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?

[MrsLyman]

But repossessions aren't just a case of person loses job can't pay mortgage scenarios. I'm sure I read somewhere that most repossessions are due to defaults on second mortgages/ equity release or secured loans.

[CogitoErgoSometimes]

YABU.... a person who owns even part of a property has a realisable asset. If they can't keep up the mortgage payments after any period of state help has expired they can sell the asset. Any lump sump generated means they wouldn't necessarily automatically qualify for HB in a rented property straight away.

Lending behaviour has changed. Lenders want at least a 10% deposit now, much greater proof of income and look more carefully into existing financial commitments than they did in the recent past. Even if mortgage-holders get into difficulty, they are more likely to offer some rescheduling of terms rather than go straight to repossession.

[expatinscotland]

'As I said before, why should someone paying a mortgage pay insurance when someone paying rent doesn't have to? '

Because they are protecting their asset. Their home is their asset. They pay the loan and the home belongs to them.

The renter's home is not their asset, it is the landlord's.

[foslady]

yy sooperdooper - that is EXACTLY my view.

[expatinscotland]

'Housing benefit paid to a private landlord is paying off their mortgage, why is that seen as ok but helping someone keep their own home isn't?'

Because government favours BTL landlords.

[HappyMummyOfOne]

Whilst people should protect their own assets with insurance etc, it is very unfair that those who work and only claim welfare when actually needed rather than as a choice are penalised.

There are lots of changes that need to be made to make things equal for all. If mortgage help can only be claimed for 12 months then so should HB. If maternity pay is 9 months than IS should be only for the same set period.

Far more benefits should be contributions based, it is very unfair that the workers who put the money into the pot get very limited help when thousands never work a day and yet we fund their homes, their spending andthe number of children they bring into the world.

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.

[expatinscotland]

'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.'

No, they can't! They are subject to LHA caps and have to find a LL who will take HB at all.

And, just an FYI, 80% of those who claim LHA/HB are working.

[RedHelenB]

i doubt I would get insurance as not in a permanent job.

[sooperdooper]

The renter's home is not their asset, it is the landlord's.

Ok, but it's still somebody's mortgage, so if I lose my job, I'm better off moving out of my house and renting it to someone who can get HB to pay the mortgage!!

[CogitoErgoSometimes]

"'Housing benefit paid to a private landlord is paying off their mortgage, why is that seen as ok but helping someone keep their own home isn't?'"

That's not an argument. Most business rely on loans to operate. Housing Associations, builders and, in the case of a private landlord, the money borrowed is in the form of a mortgage. If the state is prepared to finance rental and there isn't enough public housing to go around, private landlords will receive some of that money.

[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.

[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).

[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

[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]

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]

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?

[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]

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

[AllDirections]

Interesting idea Hec Not sure if it would be allowed though

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

[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?

[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]

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]

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]

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]

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