Bailing out the squeezed middle's mortgage repayments?

[EveSix]

Listening to Any Answers and feeling frustrated, but wondering if I'm missing some nuance.

A caller is advocating for government bail-outs to cover mortgage payments for home owners impacted by recent hikes in interest rates.

I feel a sort of existential exasperation at this idea.

I absolutely understand that times are tough, and that we form strong attachments to the buildings we live in and the choices and advantages that a certain income affords us: holidays, the ability to have savings and university funds for our DC, as were mentioned in the programme.

I understand that there is, what some would argue, a precedence for such a bail out in terms of recent quantitative easing, furlough payments and schemes to support businesses following the pandemic.

But home ownership is a massive privilege in itself, in a skewed growth economy that encourages profiteering from the basic human need for shelter.

Home 'owners' don't own their mortgaged houses; they owe money to the financial corporations which will be the ultimate beneficiaries of such bail outs.

Does the squeezed middle need bailing out? It seems ludicrous to me. People have been permitted to overreach financially. Surely, the remedy is to spend our own assets first; use our savings; the rainy day did come. Move in order to downsize or relocate to a cheaper area; we're not tethered to the building we currently call 'home' if we no longer can afford it.

The caller asserted that "...life is for living!" by way of explanation why scrimping and cutting back feels like deprivation.

What am I missing?

No, I can articulate that better. I would rather live somewhere less nice or less convenient because I can't afford my mortgage than have people literally starve. Because if there's not enough money to have both we're going to have to choose who we pay for at some point.

absolutely this.
It’s all well and good to bail people in trouble out by paying taxes for 30
years, but when the shit hits the fan the other way you get zip.
Yes people could have foreseen the mortgage rate going up, but no one who bought a few years ago could have foreseen what has occurred since then- not just with mortgages but with all other costs. Lots of people who had stressed tested are now in trouble.
Do people seriously think that this won’t affect them because they rent or because they own their home?
Renters are going to be totally screwed almost as much as mortgages payers.

It's not a right to live near family/one's established community, but on a societal level we really need to be thinking about the downsides of a system predicated on the view that it's not something worth facilitating either. There is a lot of value in support systems.

There is a lot of value in support systems

particular pertinent with the state of social care & the nhs

Yes. Social care, child care, mental health...

We can't keep living in a situation where the best and the brightest can take on necessary and important careers that benefit the whole of society - and yet struggle through life and end up with nothing to show for it.

Exactly this. What incentive is there these days for a young person to go into the medical profession? Or teaching? Two essential roles which benefit society as a whole more than practically any other job.

Yes of course we need masses more social housing, yes of course the most vulnerable members of society need to be supported better. But it's easy to forget those who aren't the most vulnerable, the kids who work hard, go on to university and have the ability and skills to do a lot of good in society. In the past, the thought of affording a decent home and life style would have been part of the reward for the pressures of jobs like this. Nowadays that's not the case.
I can quite understand that if a young adult can't afford somewhere decent to live, they might as well do some lower pressure zero hours contract job rather than work their arse off in a demanding and pressurised role and still have a crap lifestyle.

No wonder there's a massive shortage of the most essential workers in society.

@watermeloncougar Good post

(and secret Harry Styles fan?)

Yep. People don't want to hear it, but if we break the link between these jobs and the ability to afford a comfortable life, we all have a problem.

I will be massively pissed off if there are mortgage bailouts.

That’s the issue, this economic situation has not happened overnight. It has been a long time in coming and far too many people have already had their lives, if not wrecked, completely changed from their original planning and work.

No one minds helping out those who have worked and been let down by health or men, but lifestyles have become so very different that one person’s struggle is another’s unimaginable luxury. There is not a one-size solution that can fit all any more. Too many have wildly different experiences. And unfortunately most of us have been forced to sit and watch everything being given to those who had the most to start with. There is not much public trust going around.

I hope the neoliberalists are pleased because this was all very very predictable, and in fact was predicted in many circles. As usual the greed of upper circles has been allowed to destroy the economy.

So very true about people’s expectations, I see people despondent about only being able to afford lifestyles which other people could only dream of. Complaining that they can’t afford to take their children to cinema every week or will no longer have hundreds of thousands to leave their children. Complaining that having chosen to have 2 children in 3 years, they have to slightly adjust their already comfortable lifestyle to pay someone to care for their children, indignant that the the tax payer isn’t funding someone else to provide the care for most of their children’s waking hours.
I personally think there should be help for people to keep their own homes but in the form of loans rather than bailouts as their are people far worse off that the country needs to prioritise

The middle absolutely got bailed out with furlough during lockdown that was ridiculous Si much money for sunbathing!

Also whole cohorts of low wage workers as well, tbf. People working in wet pubs, cinemas, bookies, nightclubs, tills in non-essential retail... none of these jobs are exactly highly paid.

And if you were anti furlough, I hope you were also anti lockdown too. Because we couldn't have had the one without the other.

@StormShadow not anti furlough but anti the amount-80%! 60% would have been ok, or just give universal credit entitlement to those people

@StormShadow I was anti furlough and anti lockdown. I worked (from home) throughout Covid and the thought that 30something year olds family lives (statistically will be the worst hit by these mortgage rates as have had to sink their savings into expensive housing (rent or mortgage) while being pummelled by nursery fees, food inflation and wage stagnation) are potentially going to be worse impacted by this shite show of an economy to keep alive the ill health mortgage free lot who now show no compassion (read all the threads spouting "I paid 15% in the past... deal with it, you should have known etc" is galling.

UC wouldn't have worked, for two reasons. One is that the system wasn't ever designed to cope with millions of new claimants overnight. It would've been impossible within existing parameters.

And the second is that when millions of people have just been banned from making a living overnight, in order to get them to actually do what the government wanted, ie stay at home out of the way, they also needed to be paid enough to be pacified. UC doesn't do that, which isn't a surprise bearing in mind it is and was designed as an essentially punitive system for those who aren't working.

I'm not wedded to 80% specifically, it was a broad brush and it's conceivable that 76.888% or whatever would've been optimum. But in general, enough of the population had to be paid enough to keep them in line enough. That doesn't come cheap.

@TrudyProud, fair enough you're consistent! I accept that there are valid arguments for and against lockdown and remain on the fence myself, but people who think it could've been done without generously paying people to stay at home are naive. Agree anyone talking about paying 15% on much tinier mortgages in real terms like it actually matters now is an irredeemable fuckwit.

Going to write the unsayable, which is that the duration of benefits will have to be curtailed. Made redundant; you get x% provided you've worked for at least y% years, and it runs out after 18 months. UNLESS, you have severe disabilities, suffiencient to incapacitate you from ever considering paid employment. or young dependent children and with small kids, it still runs out once they are old enough for school.

Switzerland pays about 70% of what you earned, before redundancy for about two years, and then it all stops... hard. After which you need to work for x years to requalify for benefits. I don't know the details, but there's no easy options to avoid work long term.

Contributory JSA only lasts a few months. After that, it's income related UC.

Contributory ESA (unless in support group) lasts about a year, after that it's income based UC.

Well said @StormShadow. It's ludicrous to think the govt could instruct people to not go to work yet pay them vastly below what they earn.

Especially if they voted Tory and/or for Brexit.

As someone who may benefit from such a scheme I definitely say last resort only so many other things could be done...payment breaks, interest only, lengthen the term with no penalties applied. This is only a temporary situation so these types of measures should be considered. Much better than people defaulting and losing home too.

People were allowed to tak up to 6 months payment breaks during covid dont see why this cant be allowed again or a reduced amount for x months. Anything missed is just money they pay later on ...