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?

Years ago a couple on benefits took out a mortgage to buy their council property. I know because I did the paper so if it was possible 25 years ago maybe it is possible now.

Not sure it is although a good idea for people that are on social housing lists

It's only a few people who will benefit from this , most of the council housing has already been sold off anyway. Most won't get past the banks and maybe only one or two people would be eligible. The system is screwed , I heard two people on the radio today who are far more knowledgeable than I'll ever be say this too! Actual experts.

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

The crazy housing market as it now benefits very few. It's stupid people have so much of their income tied up in mortgages/rent. Think of how much more productive the economy could be if this money wasn't tied up in housing.

The Natwest already include universal credits payments towards the affordability calculation so they will get this past the banks. This will basically mean that extra money will be available to put into the affordability calculation people will be able to borrow more. And we all know what that’s gonna do to house prices.

I agree with one of the first posters that this is just distraction and won't help many.

But say it was a possibility. I rent my house out to a young working family who get some universal credits. I don't know the details of how much is for housing etc. They pay me £650 a month and my mortgage is just over £300 a month. Why would it matter that they could have their own mortgage? Currently I am profiting off the benefit and not them.

There’s no way Boris ran any of this policy past anyone at a bank, the Bank of England, Treasury or FCA. There are reasons there are minimum lending standards and those reasons mostly revolve around not wanting to bail out banks again.

PSA- directed at a range of people on this thread- not necessarily the OP. Noone in the UK is getting rich off benefits, they’ll be lucky if they get fed, clothed and sheltered off it.One of the least generous benefit systems in Europe

It’s bad being poor in the UK, and plenty of poor people are working just as long and hard (probably longer and harder) as the rich people. If you doubt that, have a quick chat with a nurse who works night shifts at a hospital and compare notes. The people on real benefits are the are the richest, I don’t blame them either really, they pay the tax they’re asked to pay and use the loopholes available to them- anything else would be financially irresponsible from their perspective.

If you think you’ll be better off on benefits, have at it! Life is short, it’s not very fair - maybe stop expecting it to be, noone will give you a medal for not taking more than your fair share. Certainly not this government, who let’s face it, are just the worst.

The whole scheme is senseless. No bank is going to lend to someone on such a low income unless the deposit covers a high percentage of the value. The government will have to underwrite these deals haha.
Also there are already big problems for people who bought under rtb and now can’t afford the ridiculous service charges etc that the leaseholders (council or HA) put on.

Right, but I still think ( hope) the banks will put a stop to it or at least advice the government as to why it's a bad idea! You never know. Maybe lessons learned from 07/08 ?
The post below is very honest !! Not often a land lord or lady is willing to say how it works for them.

so 2 scenarios:
option 1 person gets £800 benefits to rent a property. That’s paid to a landlord who pays a mortgage with it so that they eventually own multiple homes. .
option 2 person gets £800 benefits and pays their own mortgage with it. So they eventually own their own home.

honestly I think option 2 is a better and fairer option and reduces inequality. The problem is owning your own house comes with a lot of additional upkeep so whether it is viable I’m not sure. personally I think we need to totally reform the benefits system and make work much more attractive financially.

Gove this morning wouldn't say how many people it would benefit, only that they were going to discuss with housing associations. I suspect it's a very tiny number of people that will actually be helped by this, they need some popular policy and they are trying to look like Thatcher with right to buy, only back then housing was more affordable and council houses quite easy to get without the income criteria we have now. It's nonsense and I suspect will have the effect of upsetting more people than it impresses. To me it illustrates how they have absolutely no clue about housing challenges faced by millions in private rented accommodation.

Has anyone linked through to the other thread about house prices, and put the pieces together yet?

What happens to the squeezed middle, who get nothing given to them by a nonexistent bank of mum and dad, if everything gets given to those on benefits too? We have already been exploited by both sides for years.

This is exactly the kind of policy that New Labour tried - itself a follow on from the Tory right to buy; giving good public money away to trendy groups. It. does. not. work. Economically it bankrupts the country: socially it rewards the wrong people.

Those of us in that squeezed middle are already sick to the back teeth of paying for everyone else for the last two decades while watching the value of work fall.

I can't see it happening but it does seem unfair on private renters and those who own but are on small incomes.

If two families both have the same income but one family claims housing benefit while the other has a mortgage does it mean that the family who were claiming housing benefit will still be able to claim it while the family that already owned wouldn't?

I think the principal issue with this policy is that selling off much needed social housing is not solving the crisis of affordable housing for those in need. It is of course designed to keep red wall tory voters happy.

Option 2 sounds better to me too

I do wonder about the high LTV though, over 95% iirc

I thought after the crash this was better avoided

We should be demanding better social housing and not fighting over scraps thrown to a handful of people.
Not everyone needs to own a property, not everyone will be able to afford to maintain a property.
Instead of distraction tactics we need affordable housing and secure rentals.

They need to concentrate on reforming the whole rental market to make it fairer. In other European countries it is more common to rent. Even people with enough money still rent. We are obsessed with buying.

Nope , what a surprise eh?
They seemed flummoxed today.
It's not a way to run a country.

honestly I think option 2 is a better and fairer option and reduces inequality.

Option 3 is council houses, which economically recycles public money around the public purse, and still allows full rewards for those who work. This is the proven way of reducing inequality while maintaining fairness. ‘Fairness’ is a complicated concept that must allow people to gain genuine benefit from their own work, and without it societies fail, unless you are talking about creating an enslaved working group out of the only people who are prepared to act and live with honesty.

Yes build more council housing, why have tax payers money in the form of housing benefit enriching landlords?

& agree make renting more favourable, the trouble is our economy doesn't have much besides housing.

It is not more common to rent in most European countries actually. That’s another typical British lie that we are told, and then gets recirculated for years after on the modern internet.
The only countries for which this is true are Germany, and Austria: I’m not sure about Switzerland. All of those have very strong tenants’ rights to compensate, and even so are facing rising rents and social disputes as a result.

I’ve not voted as I’m not sure what you’re AIBU is.

You can’t get housing benefit if you have a mortgage.

So most of the people you’re annoyed at who receive housing benefit - can’t get a mortgage either.
So why are you annoyed.

Yes you can have savings but do you seriously think people claiming UC have savings of £16,000 when the threshold for claiming UC is not much - which is why you can’t afford a mortgage or get UC.

where I live most council houses are loads cheaper than non council houses especially if they are on an estate .
My sister has a lovely huge 3 bed council house its
worth around 220. The side garden is big enough to build a small house on

Go five mins up the rd and the same size house garden
but not a council house is worth a further 100k -150k

She is in the process of buying her council house at the moment
She will immediately have 84000 in a deposit under the right to buy from her discount
So she would only need a mortgage of 136k
so her mortgage would only be around £450 a month maybe less
her rent is £380
This is how they will get around the deposit issue the right to buy discount will be used as the deposit

it was the same when I bought my council house years and years ago

Definitely agree with this, they have to keep property inflated because otherwise it would become apparent just unproductive the economy is without it. Even if you just think about how much personal wealth would be slashed if people were suddenly able to buy a house in an average income.