Gordon Brown Offers mortgage holiday

[Blinglovin]

www.ft.com/cms/s/0/39ab3296-c143-11dd-831e-000077b07658.html?nclick_check=1

You can be behind on payments and reposessed when you do have equity too you know!

and then the banks sell as cheap as poss to get their cash back asap, they don't protect the equity.

Do they give you back the difference?

guitarheroine - only if you fail to discuss things with the bank and sell up on time to retrieve any equity there.

Might have confused the second mortgages with second homes. I guess the people who just treated the rising value of their house as free money that should be spent ASAP need to be bailed out!

Seriously a £400,000 house or flat is well out of reach for most taxpayers. Why the hell should we have to subsidise people living in that kind of luxury?

With respect, yes they do give you back the difference and if you bought before 2002 it's not real equity anyway is it ?
I'm sorry but for people who's homes have doubled in price over the past 8 years (and there are plenty, check out www.ourproperty.co.uk), it's bullshit. House prices should increase at a steady rate along with wages, they haven't so it was fools gold i'm afraid, as many should be finding out and no doubt will, the devils in the details, this headline grabbing rubbish won't save Labour.

Even if you are in reciept of benefits HB often doesn't cover your whole rent so you still have to find the extra.

Each LA has a Rent Officer who decides the local rent level and it is often less (sometimes significantly less) than the actual market rate.

i don't see the problem with this, surely it's better to give people who have (or will) lost their jobs a chance to gain other employment and keep their house.

repossessions in the 80s were horrific

South, the problem is instead of spending money on bailing people out they should be spending money helping people to help themselves.
If the money went on say building social housing for example, it would create jobs in the construction industry, provide homes for people currently being housed at great expense in bed and breakfasts.
The other key point is that this scheme will be available to people with 2nd homes, buy to let mortgages and £60k in savings.
Do you are a tax payer feel happy about that ?
The other point is that this will not end in 2 years, then what ?

South, the problem is instead of spending money on bailing people out they should be spending money helping people to help themselves.
If the money went on say building social housing for example, it would create jobs in the construction industry, provide homes for people currently being housed at great expense in bed and breakfasts.
The other key point is that this scheme will be available to people with 2nd homes, buy to let mortgages and £60k in savings.
Do you are a tax payer feel happy about that ?
The other point is that this will not end in 2 years, then what ?

I can only speak about where I live; almost all new social housing here is one or 2 bedroom flats, ie, not family friendly (and yes I know how difficult it is for single people without children to find accommodation which is affordable)

These mini estates are often a mixture of quality accomodation for buyers and somewhat less so for the social housing element. The private sector bits are then sold on a buy to lets - the real scourge of the housing market imo.

BTW - I am not bitter just cynical

but we're meant to build 5,000 new homes in our borough alone by 2012 they are being built.

as i understand it though, aren't they just going to defer interest for two years. it'll still have to be paid, but may give people a chance to get back on their feet again. what's wrong with that?

It's not doing these people any favours for a start and if they don't get back on their feet you will be paying for it through your taxes, assuming you have a job and still have one in 2 years time.

pay for enough things in tax that i don't agree with and don't see a problem with giving 'these people' this break.

I'd be amazed if this really was going to apply to 2nd homes. Even Gordon's not that much of a fool, surely. The details haven't been announced yet - where are you all getting this stuff from?

Interestingly, the government has said the banks have signed up, whereas the banks themselves have vaguely welcomed it but have said 'Er, we're still reading it, actually.'

Like everything else Gordon has announced in the last few months, when he first says it everyone goes 'Wow! That sounds really audacious, it might just have an effect!' Then 15 minutes later when the details are announced (and the banks reveal what they are actually signing up to) everyone realises it was all hot air with precious little change.

It's just like before when Darling said he'd make the banks lend out as much money as at 2007 levels. Yeah, and how are you going to do that? 'Well, I'll have a jolly firm word with them and make them feel embarrassed.' [sound of banks ignoring Darling]

Playing with other people's money - again!

Jimmy I actually think it applies to people who have remortgaged not BTL's or holiday homes, which in some ways is just as bad.

The point is those people who are responsible and save are being screwed again.
Look at the figures

200K mortgage which is a high average
6%, £1,000 per month interest.

50,000 people use the scheme 2009-2010

of those 50% never repay anything after two years

25,000 x £24,000 = £600 Million

That's a lot of hospitals/schools/teachers etc etc.

"The point is those people who are responsible and save are being screwed again."

So, what's the alternative? Those who lose their jobs and who can't afford to save because they're on a low income lose their homes too?

Not being able to save money doesn't mean you are automatically irresponsible.

I agree with you KatieDD that the most responsible people are not considered important by this govt - they want people who will spend, spend, spend. (Though to be fair unless some do the recession is going to be a lot worse.) Would have thought 50% is an unlikely high number not repaying anything after 2 years, however.

As far as I can see there is likely to be one side effect of this which would backfire nastily on the government: this means less money going in to the banks for a while (as people stop paying the interest). That missing money is not supplied by the govt unless and until the mortgagee is unable to afford to pay again after 2 years. Mortgage lending is not going to be able to increase again while that is the case - in fact this may cause it to decrease even more, having more downward effect on house prices.

No it doesn't because the truth is this is only going to help those with between a £200k and £400k mortgage.
Up to £200k the government pays the interest anyway, you don't have to pay that back it keeps a roof over your head for 2 years.
Where this will supposedly help is if the money you receive for the interest only part of £200k is not enough, so over £200k and less than £400k.
Frankly if you are in so much trouble that you cannot cover the difference the best thing to do would be to get rid of the house by whatever means, dropping the price down to 2001 levels if you can or taking a loss if you can't and then starting again in 2 years time after the prices have crashed.
The home owner could have their rent paid for them in the meantime, clear any debts and start again.
With this scheme it prolongs the whole agony of people staying in a house with a mortgage they can't afford.
Most people who are reposessed because they have other debt, holidays, wide screen TV's, new cars etc.

People on low incomes will be screwed too, they will be paying taxes towards keeping people in a £400k house, how will they feel ?

but alot of people are or will lose this jobs in the next couple of years. it's not their fault it's the state of the world.

No it's not their fault, unless they are up to their eyes in debt in which case it is their fault.
Redundancy insurance is available to help these people, they should not be helped by the government, that is not what benefit etc are for I'm sorry it just isn't.
And most importantly it will not work, the interest will be compounded for those who do pay so it'll add £24k x 3 to the mortgages of somebody with a £200k mortgage.
Far better to knock £75k off the asking price get rid and start again having 2 years of housing benefit.

but you're talking about family homes.

I reckon it'll be far cheaper than housing all those families in B&Bs for years after their homes have been repossessed. and far more constructive in terms of society.

I despise the view that to get into debt you must automatically be irresponsible. There are those who use credit as a means to get by.

Lots of smuggery on this thread.

anything can be a family home - including rented flats

nobody needs to own a 400k house or flat

but it could affect anyone with a mortgage not just with property worth 400k