to think that that state should pay people's mortgage payments if their circumstances change and they lose their income?

(111 Posts)
FlouncingMintyy Fri 22-Feb-13 20:50:57

Am I right in thinking that this doesn't happen at the moment and that housing benefit only covers rent?

Northey Fri 22-Feb-13 20:53:16

You can get help to pay the interest. But not to make capital repayments.

HecateWhoopass Fri 22-Feb-13 20:54:09

no. You can get the interest paid on your mortgage.

They won't pay the capital though, which is fair enough.

info here

CloudsAndTrees Fri 22-Feb-13 20:54:55

I think you can get housing benefit to cover your mortgage interest only. It only last a year or two though, I can't remember.

I'm not sure that the state should cover the whole mortage payment, but I do think it should pay more than the interest. It would be fairer if it were paid at the same amount that anyone renting could get, so based on average rent and the number of people being housed in that home.

TidyDancer Fri 22-Feb-13 20:55:26

I agree with the current system. In this respect, the interest can be treated as rent, IYSWIM.

YABU & wrong

sooperdooper Fri 22-Feb-13 20:56:01

Is paying the interest enough to not get your house repossessed?

FlouncingMintyy Fri 22-Feb-13 20:56:12

Why do so many people get repossessed then? I am just thinking about the housing shortage and the lack of affordable social housing and what can be done about it.

Dannilion Fri 22-Feb-13 20:56:58


Northey Fri 22-Feb-13 20:58:07

Possibly their lenders haven't been willing to switch the to an interest only mortgage, or the time period in which SMI can be paid ha come to an end?

Dawndonna Fri 22-Feb-13 20:58:41

People get repossed because what is available doesn't cover the mortgage, as with rent, there is often a shortfall to make up. If the owners of the property can't meet a reasonable percentage of the shortfall, then the bank will repossess.

KirstyJC Fri 22-Feb-13 20:59:02

It does seem unfair that you can get help with rent but not mortgage, but then I can also see why the capital repayments shouldn't be met - otherwise you would end up owning a house that the state had paid for! Nice work if you can get it....

At the same time though, our mortgage is a lot less than we would be paying if we rented, even a smaller property, so it does seem a bit odd that if we were broke and couldn't afford to pay the mortgage, we would need to sell the house and rent a place that cost more and then get help with that, instead of staying put and getting help mortgage repayments that would cost the state less.

Still, hopefully it won't happen!

HollyBerryBush Fri 22-Feb-13 21:00:50

You can take an insurance policy out that covers sickness and redundancy.

The state isnt there to pay everything.

RandomMess Fri 22-Feb-13 21:01:02

I think the government should pay on a loan basis, they pay the mortgage (to a maximum amount etc) but you owe them that money back IYSWIM, effectively they buy a share in your house.

FlouncingMintyy Fri 22-Feb-13 21:04:28

Yes, Kirsty, that is really my point. An awful lot of mortgages are a great deal cheaper than the rent would be on a home large enough to house them all. So if you get repossessed and then go into rented accommodation the state pays more to house you and 9 times out of 10 that rent is being paid to a private landlord who is indeed paying off his mortgage (or one of his many mortgages) with state money.

Seems very wrong and skewed to a simpleton like me.

sooperdooper Fri 22-Feb-13 21:05:07

Why should someone with a mortgage have to take out insurance against loss of earnings when someone paying rent doesn't have to because they will get housing benefit? It makes no sense, if houses get repossessed because people can't pay their mortgages then it just puts more pressure on rented/council owned housing, so it would make more sense to try and help people remain in the homes they have

KirstyJC Fri 22-Feb-13 21:07:49

I like Random's idea - kind of like they did with the banks?! We (as taxpayers) would all become shareholders in each others' houses!

Could we have some sort of veto on decoration then - like a zero-tolerance policy on twigs and pebbly shit? <gratuitously derails thread>

HollyBerryBush Fri 22-Feb-13 21:11:35

Do you not thing#k, if the y state picked up the bill for a mortgage, and the occupier then owned the hosue - that there would be an awful lot of people who managed to make themselves unemployed one way or another, knowing the state was goign to pay off their asset?

This is why we have redundancy/sickness mortgage protection policies.

It was bad enough selling off the council houses for a song to people on peppercorn rents withou producing another wave of them.

someoftheabove Fri 22-Feb-13 21:11:56

Can you really get pebbly shit? Doesn't it like, smell bad?

