Fiscal help for mortgage holders - is this a realistic possibility?

km0193

What are people's thoughts on this?

It would be highly controversial however it's looking so bleak that the Government may have to intervene. 

C225

I can't see the Government intervening with direct help, it has never done so in the past.  Only way it can help is to make choices to get inflation down and also show to the markets it's stable and that would limit how high the BoE have to raise interest rates. 

km0193

C225 said:

I can't see the Government intervening with direct help, it has never done so in the past.  Only way it can help is to make choices to get inflation down and also show to the markets it's stable and that would limit how high the BoE have to raise interest rates. 

I tend to agree, however there may not be a precedence for the current situation (when you consider the speed of the increase and how leveraged a country we are). I don't think anything can be ruled out at this stage. 

housebuyer143

More government borrowing and debt is likely to scare the markets and push rates up higher. I would be surprised if the government helps at all. 
This is why mortgages have been stressed a great deal above SVR. A lot might struggle, but most should probably make it through 

dander

I don't see any way the government could give direct help, even if it wanted to. It's not like energy prices or fuel where we are paying big chunks of tax on top of the payments. Even with energy they've resorted to throwing government money at us rather than interfering with the businesses themselves. So they're not going to try and force banks to lower interest rates - after all interest rates affect much more than just mortgages. Interest rates go up as well as down - that's just how it works, it's not really something extraordinary in that sense.
I look at how much help anyone with a mortgage gets from housing benefit as an indicator of government appetite for propping up homeowners in financial trouble. It's our problem, not theirs. 
Add in that mortgages are not something everyone has and not all mortgage owners will struggle, even those that will struggle have the property as an asset - they have an option to sell it if things are dire. People get homes repossessed all the time because they lose their job, divorce, manage money badly, why would the government help now when they didn't help these other people that were hit with unfortunate circumstances?

The_Unready

I don't recall getting any help (apart from MIRAS) when my mortgage was at more than 14% in the 1980s, so I doubt if the Tories are going to start now!

And there are only around 8 million mortgaged households in this country ( according to some figures I saw recently), so they're pretty much a minority of households.

brownbagsFTB

Yes! The big mortgage lenders are meeting with the chancellor today to discuss measures. This interest rate hike is disastrous for the housing market, loans are much higher now than in the 80’s so comparing percentages doesn’t really stack up. It’s about the ratio of income to mortgage payments and at high interest (>6%) it will be untenable for a lot of people, particularly first time buyers or those who have bought in the last few years on higher LTVs. The BoE base rate rises aren’t just governed by inflation, they have to strike a balance in rises to avoid a recession. It’s all so up in the air as it’s changing daily but I live in hope that the outcome won’t be as severe as we all think and that some sort of correction is on the way! 

propertyhunter

They won't do anything, and they shouldn't. A correction is part of the property cycle. People will need to really cut back on their spending to keep their house if they're on the edge. This will cause a long and deep recession that will cause inflation to fall back significantly with interest rates to follow (give it 2-3 years).

What really needs to come out of this mess is a realisation from the public that the conservatives have no idea what they are doing, and throw them out at the next opportunity. You could put a 10 year old in as prime minister these days and they wouldn't do half as bad a job as the current government. 

PK_London

Absolutely impossible. No government in the world can fiscally support - ie PAY YOUR MORTGAGE FOR YOU.

Too much cheap money was printed and the day of reckoning has come. There is plenty of information out there about forecasted rates. Do your research and buckle up!

Sea_Shell

My initial reaction is no!!   And nor should they.

But, TBH nothing would surprise me in the lengths government may go to to prop up the housing bubble.

Depends how "messy" it gets. ☹️


What's cheaper for them?   Subsidising mortgages or paying housing benefit for those who are repossessed with no equity (or other assets) to fall back on.

brownbagsFTB

I don’t think anyone’s expecting a hand out, although people have been given tax relief in the past when rates soared. This isn’t about the government rescuing individual homeowners from defaults and repossession, it’s a much wider economic issue. If people are spending 50% or more of their income on mortgage payments, they’re not spending elsewhere which is counterproductive to the government’s agenda for growth, can’t grow the economy if people haven’t got money to spend. It also has a knock on effect for landlords, most buy to let mortgages have been taken off the market. Where are all the people who lose their homes going to live if this rate spike continues? I think a lot of people can ride out high interest in the short term but the government needs a plan to ensure this doesn’t go on for years