To think being able to use housing benefits as a mortgage is unfair?

[blahloney]

I’m actually feeling quite annoyed. I currently work full time, don’t receive benefits but cannot afford to buy a house despite my rent being more than a mortgage. How is this fair?

I can see it’s annoying, but in the grand scheme of things a lot of rental money is already paying a mortgage, the land lord’s. I’d rather see it go to the home occupier.

This isn’t a group of customers anyone wants. The risk of delinquency is too high and with minuscule deposits so is the risk of the bank not making its money back if they have to repossess and sell the property. Having too many customers like this destabilises your lending book and puts the safety of the bank at risk.

Subprime all over again. As has been pointed out several times on this thread already but some posters seem to have their fingers in their ears 🤣

Oh dear.

@Nothappyatwork defaults soared. This is why the government had to bail out Northern Rock, RBS, Bradford & Bingley etc. Northern Rock was particularly exposed to high risk residential mortgages.

Some people will be able to benefit from this - if they can get parents to provide help with the deposit. I think it is a good idea but can see the limitations.

for those against it - as has been said. Many people in UC work full time and a lot of housing benefit is already paying the mortgages of second home owners.

Then it should go via a publicly-owned council house scheme. As already stated.

No one who works for a living, with no other means of income, who has worked their way through life against the odds, is going to happily stand back and watch their tax money being converted into assets for those that did not forever.

You should be more worried about the private landlords of those that do not get any support from the state.

Its bonkers.

Its yet another fucking policy to increase housing demand, without increasing housing supply, all it can possibly do is make housing even less affordable relative to incomes by pushing up prices.

The only thing that will actually improve housing affordability is to significantly increase supply with state intervention (the private sector will not do it on their own, why would they erode their own margins?).

I seem to remember that was much later on and something to do with the banking crisis, the policy that allowed people to remortgage rather than people who just took out 100% mortgage on a property that was three times their salary and paid it off.

i’m talking about people who took out 100% Mortgage is in 1994.

In fact it’s really odd how the support and love for private landlords usually shown on this site has suddenly evaporated for this one group - but I doubt very much that any dislike expressed for private landlords will be tolerated in general.

For all those bashing people on benefits "cos the government are going to buy them houses" . You fell for it, the propaganda worked. They made you believe It's not the government that is making your life miserable, its other poorer people

It’s a pointless sound bite and an impractical, unworkable policy. Yet another example of the chasm between the Blob’s version of reality and the electorate’s real lives.

this is not going to fix the housing market.
build more social housing. That’s it. That’s all they need to do.
Leave it as a state owned asset as previously mentioned. don’t sell it off

there would be slightly fewer renters which may free up those houses bringing the private rental market down. That would then turn people off buy to let slowly, and some landlords will sell up meaning you some of the families are able to buy.

we don’t need more people buying up social housing.

Boris' speech has done it's job.

It's got folk fighting online amongst themselves about benefits and entitlements.

@Nothappyatwork yes the banking failures I mentioned were in the 2008 crisis but those mortgages would have been originated in the 90s onwards. Defaults are lower now than in the 90s as regulation was pretty lax back then.

The reality is this policy is not going to help many maybe any.

This is so so strange. My DH and I had a combined income of 75k in 2019 (it's more now). We were able to borrow £330k to buy a 1930s 2 bed flat in London and I didn't even have permanent residency in the UK (only been here 3 years not counting university)! No kids as we were 27 and 29 respectively. We had a 15% deposit that we saved from living with family for 3 years.

We had a mortgage broker but only because my DH's employer paid for it.

It does affect other people if people don't work. I live in South Wales our council tax is higher than some parts of Cardiff and London because no bugger round here works!!!! Subsiding everyone else's CT meanwhile we struggle to pay.

They really were lax, even in the UK. In the early 90's I worked for a Financial Advisor who arranged mortgages, life insurance etc.

You could get 110% plus mortgages, you just had to say the excess was going towards improvements in the property.

@Whirlygiggles it’s crazy to look back on now isn’t it! There was barely any oversight of the industry either, even the predecessor of the FCA wasn’t established until 2001.

Wow, where do you live?!

If the Tories really wanted to help poor people, they would introduce a Rent Cap on private rented properties, maybe no more than 10% of whatever the Local Housing Allowance is currently for that area.

Literally the first mortgage I got, I had to take in a letter on headed paper from my boss he was about 24 , signed to say that I had higher earning potential and he anticipated I would an XYZ figure off that they calculated it. I was extremely cautious borrower —a damn fool in hindsight—

I do think the idea of excluding savings in LISAs when considering UC eligibility is a good one. I've seen posts on here of people being left an inheritance to put towards a house but because they're on benefits they just end up having to come off benefits until it drops below £16K so doesn't benefit them. It would be good if the money could be ringfenced in a LISA so that if their circumstances improved and they were able to work again they'd not have lost their deposit.

Endowment mortgages were around this time too I think.

When the UC rules were drawn up the government refused to allow people to ring fence savings they had while claim tax credits for a house deposit. You can get boy have the savings for 12 months. The government’s logic was benefit claimants wouldn’t be able to afford a mortgage anyway.
Now they have admitted they are wrong?