CloudsAndTrees Fri 22-Feb-13 21:12:17

It does seem unfair that some people are entitled to a lot of help from the state and some are entitled to next to nothing, even when they have paid in and they genuinely need it.

Personally, I think that YANBU.

It might seem unfair to pay off captial but, as a previous poster mentioned, no more unfair than HB paying off a landlord's mortgage. I'm sure that in most cases it would be more cost effective in the long run: removes an extra demand on public housing, cheaper than B&Bs, in many cases cheaper than private rental, fixed address and no uncertainty so better for applying for new jobs, no need for children to move schools, etc, etc. So long as the payment was at the same rate as HB for an equivalent rented house then it wouldn't really matter to the government if any capital was paid off if the mortgage was less than rent on an equivalent house. If you get my drift.

sooperdooper Fri 22-Feb-13 21:14:42

I don't think the government should pay off people's mortgages by any means, but I do think that people should get more help so they don't lose their homes, like people who rent do

LatteLady Fri 22-Feb-13 21:14:58

As someone who has been through this...and almost lost my house, due to not understanding how the system works, I can confirm the following. Your interest payments on your mortgage will be paid, but not until you have been out of work for three months... so if you manage to get a temp role, you go back the beginning again.

It is very scary, especially when you have worked all your life and there is only you to deal with it.

Actually, just another thought. Since people who own their homes may have to sell them to pay for care in their old age - which I know is another thread - it may be even more cost effective for the government to allow HB to pay mortgages as in plenty of cases they'd be getting the money back eventually anyway!

FlouncingMintyy Fri 22-Feb-13 21:17:57

Housing benefit is just one benefit. If all that is happening is that you are getting a stay of execution on being repossessed but are having to live on benefits otherwise, I think the vast majority of people with mortgages would be motivated to find a job that pays a lot more than benefits.

gaelicsheep Fri 22-Feb-13 21:19:15

I think they should pay whatever is sufficient to prevent repossession. If that's the interest, so be it. If more is required they should pay more. It is in nobody's interests to have more homeless families, especially if all they need is some breathing space for a few months until they manage to start earning again.

Talkinpeace Fri 22-Feb-13 21:21:19

you know all those dodgy PPI policies that the banks sold on the basis that they would never cough up ....

back in 1987, DH and I had one. He lost his job and while we fought through the courts, the policy paid the mortgage (cap + int) in full for seven months.
Oddly enough the rules changed the week after our claim ceased!!

True Flouncy, even with HB towards mortgage it would still be a huge struggle and a major incentive to get a new job asap. Threfore, realistically, it would just remove the immediate risk of repossession, but it would allow the person to concentrate and put all of their efforts into getting a new job rather than stressing about the possibility of losing their home!

nancy75 Fri 22-Feb-13 21:22:08

I think housing benefit should be paid if the person rents or has a mortgage, for example in my area the cap is £800 for a 2 bed, so if you lose your job you should get up to the £800 if you are renting or an owner occupier. If the £800 doesn't cover the mortgage the owner would have to find the rest, as with rented accommodation.

Mimishimi Fri 22-Feb-13 21:22:38

YABU, get mortgage insurance.

sooperdooper Fri 22-Feb-13 21:22:40

Flouncingminty, I'm not sure I understand you, why would people with mortgages be more inclined to find a job paying more than benefits than anyone else? Surely everyone would be better off in that situation if it's available

sooperdooper Fri 22-Feb-13 21:23:51

As I said before, why should someone paying a mortgage pay insurance when someone paying rent doesn't have to?

NotDavidTennant Fri 22-Feb-13 21:28:19

"I don't think the government should pay off people's mortgages by any means, but I do think that people should get more help so they don't lose their homes, like people who rent do"

People who rent don't just automatically get to keep their homes though. God forbid we should end up in this situation, but I've checked and we wouldn't get much more than half our current rent in housing benefit.

So this idea that renters will just get everything paid for them and won't be forced out of their home is a bit inaccurate.

CloudsAndTrees Fri 22-Feb-13 21:35:39

Renters don't get everything paid for them all the time, but in many cases HB covers full rent. There is no good reason why people in need who have a mortgage shouldn't be paid the same amount of LHA they would get if they were renting. It takes into account income, and the number of people needing housing.

