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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To get annoyed that people renting get more help than people buying?

88 replies

lesley33 · 29/09/2011 13:25

Basically I think it is unfair that people made unemployed will usually get most if not all of their rent paid whilst people with a mortgage usually get nothing for 9 months.

I don't think people should get help paying the capital part of their mortgage, but they should imo get help earlier to pay the interest and thus keep their house until they get another job.

I know in theory people can get help with interest payments 13 weeks after they start receiving certain income based benefits. However in practice most people who have been working are entitled to contributory job seekers allowance for 6 months. This makes it unlikely you will qualify for the benefits you need to be receiving to be able to get help with mortgage interest. Even if you have exactly the same income as you would have had if you had been claiming income based benefits.

So in practice, most people get no help until after 9 months of being unemployed. Many people would have had their houses repossessed by then.

I wouldn't mind so much if home owning was confined to the well off. But many people who can't get a council or HA house end up buying on low incomes.

OP posts:

Original poster

lesley33 · 29/09/2011 14:20

You can claim for mortgage interest on up to £200,000 of your mortgage

for up to two years. The standard interest rate used to calculate SMI is currently 3.63 per cent.

So the maximum would be £7260.

I don't have a problem with this, I just think you should be able to apply and get it after 3 months of being unemployed, rather than 9 months.

OP posts:

mousymouse · 29/09/2011 14:21

lesley I live in a city. we rent. to buy the place (or similar) we are renting would cost us double what we are paying now for rent. we have been in the same place for 5 years, how is that for stability for the dc...

TotemPole · 29/09/2011 14:24

lesley, I agree you shouldn't have to wait months to be eligible for help.

Original poster

lesley33 · 29/09/2011 14:24

There have been lots of redundancies where I live. And yes I do know families where both have lost their jobs at about the same time. People who are self employed can get insurance in certain types of circumstances. My OH is not one of those people.

And yes everyone should have savings. But you need a lot of savings to cover you for 9 months. And of course I looked at everything when I bought - but then you got help after 3 months.

OP posts:

PeachyWhoCannotType · 29/09/2011 14:24

'If one of you is working, presumably they wouldn't get their rent paid?'

Not necessarily, working people can get HB too if on a low income but very much on a sliding scale as to how much, with complicated calculations involving number of children etc. They can;t get more than the set rate though whcih from April is the cost of the housing in the area on the 30th centile.

GypsyMoth · 29/09/2011 14:29

Surely if you are made redundant then redundancy money could be used towards mortgage? Especially if one person is still working and the other claiming ESA?

norriscoleforpm · 29/09/2011 14:50

Peachy has verified my point - despite the fact that we were on less than a third of the income we had been on when I was working, we got no help whatsoever with our mortgage OR council tax. If we had been renting in the same position, we would have at least had a little bit of a break! Luckily I found a job but it was very very frightening for a while :(

Original poster

lesley33 · 29/09/2011 14:53

If 1 person is still working, I don't think it is such an issue.

You only get redundancy money if you have been working for a company for at least 2 years. Even then statutory - which is all I have been entitled to for years in many jobs - is only 1 weeks pay up to a maximum of £400 for every year you have been employed. You can get up to a maximum of 20 years continous employment counted.

OP posts:

pippilongsmurfing · 29/09/2011 14:56

Surely the difference is that when you own your own home you actually own something at the end of it.

Why should other taxpayers pay for someone to buy a house and make a nice profit when they sell it.

Do you not have to have payment protection in case of redundancy/illness etc for mortgages?

MelodyPond · 29/09/2011 14:57

But one day you will own that house. I will never own this house. It will never leave my children inheritance or pay when I downsize once they have left.

I don't think it sits well with me. I might be being unreasonable. But you do take a risk when you buy. Knowing that one day it will all be yours.

MelodyPond · 29/09/2011 14:57

X post Pippi!

EricNorthmansMistress · 29/09/2011 14:59

YABVVVU
people who buy do so knowing the risk but taking all the huge benefits that go with it - total security as long as you can make the payments being one, and full ownership of a proprty at the end of your mortgage term being another. If you pay £800 a month towards a mortgage then at least 50% of that will be coming back to you (+ equity accrued) by the time you retire. I pay £800 a month rent and I get feck all when I retire.

lassylass · 29/09/2011 15:02

Help with mortgage interest payments I can see, but any more than that and the gov. is buying your house for you.

