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To expect people to pay their own mortgages..?

(52 Posts)
RaspberryCheese Mon 05-Feb-18 10:33:59

www.theguardian.com/money/2018/feb/05/state-benefit-support-mortgage-interest-loan

Why the outcry? We have a system whereby people can own a hime and if they fall on hard times, they can switch to an interest free mortgage and the state i.e the rest of us, pays the interest presumably ad infinitum.

Why should the state do that?

No..as the article suggests, it should switch to a loan based system whereby payments the state makes acquire equity in the property which can be recouped at a later date.

Abracadabraapileofbollocks Mon 05-Feb-18 10:38:32

Possibly because the interest only payments are 1. Short term (generally will be agreed where the house is already for sale/ a date is in place for that).
2. Cheaper than providing afforable housing.
3. Cheaper than housing benefit.
This allows payments to be longer term and does not require a commitment to afforable housing in the long term and provides the government a means to making money out of people on a low income.

mirime Mon 05-Feb-18 10:39:15

Can we do it with housing benefit as well? Why should landlords - who are often actually having their mortgage paid for by benefits rather than just the interest - have houses bought for them by tax payers?

I think the change is wrong. The tax payer isn't paying for a single brick by paying the interest, but it is keeping people in their homes and potentially reducing costs elsewhere.

I see very little difference between paying mortgage interest and paying housing benefit.

SilverDragonfly1 Mon 05-Feb-18 10:41:36

While I understand the thinking behind it (although NOT adding interest as then you are actually forcing the recipient to pay for getting the support), £205 million a year isn't going to make or break the UK either way. It's just more dole scrounger propaganda essentially.

Shimmershimmerandshine Mon 05-Feb-18 10:42:37

It centres around this:
Those in favour of the scheme have argued that it is not the role of the UK taxpayer to subsidise mortgage payments for an asset that can be passed on to children after their death.

But conversely it's fine to pay rent from taxpayers money via uc/ hb to pay the mortgages of landlords. So it's fine if your rich to be subsidised but not to support stability for the poor.

So yabu.

Spartaca Mon 05-Feb-18 10:42:39

What's the difference between this and housing benefit?

Bizzysocks Mon 05-Feb-18 10:42:43

I disagree with this change. It will cost the government more if all these people get there house reposed and they have to clan housing benefit.

It's only the interest on the mortgage that is being paid not the mortgage itself.

SilverDragonfly1 Mon 05-Feb-18 10:50:54

Housing Benefit cost over 25bn in 2015 according to the BBC. So the only difference really is that paying mortgage interest is a minute cost in comparison and one that can only make people's lives worse.

RaspberryCheese Mon 05-Feb-18 10:56:28

Paying for HB and paying for mortgage interest is simply not the same. The mortgaged house is registered at hm land reg in the claimants name and so by owning the property they continue to have use of it and benefit from any gains whilst the state pays. The state is investing dead money. Further the owner can pass on the property.

A HB claimant doesnt own property. There is no gain to be made. The landlord is simply leasing the property to the tenant.

Ineedacupofteadesperately Mon 05-Feb-18 10:57:06

It will cost more to the taxpayer to have these people renting and paying off a BTL mortgage. Especially for pensioners where the mortgage left may well be small and well below the market rent for even the smallest flat. It seems honestly a fuss about nothing given the numbers and sums involved.

In principle maybe this sort of assistance should be limited (e.g. requiring homeowner to be actively jobhunting - although it might already be - article a bit short on details) but the housing system is so broken and this seems the least of the problems. Housing benefit to BTL landlords (where it may be actually paying the mortgage not just interest) inflating rents seems a bigger issue, and stopping these payments will only add to the rental housing benefit bill.

Shimmershimmerandshine Mon 05-Feb-18 10:59:38

But the landlord own the property raspberry and probably uses the hb to pay his mortgage. But I guess he's not poor so it's OK for him to benefit from government money in the long term.

crunchymint Mon 05-Feb-18 11:01:35

I agree with this. People being made homeless helps no one and costs the state more in the long run.

Bigfatchips Mon 05-Feb-18 11:01:53

But what about the thousands (hundreds of thousands?) of landlords having a house bought for them by housing benefit?

Often via one of their own relatives.

PositivelyPERF Mon 05-Feb-18 11:02:25

So you want people who fall on hard times to lose their homes and join everyone else in the fight for rental properties? It’s interest only payments, so when they get back on their feet, they’re no better off, as the mortgage owed won’t have changed. Ffs, some people really want a race to the bottom, don’t they? Should people who work have to pay towards those that don’t but have children? 😒They’re both choices.

TheShaniaTwainExperience Mon 05-Feb-18 11:03:47

A HB claimant doesnt own property. There is no gain to be made. The landlord is simply leasing the property to the tenant.