As things are changing, people won't get money to pay for rooms they don't need, and I think it would be fair enough for that to apply to mortage owning applicants too.

I agree that people paying a mortgage shouldn't have to pay insurance when renters don't have to.

There is too much division in the way benefits are paid at the moment, and it's very unfair.

ReallyTired Fri 22-Feb-13 21:48:48

I think that helping home owners in the short term makes financial sense. It is very expensive to the state if a family gets repocessed and needs to be re housed or put up in B and B. However there needs to be a cap on what is paid and it needs to be for a limited time.

I like the idea of a loan. Prehaps paying off the mortage of an unemployed person is a relatively cheap way of increasing council housing stock if the person does not get a job within two years.

Prehaps there could be the risk of being forced to move into a council property in a cheaper area or a smaller property if you have extra rooms after a couple of years. Otherwise people would end up taking the piss of having Jo taxpayer paying for their lovely four bed detached house when they have one child.

Talkinpeace Fri 22-Feb-13 21:51:24

in the USA, mortgage interest is a tax deductible expense, no matter how many houses you own, how rich you are or how stupid the mortgage ratio is

the uk system is a beacon of sanity by comparison

stargirl1701 Fri 22-Feb-13 21:57:23

I think it should return to being based on NI contributions. A worker who has paid full NI for 30 years should be entitled to our full support if they lose their job. Someone who has no record of NI contributions should receive far less support than worker A.

I would exempt disability benefits from this though.

<prepares to be flamed>

Talkinpeace Fri 22-Feb-13 22:00:39

I think it should return to being based on NI contributions
it never was ....
MIRAS had nothing to do with NI - DH and I got it straight out of University
and housing benefit used to be given to university students during the short holidays

not flamed - just talking bilge

stargirl1701 Fri 22-Feb-13 22:02:11

Ah well. It should be based on contributions then!

I thought that was how the welfare state was set up by Bevin in the late 1940s.

Talkinpeace Fri 22-Feb-13 22:03:21

so nobody under 50 gets any help?

stargirl1701 Fri 22-Feb-13 22:04:58

You get help on a sliding scale. A person with 5 years contributions gets less help than a person with 30.

Talkinpeace Fri 22-Feb-13 22:07:10

so a person who just bought their house is stuffed, but a person who bought theirs 20 years before and has savings gets help ....

stargirl1701 Fri 22-Feb-13 22:13:30

No, a person, say 25 who just bought a house (obviously not now grin) would get their mortgage interest paid but a person, say 60 who has a full contributions record, would get capital & interest help.

It would reflect the years of paying into a system like National Insurance.

Tbh, it's all pie in the bloody sky. The country can't afford the welfare bill we've got now!

Talkinpeace Fri 22-Feb-13 22:20:39

what about housewives who never pay in - should they get nothing back ?

WhitesandsofLuskentyre Fri 22-Feb-13 22:27:23

We were in this situation last year (DP out of work for 6 months with cancer). They paid 3 months' interest (we had to cope for the first three) so I am now up to my eyeballs in debt because the shortfall had to go on a credit card. Well, that, and having to make up the shortfall between the £500 a week DP WAS earning (and then lost, being self-employed), and the £71 per week ESA he was awarded. So I've taken out insurance for me, now! Wish to god I knew how people managed on benefits...

thekidsrule Fri 22-Feb-13 23:11:52


i have been in the position of the DWP paying my interest only on the morgage,i had to top up and obviously you incur more expense in a morgaged property rather than renting

many in this position really struggle

makes no sense the current rules

stargirl1701 Fri 22-Feb-13 23:29:13

Anyone claiming Child Benefit gets credits. A 'housewife' without children isn't going to be entitled to anything but, I would imagine, her husband must be a high earner and it would be him who pays the mortgage.

midastouch Sat 23-Feb-13 00:11:40

I believe they pay the interest? I think its right to stay that way, otherwise it doesnt give much incentive to find another job does it? The govermnet would basically be buying you a house?!

midastouch Sat 23-Feb-13 00:14:10

Renting costs more a month than a morgage, so you should pay insurance, surely its your decision and a chance you are willing to take like buying anything with credit? That you cannot guarantee your income for the next 40 years

GregBishopsBottomBitch Sat 23-Feb-13 00:14:53

I know a woman who has 500 pound of her mortgage paid, she has to pay the other 600.

