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

[FlouncingMintyy]

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

[Talkinpeace]

samandi
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

[samandi]

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

[FlouncingMintyy]

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.

[Talkinpeace]

Mintyy
agreed
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]

Edinburgh is a hugely expensive city to live in.

[FlouncingMintyy]

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.

[LahleeMooloo]

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

[BigAudioDynamite]

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!

[expatinscotland]

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'.

[gaelicsheep]

'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.

[Talkinpeace]

yup
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

[Southwest]

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]

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]

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]

Southwest
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]

Talking

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?

[AllDirections]

Interesting idea Hec Not sure if it would be allowed though

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

[Talkinpeace]

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

[FlouncingMintyy]

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]

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?

[Southwest]

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]

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]

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
whatever

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

[Orwellian]

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).

[Sarahplane]

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.