I think the gov. should put a charge on any property they have paid the interest on, so that if the property is sold at a profit the money returns to the taxpayer. There is so much unearned equity floating about.

People generally have to rent (if they cant get shelter in other ways). Its a choice to buy.

BelleDameSansMerci · 29/09/2011 15:08

MoreBeta made the point I was going to make...

As a homeowner, would you like to be taxed on any increased value on your home? You can't have it both ways.

mousymouse · 29/09/2011 15:12

melody no you don't own the house eventually when on interest-only. it's like renting a house from the bank.

Vallhala · 29/09/2011 15:14

For the record, lesley, wrt comparing rent in town and country, I live wihin a few miles of a city. My rent is the same as it would be if I was a tenant in that city in a comparable property and I would come under the city's housing benefit allowance band. So, for me, your argument still doesn't work.

EricNorthmansMistress · 29/09/2011 15:15

Ok Mousy but you pay a lower amount than you would if you were renting, plus you still get security (can't get two month's notice from the bank can you?) So it's still far better than renting. You also make money on the initial investment (deposit) presuming you keep the house long enough to accrue equity.

TotemPole · 29/09/2011 15:17

They do pay the interest for a period now. But at the moment unless you get the right benefit you have to wait 9 months before the payments start. That doesn't seem right given that someone who rents, claiming the same benefits, will have rent paid immediately.

From a practical point of view, it's putting owners at risk of losing their homes. They could end up in a position where they have to rent and claim HB. In most cases, monthly HB for full rent will be higher than the monthly mortgage interest.

I totally agree, payments should only cover interest and not the capital.

NinkyNonker · 29/09/2011 15:29

Payments do only cover interest.

PeachyWhoCannotType · 29/09/2011 15:32

Tptem I suspect the idea is that if they sold they would often exceed the assets level for claiming HB anyway- not always, we wall knwo what equity is like, but often.

norriscoleforpm · 29/09/2011 15:36

That's what I said - just the interest for a short while and maybe as a loan to be paid back. Yes of course we knew the risks when we decided to buy but we didn't know i was going to be literally bullied out of a well paid job - obviously getting no redundnacy, but forced to leave or basically have a nervous breakdown! Another story of course, but there are all sorts of reasons people become unemployed and not all of them are covered by insurance. Sadly.

bruffin · 29/09/2011 15:44

A friend of mine who has just retired in her 70s has just come up against this.
She has an interest only mortgage which will basically run until she dies. It is currently on a fixed rate of 5% which she can do nothing about for a while.
Benefits will only pay upto 3% interest so she only gets about £25 (not sure if that is a week or a month so £100 max) towards her £400 mortgage, not sure what else affects how much she gets, but she has no savings. If she was renting she would get all £400.

Original poster

lesley33 · 29/09/2011 16:19

All you can get is some help towards the interest - that doesn't help you buy your house. It is just like paying rent to the bank. All I think is that you should get help with this after 3 months if unemployed and no/low savings as peopel renting do, rather than have to wait 9 months.

And i wouldn't care about being taxed on any increase in value of my house. Houses increasing in value only benefits buy to let people or people selling their house to downsize. If I sold my house I would only be able to afford to buy a house at the same price or less, so increases in value don't benefit me.

I don't expect to have any equity to pass on. I am sure all the equity in my house wil be used to pay any care bills when I am older.

If I lived in the magical places some posters do where it is cheaper to rent than buy, then I would be renting. I have NEVER lived anywhere where that is the case. To privately rent the house I am buying would cost me nearly double on a monthly basis. So it feels a bit like a hobsons choice.

Payment protection insurance is useless for the many people like me surviving for years on short term contracts, as they would not insure me - although I would love to have a more secure job.

OP posts:

PeachyWhoCannotType · 29/09/2011 16:22

There should be a way of doing this more efficiently- just converting to a shared ownership maybe with remaining % held by council and rent paid on it, then going back into shared ownership system on death or sale so somebody else can get some sevure but affordable housing in the future. After all everyone pretty much agrees that a lack of affordable hosuing is a massive issue, and we all know homelessness costs ££££££ in so many areas- rehousing, temp accom, school changes, health... but it will mean people giving up a % of their homes and quite a few will not like that either.

GypsyMoth · 29/09/2011 16:23

Is it actually 9 month wait though?

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