CloudsAndTrees Sat 23-Feb-13 00:21:03

Of course there's still an incentive to find another job! hmm

Unlike renters, mortgage owners still have to find the money to do essential house repairs and maintenance, and pay the costs when their plumbing or electrics or boiler breaks down.

They would only have to be given the same amount as renters will get in HB, so the government wouldn't end up paying for their spare rooms, they would be paying for the number of people living in that house to have a roof over their heads. The same as renters on a low enough income get.

Southwest Sat 23-Feb-13 00:23:23



Not nearly as many repossessions as there 'should' be for the level of debt ability to repay etc etc.

have you tried 'telling' the bank what you can pay, I have several 'clients' who have done that recently and it has been accepted by the bank. shock

I would assume the bank is expecting to keep the house though!

Southwest Sat 23-Feb-13 00:25:13


BTL is tax deductible shock

ReturnOfEmeraldGreen Sat 23-Feb-13 00:25:49

We do have money. The Olympics cost £11bn. There is money for Trident. There is even money for the odious Eric Pickles' weird bin fetishes.

foslady Sat 23-Feb-13 00:29:02

I can see both sides. The state shouldn't have to pay for me to own my house, BUT again, my mortgage is cheaper than rent. Also, if I was to rent, it would most likely be (initially) private. With so many private rents being on buy to let mortgages, the HB would be used to pay a mortgage, albeit not mine.....which would really get my goat......

CloudsAndTrees Sat 23-Feb-13 00:32:41

The Olympics was paid for with borrowed money, trident is paid for with borrowed money, all of it is paid for with borrowed money.

Saying we have money is like me getting a mortgage for a luxury castle on my TAs wage and then saying I'm rich.

We really don't have money! But if we are going to give money we don't have to some individuals that need it, we should give to all individuals that need it.

rhondajean Sat 23-Feb-13 00:35:16

I'll give you an example. My repayment mortgage for my three/four bed house is a full £240 less than the rent on a two bed flat in my estate. Because I have so much equity.

So where's the logic, if I was to lose my job, in forcing me out of my home into a smaller one and having the state pay more?

RedHotRudieParts Sat 23-Feb-13 00:46:46

Yanbu, it should be paid but as a loan which is repaid.

Mind you I also think housing benefit should be repaid or a percentage at least.

aufaniae Sat 23-Feb-13 01:32:18

The help available to mortgage payers is being eroded.

IIRC, currently you can get help with the mortgage (interest only) after a waiting period. It was called SMI.

Before this government, the rules were:

- a waiting period of 13 weeks before you could claim (this was brought down in 2009, to help people, as the recession brought the inevitable repossessions.

- a 2 year limit on payments, with exemptions for pensioners, households with children and the long-term sick, who could get it indefinitely

- The capital limit (the size of the mortgage that can have payments claimed against it) set at £200,000


The changes

The government is planning on the following changes:

- Upping the waiting period to 9 months before people can get any help with the mortgage (by which time many will have been repossessed).

- Reducing the capital limit: halved from £200,000 to £100,000.

- Extending the two year limit to include those with children or those who have been moved from disability benefits to job seekers allowance.

- The government is considering making payments recoverable, should the householder die or sell the property.
"The new death tax will see these payments recovered when the claimants dies. The consultation document even reveals that the Government is considering making all repayments recoverable on death."

A government document on SMI reform says "“This is based on the principle that it is reasonable to expect owner occupiers to make some provision, whether by insurance or savings, to fund their housing costs for a period in the event of a change in their circumstances such as unemployment or sickness.”

This isn't about getting us out of a financial hole, btw; this is ideological, it's about eroding the welfare state.

Bearing in mind we're in the deepest recession for decades this will lead to homelessness for many, and is certainly not aimed at helping the public during difficult times.

More info here

sashh Sat 23-Feb-13 05:39:11

You used to.

In the 1980s this was changed.

I was in Lancashire at the time. People were literally moving next door from the house they were buying with a mortgage to a rented house because HB would pay the rent.

Then the landlord put the rent up, and HB still paid.

It was crazy at the time.

I think it should pay an amount whether rent or HB, but when you are back in work I think mortgage payments should be paid back. Or when you sell the house the amount of benefit should be paid back then.