Ok you’ve made it pretty obvious here that it’s not the payment you’re concerned about, it’s who might benefit in the long run from said payments.

As long as it’s rich landlords then it’s ok, right?!

Foslady Mon 05-Feb-18 11:04:31

My mortgage is cheaper than rent would be for an equivalent house (2 bed semi). If I lose my job and get thrown out of my home, once my capital had been used in rent payments the government would pay a higher figure in HB to pay someone’s mortgage on an investment than it would in paying the interest to give me a bit of breathing space to get another job.
I’m for it.

TheShaniaTwainExperience Mon 05-Feb-18 11:04:38

Was thinking the same,PERF

Clandestino Mon 05-Feb-18 11:07:01

It is cheaper than rental support or picking families homeless from the streets.
It's called social solidarity too. I would bet that you won't find many who do this as a way of misusing the system. Contrary to what the likes of Daily Mail like to present, most people falling on hard times or social benefit recipients aren't scroungers and don't do it because they like it.

WhooooAmI24601 Mon 05-Feb-18 11:13:55

Crikey, surely the only people who use this option are ones who've already lost a huge amount; in order to have had a mortgage the homeowner would have been working and presumably lost their job. Next up they need to lose their home with no support?

The whole point of that system is to bridge the gap where a homeowner loses their ability to pay for their home and rather than fall into a trap of non-payment/eviction/amassing huge debts they're able to tide themselves through and (hopefully) get back on their feet. I'm sure sometimes it's a piss-take but I'd hope for the majority who use the scheme it would be because there's a genuine need.

DH and I both pay a large amount of tax each year and I can't imagine a world where either of us begrudged our taxes being spent on people who need support. The whole point of a benefit system is that it supports people who fall on hard times. There but for the grace of god go I, and all that.

When DS1's Dad left I was on the absolute thinnest of ice with mortgage payments and employment. It was only because I'd got a small amount of savings to offer my mortgage company that I managed to hold onto our home. I didn't life a life of reilly and piss my money up the wall, my partner walked out and my situation went from comfortable to precarious. Life can change quite suddenly and I don't think refusing to spend taxpayers monies on supporting situations like that is going to change or improve the economy drastically.

IWannaSeeHowItEnds Mon 05-Feb-18 11:14:35

I know of a local employer who pays absolute minimum wage (no sick pay etc). Thet employ people from outsise the area, sometimes from abroad, house them in property they own, but because these people are so poorly paid, they have to claim hb to pay the rent, which then gets paid back to the employer. Said employer owns quite a few houses which are being 'bought' by the tax payer. This is legal and 'okay', but helping some poor bugger who is going through a rough patch is wasting public money?

People with mortgages are highly likely to have paid tax - they are entitled to some help back. Keeping their home is a huge incentive to them to get back to work as soon as they can. Punishing them by letting them lose their home benefits no one. Plus, there is little council housing available if they do get repossessed.

Youshallnotpass Mon 05-Feb-18 11:17:22

Using your logic then, surely its way worse to pay housing benefit to people renting privately. In those instances you are paying someones Mortgage interest AND their capital AND a profit!

So no, I don't think it should be scrapped or changed.

Gilead Mon 05-Feb-18 11:19:53

Let's kick them whilst they're down, eh!
hmm

SuperLoudPoppingAction Mon 05-Feb-18 11:22:29

This was always a very hard benefit to claim anyway.

Have you seen the criteria?

A family being homeless is very expensive. If this helped some families stay in their homes, and not homeless, think of the impact on local government funds, on families keeping their children in local schools, on parents staying in the area where they've build up contacts, to find a new job.

TransPortFormerlyCherie Mon 05-Feb-18 11:30:46

I think they should extend this to paying the mortgage. Then either the person pays the government back when they are earning enough, or on sale of the house, whatever % the government has paid goes back to them. If the government/local council own more than 50% of the property upon death of the person, they get to decide whether to buy the remaining 50% from the relatives and turn it into social housing, or just get their 50% back.
Seems a better way than the person ending up in rented property claiming HB, where the government pays the landlords mortgage off.

I believe the current system of mortgage interest payments only lasts 6 months anyway.

Dalg Mon 05-Feb-18 11:34:48

I am affected by this change. I was made redundant and am having trouble finding a job I can do that fits in with my caring responsibilities. My son's father died so I don't receive any child maintenance now. Losing both the maintenance and the mortgage interest will make things very hard. It I can understand the op's feelings. I never thought I would end up on benefits.

I have a job interview next week which has the hours I need. I am praying and keeping everything crossed that I get the job then I won't have to worry for a year. The job is only temporary until March next year but it would be great to have a foot in the door as a temp worker.

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