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.

@PettyContractor - yes, that makes sense.

@PettyContractor - I don't think house equity counts as savings.

@UndertheCedartree I understand your point & yes, housing you if you were to lose your home would cost the local authority more & the upheaval would be stressful for you and your family...but it's still wrong.

Longterm, you hold on to an asset, partly funded by other taxpayers (many who will be in unsecured private rentals themselves). Once you're back on your feet, you & your family have a huge advantage over non home/mortgage owning families.

The fairest way would be to agree to pay your mortgage interest & agree a % of any profits when you eventually sell is returned to the local authority but I imagine that would be an expensive administrative task.

I'm not blaming you for your situation but there has to be fairness in the system. You shouldn't financially benefit from a tax payer provided subsidy. (Neither should private landlords but that's a bigger issue). You may not think you're benefitting & may not have much equity in the house now but that can change. You'd still retain a private asset & you'd have security & freedom not afforded to those in social or private rentals.

@Drabarni - I'm not moaning about it just discussing an issue. Funnily enough it's not just about me - I care about how this policy affects others too. Why don't I go into rented accomodation? Well, I'm seriously unwell at the moment and in hospital. Not really in a position to sell my house and move. All professionals are telling me to stay put, too.

I do think the current loan system is ok (except how incredibly hard it is to apply for) but interested in the reasons why the old policy changed.

Noone's picked up on supported accomodation tenants paying £800pm utilities/broadband on a 4 bed house with 5 tenants. Does anyone else think this is extortionate and the landlord is making a profit?

@Kamma89 - yes I can see your point. I suppose looking at my individual situation I feel my children have been through so much a bit of 'advantage' by living in their own home evens things up a bit. And personally I had no problem with the previous policy of paying interest on a mortgage as I wouldn't mind helping others in this way. But I can see why some would see it as unfair.

Goodness, talk about a misleading title. So just another private landlord bashing thread.

I clicked on here, because as a non rich landlord I was interest to learn how rich landlords can manage to get their mortgages paid by the government.

Then I see the government are paying people's rent. So not paying LL's mortgages then.

If a renter is in financial difficulties and can't pay their rent, then the government will pay it for them, regardless of who the renter is paying their rent to, otherwise the renter would be out on the street.

Are you seriously suggesting OP that if a renter can't pay their rent then the LL should suck that up and accept that the renter will be living there rent free.

I can assure you that if a renter defaults on their rent payments for other reasons than financial difficulty the government does, most definitely, not 'pay the LL's mortgage'.

When one of my tenants didn't pay his rent it took me six months to get him out of my property, during which time I didn't get a penny of rent from anyone, least of all the government. And he left the house in such bad condition that it cost me several thousand £££s to put it right.

Letting property to people fulfills a need and is a business like any other. If you live in someone's property, be that a private LL, council, or housing association, you have to pay rent and whoever the LLs are they make a profit. None of them is run as a charity.

In the same way, you don't get your food from a supermarket for nothing.

No one would start a thread saying that the government is paying for Tesco's (huge) profits because people on benefits go into Tesco and spend their benefits on food.

If there were no private LLs do you honestly think that all the renters, particularly those on benefits, would be able to afford to buy, of course they wouldn't. And as there would never be enough, council or housing association houses to rent they'd end up living on the streets.

@UYScuti

“Yes the government is helping the tenants to pay the rent,
For the landlord the tenant is a conduit to channel public money into the landlord's investment portfolio.
the underlying problem is that the government has allowed housing to become unaffordable, has allowed the housing market to become dysfunctional, markets should function in ways that benefit society not in ways that are socially destructive”

This, absolutely agree.

A home is a home, not a luxury. Whether that is your own mortgaged home or a council/social house. The housing “market” is now completely dysfunctional- not enough social housing for those in need but also private rents and prices to buy are out of the reach of a lot of normal people.

I think the government should pay interest on mortgages for those in OPs situation, but there should be an upper limit on the amount (as there is with housing benefit) so that people living in £500 mil houses can’t take the piss. If OP defaults on her mortgage then she could end up homeless with her kids, something the government should be trying to avoid.

£800 per month for a four bedroom house is ridiculously cheap! Do you mean per tenant?

As for the landlord, he/she would have worked very hard to afford to buy the property in the first place and will be renting based on demand. The landlord will also have to deal with squatters or people who do a runner and refuse to pay their rent. Its not always all roses!

Why do so many people complain about successful people?

@pigsDOfly - if you read the thread you will see I don't have a problem with landlords. However, if a landlord is getting a 2 bedroom rate from 5 tenants for a 4 bed house and £800pm for utilities/broadband are you really suggesting they can not pay off their mortgage? I have no problem with housing costs being payed therefore why would the LL have to suck it up? If people in financial difficulties get Tesco vouchers for food then I guess they are getting free food and Tesco is benefiting.

The government has allowed housing to rise to unaffordable levels
This property bubble then acts as a magnet for those who would like to profit from investing in property
If the price of faberge eggs or tulip bulbs had gone up to unsustainable levels (attracting investment which further fuels the bubble) it wouldn't be so much of a problem, but when it happens in housing that means ordinary people cannot access the fundamentals of life, ie a stable secure affordable home, no one can have a decent life without that

@Smith888 - £800pm for utilities/broadband for 5 tenants. The LL is paid directly by housing benefit so no squatters or people not paying for rent. I'm not complaining about sucessful people if you read the thread I said I have no problem with LL making money. The thread is about government policy around housing costs.