Want2bSupermum Sat 23-Feb-13 05:59:29

Talkin The reason that mortgage interest is tax deductible here in the US is to put homeowners on an equal footing with landlords. At the state level, NJ at least allows those renting to deduct their rental costs if they earn less than $100K.

Want2bSupermum Sat 23-Feb-13 06:06:51

Talkin The limit on the amount of interest you can deduct is on a mortgage up to $1M. In addition, if you are paying AMT you can't deduct interest paid for a home equity loan if the proceeds were not used to improve your home.

Lueji Sat 23-Feb-13 07:11:17

That's what insurance is for.
Not the job of the state to protect your assets.

It would only work if it was loan or the state bought the house and became the landlord.

RandomMess Sat 23-Feb-13 08:38:47

Insurance is a huge problem though for civil servants.

Our original terms were 3 years salary if we were made redundant (so who the hell bought insurance) they have now changed the terms and we're all redundancy risk and therefore can't get insurance.

BigAudioDynamite Sat 23-Feb-13 08:50:42

I was nearly in a position where I could pay the mortgage, a short while back. It got me thinking about this mortgage monthly payments are approx £300 less than what I would pay to rent in our area. So if I failed to pay mortgage, got reposseseed and had to move into get housing benefit to cover £4000 more a year. Plus the government would still be paying someone's mortgage; just the landlords and not mine

You can't claim the interest payment help, if you are working

aufaniae Sat 23-Feb-13 09:01:58

"That's what insurance is for.
Not the job of the state to protect your assets"

Luiji have you never heard of National Insurance?

The point of us all paying tax and National Insurance is that we will all get much better protection, and society will be better as a whole if everyone pays into a big pot and and is well protected if the worst happens.

If we go for a system where everyone must pay their own insurance privately, then many people will find they don't have the cover they they thought they did in a time of crisis.

Many will also take the risk of not having insurance (perhaps as they can't afford it) and will also find themselves in trouble. What happens to these people? If they end up homeless then either the state must look after them in emergency accommodation (which costs vastly more than someone's mortgage interest) pr not, which means families living on the streets. Do you want to live in a society like that?

Even those who do have cover will most likely find that the cover they got through the state insurance scheme was a better deal than they get through the insurance companies.

So, remind me, what is the point of moving this system of insurance in time of need to private insurance? Who does it benefit? Not individuals who need help, nor wider society. Oh, it benefits big business though (insurance companies). It makes no sense at all! It would be a massive backwards step for us all.

If you have a problem with the government protecting people's assets, then how about a program of building council housing? It'd be an investment for the tax payer, as well managed council properties make money for all of us. And then in times of crisis, the government will be protecting state assets rather than individuals'. Does that appeal? If not, why not? It makes financial sense after all.

sooperdooper Sat 23-Feb-13 09:02:06

The 'get insurance' argument makes no sense, for example my mortgage is less than the same rent would be for a similar property, if I lost my income I wouldnt get help but for example someone next door paying rent in a similar house would get HB of a greater value than my mortgage

If we've both up to the point of being out of work paid our tax/NI why should one be paid by the state indefinetly whilst the other gets no help whatsoever? If it got to the point where the government had paid off more of the mortgage then they would own it, not me, or the idea of it paid as a loan is fair - I don't expect them to pay off the capital so I can own it but they are more inclined to support those who rent

I do actually have insurance, but it annoys me that it's necessary

BigAudioDynamite Sat 23-Feb-13 09:10:38

Insurance doesn't cover a lot of scenarios, that leave a person unable to pay a mortgage temporarily

RandomMess - I think the government should pay on a loan basis, they pay the mortgage (to a maximum amount etc) but you owe them that money back IYSWIM, effectively they buy a share in your house.

This is an excellent idea. It would be massively cheaper, would avoid the state basically paying for private landlords' assets, would reduce homelessness and would increase the social housing stock. Now you've said it, it seems bleeding obvious! Has it ever been suggested or debated in parliament, does anybody know?

acceptableinthe80s Sat 23-Feb-13 09:35:22

Owning a property is not a neccessity, having a roof over your head is.
Buying a property is a choice, no one needs to own a property but everyone needs somewhere to live.
Anyone taking on a loan of 100K+ would be very silly not to take out adequate insurance to cover payments in the event of illness/unemployment.

The only people to blame for the Housing benefit fiasco is the goverment. They are the ones who sold off the affordable social housing in the first place leaving low income families no choice but to rent privately.
They are the ones who have failed to provide affordable housing for low income families therefore increasing the housing benefit bill and lining landlords pockets.

