To think being able to use housing benefits as a mortgage is unfair?

People may be allowed savings of £16k but beyond £6k do they not start to take money away from benefit entitlement? That would make saving for a deposit very difficult- who can afford to save even £6k on benefits? Even working people relying on UC/HB will struggle to save.

I don’t really understand why people are outraged that people in receipt of benefits might get mortgages which are always lower repayments than private renting yet they’re more than content to pay well over the odds to landlords in HB or UC rent to help them pay off their second, third, hundredth mortgages often as part of large portfolios. The hypocrisy is astounding.

yes the answer is more and better social housing but the tories are obsessed with private ownership.

Many people in UC work full time and a lot of housing benefit is already paying the mortgages of second home owners
I agree. I’ve got a friend who is privately renting, using housing benefit. The landlord is making a Huge profit from the tax payer and it makes me so cross! Friend can’t afford to save a deposit because she’s on benefits and will be stuck in the private rental market forever (she is one of 4 and her one living parent lives in a council flat, so there won’t be any inheritance). I’d much rather tax payers money pay for her to own her own home rather than a landlord to own several.

there is a massive problem with the amount of social housing in this country (in that there isn’t enough of it) and that’s where the government should be putting its money.

Why is that then? The vast majority have tenants on 6 or 12m AS tenancies, and failing that, rent arrears is grounds for possession, so the LL will just evict and re let. The costs incurred should be factored in to their business planning. No business is without risk and if a LL wants to enjoy the profits they should be prepared to accept the costs, and insure or budget accordingly.
The only people I will worry about is those without the basic right of a secure home.

This is exactly what my mum did in the 90’s. Paid for her mortgage using income support. It meant we had a safe secure home and she had more choice in where we lived (near her parents).

Social mobility in this country is not great. Surely it’s better to allow people a chance to own their own homes than money just be doled out to private landlords.

Thanks to my mum being able to have a mortgage she was able to help all her children to buy their homes when we were older. We received a lot of benefits when I was a kid. My whole family is now working professionals paying loads more in taxes than we ever took in benefits. Any opportunities for people to achieve a better quality of life should be praised.

The whole policy is a nonsense as if you had in savings even a fraction of what you'd need to put down a house deposit (especially if you're on a low income, which you'd have to be to be getting the benefits) in most of the country, you'd lose all your benefits.

It could only be thought of by someone with no clue whatsoever about how their own system works

You'd still need the deposit and anything over a certain amount of savings means you get benefits reduced pro rata.
Housing minister says that ATM, only about 1000 people would qualify and there are no funds to make this happen. It's all really pie in the sky and baloney.

The reason that Endowment Mortgages were so popular at the time was because the agents were paid the most commission for them up front. In the 90's it was at least £2,000 per endowment sold.

So they would lie and sell them to people, telling them that at the end of their mortgage, the Endowment would pay off the initial amount of mortgage borrowed, and they would also get a lump sum. The mortgages would be interest only.

Unfortunately the Endowments did not increase in value as predicted and people got to the end of their mortgage term and didn't have enough to pay off the initial lump sum. They were knowingly mis sold.

I don't understand why I, as a HA tenant, would want to buy it? This isn't meant to be goady at all.

I pay £520 a month for something on the private market would be approx £1200 a month. That shows the extent of the issue with private rents.

I have a life long secure tenancy, private rentals are at the mercy of the landlord.

I largely save and fund my own repairs/upgrades as a rule of thumb the repairs/replacements by the HA are pretty shocking but I have the flexibility to do so as I wish and can fall back on the HA for major things.

Having a fair, sensible, rent has meant that I could spend 3 years studying to get my degree which has massively improved my long term prospects. I've just been offered a 30k a year job. I wouldn't have achieved that if I didn't have an affordable rent that allowed me the time to study and build some experience.

I love my home, I love what it has done for my family more. I don't want to buy my home, I want someone else to have the benefits that it has provided me. Reality is I could not afford a private rental and I have a disabled child who very much needs security so we will remain here long term but once we are done it will be available for someone else.

I wouldn't want a mortgage reliant on benefits, benefits are too liable to go wrong. I'd be surprised if lenders are agreeable either.

Build more HA homes to provide more families the opportunity mine was given, don't get rid of them.

They really were lax, even in the UK. In the early 90's I worked for a Financial Advisor who arranged mortgages, life insurance etc.

You could get 110% plus mortgages, you just had to say the excess was going towards improvements in the property.

If only I was born earlier! Some of my older colleagues had 110% mortgages, 95% interest only mortgages etc on very low salaries.

And again they worked out well for some people I remember cashing in my access endowment policy and it was about 30 grand he hadn’t added a penny to it from 2004 onwards but the point was it was only ever meant to clear the mortgage that he took out in 1992 for 33 grand so he might of been a little bit short but bloody hell we could’ve pulled that out of the bag in a matter of weeks.

I'll have to ask my mum later but I'm sure when I was a teen, so 1984 or there abouts, this is how she bought our house. I'm sure if you were unemployed your housing benefit paid the mortgage. I'll have to check with her when I speak to her next.

I they haven't admitted they are wrong. They are trying to detract from the various scandals and shore up votes amongst people who wouldn't usually vote Tory.

😂

It really was the wild west before the FCA. My boss was one of the leaders in the field and kept trying to convince me to do the new exams for the FCA. They were mind numbingly boring and I was 18 and stupidly didn't do them, lost opportunities. 😀

When the UC rules were drawn up the government refused to allow people to ring fence savings they had while claim tax credits for a house deposit. You can get boy have the savings for 12 months. The government’s logic was benefit claimants wouldn’t be able to afford a mortgage anyway.
Now they have admitted they are wrong?

Endowment mortgages were around this time too I think.

I do think the idea of excluding savings in LISAs when considering UC eligibility is a good one. I've seen posts on here of people being left an inheritance to put towards a house but because they're on benefits they just end up having to come off benefits until it drops below £16K so doesn't benefit them. It would be good if the money could be ringfenced in a LISA so that if their circumstances improved and they were able to work again they'd not have lost their deposit.

Literally the first mortgage I got, I had to take in a letter on headed paper from my boss he was about 24 , signed to say that I had higher earning potential and he anticipated I would an XYZ figure off that they calculated it. I was extremely cautious borrower —a damn fool in hindsight—

If the Tories really wanted to help poor people, they would introduce a Rent Cap on private rented properties, maybe no more than 10% of whatever the Local Housing Allowance is currently for that area.

Wow, where do you live?!

@Whirlygiggles it’s crazy to look back on now isn’t it! There was barely any oversight of the industry either, even the predecessor of the FCA wasn’t established until 2001.

They really were lax, even in the UK. In the early 90's I worked for a Financial Advisor who arranged mortgages, life insurance etc.

You could get 110% plus mortgages, you just had to say the excess was going towards improvements in the property.

It does affect other people if people don't work. I live in South Wales our council tax is higher than some parts of Cardiff and London because no bugger round here works!!!! Subsiding everyone else's CT meanwhile we struggle to pay.

This is so so strange. My DH and I had a combined income of 75k in 2019 (it's more now). We were able to borrow £330k to buy a 1930s 2 bed flat in London and I didn't even have permanent residency in the UK (only been here 3 years not counting university)! No kids as we were 27 and 29 respectively. We had a 15% deposit that we saved from living with family for 3 years.

We had a mortgage broker but only because my DH's employer paid for it.

The reality is this policy is not going to help many maybe any.

@Nothappyatwork yes the banking failures I mentioned were in the 2008 crisis but those mortgages would have been originated in the 90s onwards. Defaults are lower now than in the 90s as regulation was pretty lax back then.