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?

It's one thing buying them, but given how shoddily HA properties are built (or the ones where I live anyway), it's another finding the money to make good a never ending list of problems.

*then which lenders would actually agree to a mortgage for those living on benefits or topping up working low salary with benefits? None have stepped forward

often many on benefits have had troubles with money, it’s just the way things are, so without a decent credit score, if they can find a lender into this scheme the likelihood of passing a credit check maybe low

where in the country can you find a house cheap enough to be purchased on working benefits - which top out for a single parent with childcare at approximately £40ish grand - but affordability reduced due to nursery*

I got a mortgage as a single working parent on low income + benefits on a 3 bed house that cost less than 100k in a small city. It's not completely impossible!

Folk on HB are some of the very lowest earners, they will, with fuel and food inflation have no spare cash and at present will have repairs etc paid for by the landlord.
Once they are "owners" they are at the whim of interest rate rises and repair costs... which they won't be able to afford.

This policy was first announced in 2015.. so unless Sunak has a shit load of cash to bank roll these buyers, it won't happen.

It really fucks me off this crap... there are real issues we face as a country, but oh no this blond twat comes out with bullshit policies that until he trumpeted them, no one else had thought about.

They are living in another world..

Don't think it will work overall because I can't see the mortgage companies taking the risk.

But in some ways it's a good idea if it allows or gives people a reason to improve their situation. It would be their house not some scumbag/faceless landlords.

It's going to get battered fraud wise though because the capital gain of the property, especially in areas such as London, will be even more attractive than the £ paid in housing benefit.

As for a housing crash? Supply can't keep up with the ever increasing demand. I'd expect a correction especially in areas where there was WFH related buying but whilst we keep expanding the population without a massive increase in building, the prices will keep going up.

I would love this. I have been in temporary accommodation for 4 years now coming 130 when a property comes up on the list.

My doors are hanging off their hinges, I have cockroaches, a big hole in my bathroom floor, black mould and the landlord doesnt care. Neither does the council.

To think that I could have the possibility to buy a house?! I cant fantom it.

Why not just build more Council housing?

Because that would reduce the pressure / reliance of private renting and some tory donors people are making a hell of a lot of money in private rentals.

It would, of course, be an awful lot better for everyone else though. Particularly in areas (like mine) where there is a real shortage of normal sized family homes.

It would be ridiculous to allow housing benefit to be used to gain a mortgage, but allowing people to claim it after having an affordable mortgage and then having a no fault drop in income would be a positive thing. It’s a shame that’s not what they’re focusing on.

I agree with this.

The policy is fucking stupid, they have just pulled it out of a hat to try to get the media talking about anything but partygate/confidence vote.

The worst is it will only make the housing situation worse in general

I think it's more a case that those who own homes can claim housing benefit which they cannot currently (it's a loan at best now). Take the example of a woman with two children divorcing and has £50k equity from the sale of the marital home, she can put that £50k as a deposit on a new house and claim benefits if applicable (in this example she's working pt with very young children so qualified for hb if renting)

Well you'll need to get higher than 130 on the list and actually get a HA or council property before you even consider it. You'll then have to live there for x amount of years before you get the right to buy and enough discount for the lender to consider it a deposit and then you'll have to pass the mortgage affordability checks. Given you are in temporary accommodation, do you think all this is feasible?

Peston on why it is probably just a load of hot air anyway:
twitter.com/Peston/status/1534917117035827201

Oh yes, what a good idea. So you work, pay into the system, save a deposit pay a mortgage. But if you dare to fall on hard times or have an accident or get ill you lose your home and are forced to rent and in the long term cost the tax payer far more than you would staying in your own home.

My understanding is if you would currently be entitled to £650 a month in housing benefit that they would pay for a rental property for you then they would include that in an affordability statement and add it to whatever income you’re getting at the moment to calculate what you could borrow to purchase a house so you don’t need to worry about housing association or council lists …. you need to focus on getting yourself into a really good position with a part-time or full time job paying as much as possible and then they will allow you to use your housing benefit to top up to a level that could potentially allow you to purchase a home.
you’re going to need a 5% deposit and of course fees are around about £2000 as well but if you can do that, imagine your own front door.

Another expert on with Eddie Mair lbc radio just now , he was overly cautious about it all and admitted it's more about the soundbites than any actual workable policies
Plus many won't benefit either as they are renting in private rentals , they are overlooked.

Wasn't this done in USA...Fanny mac mortgages..something named like that..most defaulted after a few years and lost their homes.....

I claim benefits because I cant hold down a job due to my disability and I feel very guilty that other people are working to keep me alive. Im sorry

Fanny May and Freddie Mac. Also known as subprime lending. It was the trigger for the last recession in 2007/8.

It's an ill thought out scheme anyway - sub prime mortgages anyone?

This is a chunk of populist meat thrown to the masses to a) detract from everything that is going on; and b) to pit one section of the population against another. Sadly it seems to be working in some cases.

I do think people should be able to claim towards their mortgage. Otherwise it's all going towards landlords' mortgages, which everyone seems fine with.

My cousin had a stroke in his late 30s, shortly after buying a house. He was in hospital/rehab for months and unable to work for about 3 years. He couldn't claim housing benefit towards his mortgage, so ended up having to move back into rented accommodation. The rent was more expensive than his mortgage payments, but he could claim HB towards it.

He's now back at work, still paying a lot in rent (now without UC) and unable to afford a deposit to buy again.

All because the government were happy to pay off the mortgage of his landlord - a rich man who owned around a dozen BTL properties - but not of a regular person who had fallen on hard times.

Cross post!

I’m not against it in principle as trying to own is ok. But I don’t know enough about HB or savings and how it will work but the LTV rate makes me think of the recent crash and why mortgage rates had stricter criteria

I’d need more info on risk of default

So you work and you earn above the threshold for benefits.

Other people don't!

And, as an adult, what is "fair" when it is at home?

Of all the things announced today that is the probably the most ridiculous to focus on!

DH and I also claim benefits because he is too disabled to work and I am his carer. We own our home outright after many years of mortgage payments. Don't let the bitter and twisted posters on this thread get to you and don't feel guilty.

It has been done for no other reason than to prop up the housing market, if you keep first time/bottom of the chain purchasers in plentiful supply all will be well, as soon as people at the bottom of a chain are unable for whatever reason to purchase, the whole market goes.

So yes, it may to some seem unfair, but it benefits the majority.

It makes no difference to the cost whether HB is paying for a new mortgage or an existing one though, does it? Or to the fact that public money is helping someone buy a house. Why would you consider one ridiculous and not the other?