HecateWhoopass Sat 23-Feb-13 09:47:48

I was thinking about this last night and thought what if people in trouble found someone else who is in serious trouble, and swapped houses - ie renting off each other - and both claimed HB, which then covered their respective mortgage payments.

Is that an ok thing to do or morally wrong?

BigAudioDynamite Sat 23-Feb-13 09:47:56

But if a person already has a home, why make them give that up and put a different tips over their head....and then pay the landlords mortgage for them?

I like the part ownership idea, especially if a mortgage is cheaper than rent. That seems like a winner for both sides.

acceptableinthe80s Sat 23-Feb-13 10:11:42

I do see your point bigaudio however there a million different reasons why someone may find themselves unable to keep up with their mortgage repayments.
Illness and unemployment are insurable against at a cost of course.
But in many cases it's because people have spent outwith their means in the first place (or have been caught out in the property boom/crash). It wasn't that long ago everyone was encouraged to take out mortgages up to five times their annual salary and many people did, a slight increase in interest rates was often enough to create the scenario whereby they can no longer afford the repayments.
Many people who lose their jobs etc have crippling personal debts, should the goverment pay those too? A loan is a loan whatever the purpose of it and the person taking on the loan is responsible for repaying it, no one else.

BigAudioDynamite Sat 23-Feb-13 10:19:29

And I see your point is a conundrum!

sooperdooper Sat 23-Feb-13 11:55:07

Housing benefit paid to a private landlord is paying off their mortgage, why is that seen as ok but helping someone keep their own home isn't?

MrsLyman Sat 23-Feb-13 14:54:07

But repossessions aren't just a case of person loses job can't pay mortgage scenarios. I'm sure I read somewhere that most repossessions are due to defaults on second mortgages/ equity release or secured loans.

CogitoErgoSometimes Sat 23-Feb-13 15:06:25

YABU.... a person who owns even part of a property has a realisable asset. If they can't keep up the mortgage payments after any period of state help has expired they can sell the asset. Any lump sump generated means they wouldn't necessarily automatically qualify for HB in a rented property straight away.

Lending behaviour has changed. Lenders want at least a 10% deposit now, much greater proof of income and look more carefully into existing financial commitments than they did in the recent past. Even if mortgage-holders get into difficulty, they are more likely to offer some rescheduling of terms rather than go straight to repossession.

expatinscotland Sat 23-Feb-13 15:09:24

'As I said before, why should someone paying a mortgage pay insurance when someone paying rent doesn't have to? '

Because they are protecting their asset. Their home is their asset. They pay the loan and the home belongs to them.

The renter's home is not their asset, it is the landlord's.

foslady Sat 23-Feb-13 15:24:06

yy sooperdooper - that is EXACTLY my view.

expatinscotland Sat 23-Feb-13 15:28:21

'Housing benefit paid to a private landlord is paying off their mortgage, why is that seen as ok but helping someone keep their own home isn't?'

Because government favours BTL landlords.

HappyMummyOfOne Sat 23-Feb-13 15:45:33

Whilst people should protect their own assets with insurance etc, it is very unfair that those who work and only claim welfare when actually needed rather than as a choice are penalised.

There are lots of changes that need to be made to make things equal for all. If mortgage help can only be claimed for 12 months then so should HB. If maternity pay is 9 months than IS should be only for the same set period.

Far more benefits should be contributions based, it is very unfair that the workers who put the money into the pot get very limited help when thousands never work a day and yet we fund their homes, their spending andthe number of children they bring into the world.

In lots of cases, mortgage payments are less than rent as people can only mortgage what their income allows unlike those on HB who can rent what they like.

expatinscotland Sat 23-Feb-13 15:58:00

'In lots of cases, mortgage payments are less than rent as people can only mortgage what their income allows unlike those on HB who can rent what they like.'

No, they can't! They are subject to LHA caps and have to find a LL who will take HB at all.

And, just an FYI, 80% of those who claim LHA/HB are working.

RedHelenB Sat 23-Feb-13 16:14:30

i doubt I would get insurance as not in a permanent job.

sooperdooper Sat 23-Feb-13 16:18:50

The renter's home is not their asset, it is the landlord's.