Did the landlord work very hard to be able to afford to buy the property, or was the landlord able to access cheap credit by leveraging the fact that they already own property?
Or maybe that's what you call 'working hard' smith88?
Sitting back while your Investments increase in value ....yeah that's really hard isn't it

I agree with you and think interest could be paid on a mortgage for an allotted period of time in order to help the occupants get back on their feet.

I say that as someone who rents out property to people on benefits. The rent money we receive does essentially come from the government which comes from the tax payers .
We provide a service and are financially compensated for it . We own the properties outright so there isn’t a mortgage to pay , the money is however saved for any renovations, future properties we may buy, our retirement , university fund etc
We pay tax on the income and should we ever sell , then we will also pay capital gains . If our children inherit, they will pay inheritance tax . The government has us all by the balls.

If we didn’t rent our properties to those who require top ups and own pets , where would they go ? Social housing requires the government to plan and take responsibility for it all . It’s obvious they cannot be arsed and are happy for the landlords to do their job for them . They make money out of the landlords too .

And landlords don’t work any harder than anyone else . In our situation we saved hard. Our first property was bought when we we driving shitty cars and our only holiday was a weekend in Portrush in the summer holidays . We made sacrifices to be where we are .

If Social Services (understandably) think it is best for the children to keep their current home then they may be able to assist you financially. They often pay housing costs for families with no recourse to public funds until their situation is sorted for instance and this can be quite long term.

Under s17 of the Children Act which promotes the welfare of children...

"financial assistance, which may be in the form of a loan, a cash payment, or payment in kind, for example, vouchers for a particular shop, or an item of food, clothing or furniture;"

Have you spoken to them about receiving assistance so that you don't lose your home? It would make sense for them to help given what they are saying and they do have this power.

@UYScuti

You seem to be very angry towards LL's. Out of curiosity, why?

We provide a service and are financially compensated for it
You have monopolized resources which are unaffordable for ordinary people because the government has allowed an asset bubble to develop
You are then able to leverage this privileged position because people have no option but to pay through the nose for a roof over their head
But yeah, just keep telling yourself that you're a philanthropist helping out the needy

It is shit to be in your situation, OP. I've been there too. There's no help with mortgages for nine months, not six, and it only covers the interest part (which is set at a pretty low rate which didn't even cover my interest).

I do understand that it is unreasonable for taxpayers to cover the repayment part of someone's mortgage. Years ago, the set interest rate they paid was over 6%, so when base rates were cut drastically the government ended up paying towards people's capital repayments too. This was reviewed and the rate cut by several percent, then it was made into a loan too). I even understand that it's reasonable to ask people to repay it, as at the end of the day you're gaining an asset you can sell when it's paid off, unlike renters. But making families wait nine months is disgusting. It meant that I had less than £150 a month to cover absolutely everything else for three of us - gas, electric, food, transport, clothing. To say it was a struggle is an understatement! Yet if we'd lived in rented accommodation, we'd have most of our housing costs paid for from day one. We were almost made homeless, which would have cost the taxpayer a lot more, surely?

GallusAlice, I am pointing out injustice and exploitation, our dysfunctional housing market is problematic and destructive, it is important to examine what is going on here

It's obvious they cannot be arsed and are happy for the government to do the job for them
Yep the government has used landlords to do their dirty work for them, they dangled that carrot and you all piled in

I am a LL. I chose to save up a deposit for a flat (£39k), and had to pay as additional 3% additional dwelling supplement, on top of the 3% stamp duty (circa £9k).

I made a choice to save the cash, and to take on additional risk to buy another property. Am I compensated? So far, yes. However, it was expensive to do, and I wont recoup my outlay for many, many years.

I rent to a young couple who don't want to buy. They want to live in a particular area and pay a set amount each month, without having to worry about the costs associated with home ownership. I previously rented for the same reasons.

Be annoyed at government policies.
Be annoyed at the lack of social housing.
Be annoyed at unscrupulous LL's.

But don't make out like all LL's are societal parasites, because you're wrong.

Of course landlords are not parasites I didn't say that they were, they are 'rent seekers' and that's a totally different thing :
Rent Seeking
By CHRISTINA MAJASKI
Updated Aug 28, 2019
What Is Rent Seeking?
Rent seeking (or rent-seeking) is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity.

UYScuti

I provide energy efficient, safe homes for tenants who don't want to own their own house. I charge under market value; this fixed monthly rate is never raised during their entire tenancy. They have stability and security.

I cover costs such as insurance, maintenance, repairs, decorating as needed and my tenants are very happy I provide this service.

The lettings industry is just that - an industry, a much needed cog in the property market. I'm an ordinary person, I worked an ordinary job to save and buy my properties. Why shouldn't I?

UY- I don’t pretend to be a philanthropist, we bought property to make money. No other reason.
I don’t want to rely on a government to look after me or my children so we are planning for all eventualities.
Interest rates are beyond crap and we wanted a way to make our money work for us . If interest rates rise again then property wouldn’t be as attractive an investment . Perhaps we’ll just stick it in a high interest saving account and do nothing.

We took the carrot . Should we want to sell the carrot , the government will request 40% of it back .

@Sargass0 - Social services have given me money/vouchers for food and food bank referal. They've not given me money as such for the mortgage but I suppose if I have less money to find for food then I can pay towards the mortgage. They have refered me to CAP (Christians against poverty) which will hopefully be a huge help.
@Roomba - I completely agree. Making us homeless costs the government more. But yes, the loan seems fair enough. But why do we have to wait so long to get it. I've been trying to get it for 2 years!