If the government can pay rich landlords mortgages off - why can't they pay the interest on mortgages of people going through financial difficulties?

[UndertheCedartree]

My friend was asking how my financial situation was (as I have been unwell and in hospital) and I was telling her that it has finally been agreed that I am entitled to some help with my housing costs (interest on my mortgage) but that it is a loan. She was shocked and said when she had financial difficulties the government paid most of her high rent (more than double the interest on my mortgage) and it ultimately went to her rich landlord who was able to pay off his mortgage with it. It made me think about the supportive accomodation my boyfriend lives in. The owner is extremely rich and gets housing benefit for 10 bedrooms when there is only 6 as each tenant gets housing benefit at a 2 bedroom rate. He also gets £800 per month for utilities/broadband from the tenants.

It does feel unfair that I have to take out a loan to cover the interest on my mortgage while I'm unwell (as surely keeping a roof over myself and my children's head makes sense?) while wealthy landlords benefit from housing benefit.

To be honest OP it does sound as though you've got serious health issues and worrying about money isn't going to help.

At least if your mortgage provider evicts you you will then get rehoused (paid for) and won't have to ever worry about paying for a roof over your head again.

Can i ask how long you've had the mortgage for?

I've never understood why they stopped paying at least some of the interest on mortgages for homeowners who become ill or unemployed. It keeps a roof over people's heads without adding to the claimant's financial assets. Critical illness policies aren't always affordable, especially if you're not in great nick to start with.

I have often thought this, it makes no sense for someone in your position to not be able to get housing benefit to pay your mortgage rather than rent. Hope you can find a way through this and things improve.

@Leaannb - yes you're right I was very naive. I did have quite a lot of savings but it wasn't enough - it was very difficult to apply for benefits and took a long time to get anything.

@TriangleBingoBongo - nope - good on them making money.

@Reginabambina - yes, I see your point and maybe that would be a better way to put it. I do think paying a 2 bed rent for 5 tenants and £800 per month for utilities means the lanlord is being paid excessively for the service, though.
@Sn0wdr0psSnow - obviously too late for me to have insurance, my savings are gone and I have nothing to sell or rent.
@MyuMe - I realise I have been naive - I didn't know about this insurance/think about it. How long would it pay out for out of interest?

@YappityYapYap - I didn't mean to come over as shaming landlords. And I know the difficult situations that happen and I know they're not all rich. It was my friend who said her landlord was rich and I know the landlord of my boyfriend's house is very rich - based on his clothes/car/house/holidays and how much property he owns. I do feel a bit antagonistic towards him as my boyfriend's house is kept cold and the communal areas filthy and in disrepair.

The government does not have enough money.

They would get destroyed by the public if they used much needed money to maintain property owning individuals (who are typically better off than average) in that better off state. Benefits etc are a safety net. If you lose your owned home, they will cover your rent & you will be housed. It's about providing you with the basics, not maintaining your wealth.

It's simply not true that it's quicker to repossess a house than evict a tenant. The process is generally much longer.

OP I'm sorry you're in a difficult situation. Is it worth trying to sell your house whilst you still have some equity and renting until you're back on your feet?

Landlords pay tax though, don’t they? In fact from April, tax relief is being restricted so BTLs are not as lucrative as they once were & there are actually better ways to invest money.

it ultimately went to her rich landlord who was able to pay off his mortgage with it

I’m sorry but that isn’t accurate, it’s widely known (and considered a huge problem) that landlords with mortgages tend NOT to rent to people in receipt of benefits due to lender & insurance restrictions - it’s something that people are actually campaigning to change. The landlords who do rent to benefit claimants tend to own the properties outright & considering the lack of social housing, it’s a bloody good thing that they do accept people on benefits otherwise even more people would be up shit creek.

It's a good question op. It's the kind of conflict that was always going to happen as soon as private landlords took over social housing provision and individual house ownership. Personally I am so tired of the constant excuses on Mumsnet that private landlords solve housing and so are such beneficial philanthropists. There are other ways of doing that that do not entail public funds, or the private funds of poorer individuals, going into private hands for little or no actual work. The scenario you paint would obviously lead to resentment while buy-to-lets continue.

@NotSuchASmugMarriedNow1 - but it seems ridiculous to evict my children from their home while they need stability and also have to then pay a high rent for whatever temporary accomodation we might get (not sure if HB covers it all as it doesn't on normal housing). There is barely any social housing round here so we'd not get that we'd have to privately rent or stay in temporary accomodation. I've had the mortgage for about 12 years but there is little equity in it.

it’s widely known (and considered a huge problem) that landlords with mortgages tend NOT to rent to people in receipt of benefits due to lender & insurance restrictions

This.