Ok, but it's still somebody's mortgage, so if I lose my job, I'm better off moving out of my house and renting it to someone who can get HB to pay the mortgage!!

CogitoErgoSometimes Sat 23-Feb-13 16:21:42

"'Housing benefit paid to a private landlord is paying off their mortgage, why is that seen as ok but helping someone keep their own home isn't?'"

That's not an argument. Most business rely on loans to operate. Housing Associations, builders and, in the case of a private landlord, the money borrowed is in the form of a mortgage. If the state is prepared to finance rental and there isn't enough public housing to go around, private landlords will receive some of that money.

Sarahplane Sat 23-Feb-13 16:53:06

It is a ridiculous situation whereby a btl landlord can buy a run down 4 bedroom ex council flat for £65,000 and then charge £1200 a month in rent paid by housing benefit. so not only is hb paying the landlord's mortgage but a huge profit on top. times this by ten properties and there is a lot of money to be made by being a slum landlord. At the same time this means cheaper properties are often snapped up by landlords stopping families from buying them and pushing the prices up.

Maybe we need to move away from the idea that a home is an asset rather than somewhere to live. Everybody needs somewhere to live. If someone is in rented accommodation and potentially claiming hb for up to 70 years surely paying for a home owners mortgage for a short period is far cheaper. In fact even 25 years of mortgage payments is cheaper than 70 years of rent. I'm not suggesting the full term of someone's mortgage should be paid but in cases where someone is permanently unable to work due to serious disability for example it would surely be cheaper.

As it is, the only people the current situation suits are private landlords.

This problem has been definitely been caused by selling off council housing and the government favouring btl landlords.

Orwellian Sat 23-Feb-13 17:48:40

If you are a landlord and you are renting to someone claiming LHA, then yes, the state will pay off your mortgage for you. That is why BTL has exploded. Free house after 25 years, courtesy of the taxpayer (who probably can't afford to buy one him/herself).

Southwest Sat 23-Feb-13 21:32:05

SO I've said all along what we need is for fiscal policy to stop favouring BTL TBH I dont really care how its done it just needs to be done.

Repossess everyone's spare houses on retirement
Tax income pre deductions
Land taxes
Portfolio taxes
get rid of all the expense dross

the moment 'they' accept the current situation is not in societys best interest is the moment we actually swing the balance a tiny way back in favour of the future!!!

IMHO grin

Talkinpeace Sat 23-Feb-13 21:48:18

The trouble is that BTL is a business
(Schedule A registered self employment with HMRC or Ltd Co)
and there is a long standing international principle that interest on debt is a tax deductible expense.
To change that for BTL landlords without significant repurcussions would be impossible.

the fact that I am not alone among accountants in believing that loan interest deductions should be limited generally is another matter

Southwest Sat 23-Feb-13 22:00:53

But we need to stop viewing it as a business, its not a business, its people dabbling in somethnig they shouldnt, badly and usually for the wrong reasons, against the interest of society and to a tiny and in a very basic way.

they are not creating jobs and manufacturing things not even really providing a service the way most people would see it (even the inland revenue and courts according to recent judgments I think Im right about that?)

significant repercussions is exactly what I'm advocating!!

Talkinpeace Sat 23-Feb-13 22:14:29

HMRC treat them as businesses so long as they pay taxes on their profits
and have the mortgages correctly registered with lenders
and some landlords - like the Duke of Westminster - have tens of thousands of properties and are most certainly businesses
where does one draw the line?

FlouncingMintyy Sat 23-Feb-13 22:17:12

I think a lot of people haven't really thought through the reality of housing in Britain today. The sale of council housing, the btl boom, second and more home ownership and ridiculous pay in the city has caused untold problems with affordability in housing across the board.

It seems insane that if we lost our income my family and I could be re-housed in a very cheap rental property costing £1500 per month, when the interest on our mortgage is less than £800.

Talkinpeace Sat 23-Feb-13 22:18:11

House down the road from me is rented out at £1300 a month.
My mortgage is £200 .... my house is bigger

AllDirections Sat 23-Feb-13 22:26:37

Interesting idea Hec Not sure if it would be allowed though

I have a 0 hours contract so I can't get insurance.

Southwest Sat 23-Feb-13 23:03:09


starting the discussion around 1 adult 1 house seems to me to be a reasonable point.

Im open to any other views

Does HMRC have a clue what mortgage agreement you have with your lender?

