, there wasn't a time limit on that.

If it was paid indefinitely you would would have a point but a year of breathing space of interest being pay people aren't going to profit much from that.

At one time it WAS paid indefinitely.

Red-Squirrel_2

Thrugelmir wrote: »

Not the forum for a political discussion.

:rotfl::rotfl::rotfl:

You commented upthread, does it only become the wrong forum when you don't like the points being made?

iammumtoone

seven-day-weekend wrote: »

At one time it WAS paid indefinitely.

I didn't realise that and it was the right decision to stop that for the unemployed (not the sick).

But this time they have gone too far.