OP if you have had the mortgage 12 yrs why no equity? What's happened to your original deposit, and 12 years worth of repayments?

@swimmingclubs - thank you.
@NoIDontWatchLoveIsland - if the government doesn't have much money why push someone into temporary accomadation which will cost a massive amount more than the interest on my mortgage (would the public be happy with that waste of money?) To be fair the government always used to pay interest on a mortgage and I don't remember them being destroyed by the public? I'm not wealthy as I worked in a poorly paid essential service. But how does it make sense for me and my children to lose everything because I have become unwell - it will only make it harder for me to get back on my feet and mean I'll be relying on benefits for longer.

NotSuchASmugMarriedNow1

It's shit I know. You're paying a mortgage and need help and the government won't pay but if you lose your home they will pay your rent! It's crazy.

There is a big difference in paying a mortgage and rent, it’s crazy you don’t understand that

I completely agreed with you OP. It's ridiculous that someone with a mortgage who falls in hard time can't get any help at all for 9 months after which it is a loan for interest only.

However if that person sells and goes into private rented then potentially the government would then pay much more money in rent which would pay the mortgage or towards the business income of a private landlord.

Ridiculous.

@PlanetoftheWood - I'm not really in a position to do that at the moment as I'm in hospital. I'm loathe to unsettle my DC further even once I'm out. It doesn't seem to make sense to make our accomodation less secure and more expensive at a time when we are very vulnerable.

Agree with OP many years ago I had an accident at work. No insurance as when I bought my house I was working fixed term contracts so ineligible. 4 months in and on 1/2 pay mortgage company let me pay £122 interest only per month, great.

Dismissed for ill health and.... No entitlement to means tested benefits as I "earned too much" with £150 pcm from second job who v generously kept me on and industrial injuries disablement benefit of around £20 per week. At that time they said a single person only needed £46(?) pw to live on and something about only counting a small % of the interest only portion due to previously remortgaging (for Lowe interest rate)

Had to sell my house for a quick sale at which point they were happy to pay £350 a month in benefit for rent. Utter madness.

Never got back on the housing ladder and all benefits then repaid when compensation for injury came through...

@MissSueDenim - yes that of course was just the experience of my friend.

@NoIDontWatchLoveIsland - I don't really want to go in to it as it's quite upsetting to me

@ivykaty44 - well, yes - the rent they would pay out is about 3 times the interest on my mortgage so would cost the government a lot more.

@turnaroundbrighteyes - I'm really sorry to hear that.

Are you in negative equity? If not then the best solution would obviously be to sell up rather than getting into more debt.

well, yes - the rent they would pay out is about 3 times the interest on my mortgage so would cost the government a lot more.

They don’t just pay all the rent, they’ll be a cap. A 3 bed house in my area has a cap of £135 ish per week - the rest you find yourself

Why should owning your own home be subsided by other tax payers? And then you sell it or pass it on to your D.C.

It’s sadly a case of either taking out insurance against this happening, which many people do

Having savings to cover the mortgage

Or selling the house and moving into rented

Landlords are not to blame - they are providing a service. I may be in a similar situation soon and agree it’s unfair. The government should pay the interest only portion of the mortgage for a fixed period of time ( maybe a year or two whilst we can sell up) and not expect it to be repaid. I think it’s unfair that others in financial difficulty can get housing benefit and this is not repaid.

For whoever sneered that op should have had critical illness and/or employment cover - not everyone is eligible. We don’t all enjoy good health. I do have life insurance but was refused further cover due to health. It was not an oversight - I tried a broker and had medical reports completed but I was deemed too high risk.

Also, not all houses have increased much in value - mine certainly hasn’t. There is a small amount of equity from payments I have made and the deposit, that’s it,

I would suggest contacting your mortgage company or CAB for help advice. You might be able to extend the length of you mortgage which could mean decreasing the monthly payment for instance. Re insurance for sickness -yep right - first they don't pay for several months (91 days??) second the amount they may maybe deducted off some of your benefits as extra income, third they will only pay for a period of time (about a year from memory) Third we are talking about permanent work so forget contracts or temporary. (Been there & done that but we were lucky - many moons ago - because work & health were recovered) Hope you get better soon Op - please get advice whether its debt advice CAB or through your mortgager.

@ivykaty44 - yes, there's a cap - meaning 1. the government will still be paying about 3 times the intetest on my mortgage and 2. I'll be struggling financially even more.
As a tax payer, I was quite happy to contribute to a system that payed interest on a mortgage as why would you want to kick people including their children while they are down? Why move them into a less stable situation while they are so vulnerable and why end up having to pay more money out? I'd rather help them get back on their feet than make them lose everything they have worked so hard to get.