Talkinpeace Sat 23-Feb-13 23:07:45

HMRC and the DWP have permission to check every mortgage against Land Registry and lender records if they suspect that a house is being let out for taxable gain.
BTL mortgages are dearer than normal ones so lenders will ALWAYS cooperate.

I had one of the very, very first BTL mortgages - in 1996
but it was a joint mortgage with DH so would fall at your first hurdle ....
and the mortgage was on a house I'd owned for many years, I just changed its status

there is no black and white, only shades of grey - that is what I took my accountancy exams to understand ;-)

Southwest Sat 23-Feb-13 23:26:50

Yes they can, but do they?
ever really? really??

its not like they get a list and use it?
do they?

I know LOTS of people with BTL who openly say they have never done a tax return

they could ALL be lying of course but its a funny thing to lie about really isnt it?

Talkinpeace Sun 24-Feb-13 11:54:55

Yes they do.
They have a backlog.
But because they have the right to go back 7 years by default and 20 years if they suspect evasion, the fact that your friends have got away with it so far does not mean HMRC do not have some nasty surprises waiting.

A friend is an inspector on that team and they are slowly working through them ...

Southwest Sun 24-Feb-13 17:45:55

OK but just to be clear, If you rent your house out dont tell you mortgage provider and dont complete a tax return

how are they going to find out?

can they really go back 20 years for evasion?
can they go after people overseas?

Talkinpeace Sun 24-Feb-13 20:34:08

and yup
sooner or later the house will be sold
HMRC are a bit like the tortoise - they will : eventually : tally housing benefit against mortgages and stamp duty

gaelicsheep Sun 24-Feb-13 20:46:30

'In lots of cases, mortgage payments are less than rent as people can only mortgage what their income allows unlike those on HB who can rent what they like.'

We have relocated and are having to rent for the foreseeable future. We have really struggled to find anywhere at all to live, and every single place advertised says no DSS. If we needed to claim housing benefit I think we'd be on the streets. Houses to rent around here are like hen's teeth - with so many people chasing them, I wonder how anyone on HB manages to find a home. sad

expatinscotland Sun 24-Feb-13 20:57:00

I spent the better part of an afternoon last weekend window shopping in every estate agent and letting agent from the top of Leith Walk in Edinburgh to its foot.

The rents were staggering and all 'No DSS'.

BigAudioDynamite Sun 24-Feb-13 21:14:48

I don't BTL. My sister rented our her flat for a while whilst she was moving to a different area. She was told that if the mortgage company and insurance aren't aware that you are renting your property, then the insurance is void (i think). It's quite a big risk, if that is the case? Although, saying that, my parents have never even had building insurance!

LahleeMooloo Sun 24-Feb-13 21:14:52

The country is broke, there isn't enough money to cover what we're currently paying out let alone anything extra!

FlouncingMintyy Sun 24-Feb-13 21:20:17

I don't know if you have read the whole thread Lahlee but my op and many of the posts following it are based on the fact that is is very often cheaper to pay mortgage interest than rent.

FlouncingMintyy Sun 24-Feb-13 21:21:14

Edinburgh is a hugely expensive city to live in.

Talkinpeace Sun 24-Feb-13 21:24:33

but I could not afford to buy the house I've lived in for 16 years, because prices have risen so far above sane multiples ....

goodness knows how the people done the road afford rent of five times my mortgage payment
other than an HB subsidy
in which case the only gainer is my former neighbour who is now living in his mums house rent and mortgage free (and good luck to him : we are still friends)

FlouncingMintyy Sun 24-Feb-13 21:37:33

Talky, I know all about insane house price rises. We cannot afford to move from a 3 bed 1 bath to a 4 bed 2 bath even though you might expect to be able to do so after a salary increase of something like £50,000 pa over the past 8 years. Ftbs are worst affected, sure, but everyone who isn't a squillionaire feels the knock-on effects.

samandi Mon 25-Feb-13 11:57:27

YABU. People should take out mortgage protection and if something unforeseen happens that is not covered they can some help towards mortgage payments.

Talkinpeace Mon 25-Feb-13 12:31:53

The number of successful claims on Mortgage Protection insurance is vanishingly small
that is why the banks are being fined millions and millions of pounds for mis-selling it.

to my knowledge I am one of the very, very few people who ever got money out of such a policy, and that was in 1987

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