Friday, Aug 13, 2010
Support for Mortgage Interest reduced from 6.08% to 3.75%
The Daily Telegraph: Repossession threat as Government reduces home owner support
This support is paid at a fixed rate, meaning that more than 90% of recipients currently not only get their mortgage interest paid but extra money in their pockets. Charities warn that many home owners will be left with a significant shortfall in their income from my taxes.
Posted by monty032 @ 08:55 AM (2050 views) Add Comment
60 Comments
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1. str 2007 said...
There was a similar article yesterday and frankly I couldn't believe they paid the 6.08 percent rate for interest even if the claimant was only paying 3 percent.
Typical Labour waste.
2. khards said...
Do you think that reducing these overpayments will repossessions much?
3. Sirmungo said...
the 34 people who have used this scheme since April 2009 wil be gutted.
4. tyrellcorporation said...
It never ceases to amaze me what went on at the height of the Brown 'I need to get re-elected' panic period. Some serious legislation needs to be drawn up which prevents this type of scorched earth policay making in the future.
5. wiltshire said...
“Your home may be at risk if you do not keep up repayments on a mortgage or other loan secured on it”.
6. estrader said...
They shouldn't get any support at all. Whatever happened to the idea of ADULTS taking full responsibility for the choices they make?
7. uncle tom said...
str 2007 - my thoughts entirely.
There should also be a strict time-out element for this benefit, as interest rates are a combination of real interest and inflation; and it is not fair to expect other tax payers to foot the inflation element of your mortgage interest payment indefinitely.
Fair to help people adjust to unexpected circumstances, but reasonable to expect them to secure new employment - or adjust their lifestyle to fit their means - within a year at most.
8. techieman said...
str 2007 - off topic - responded to yours on the "landlord thread". http://www.housepricecrash.co.uk/newsblog/2010/08/blog-fear-takes-hold-29816.php @ 31. .... As for the beers - well shouldnt we leave that until we have 20%+ falls from the DCB high to celebrate.
[of course i mean IF and when - lets not do some chicken counting - wave counting is difficult enough for me]
9. mark wadsworth said...
Repo, schmepo.
I don't want to see people homeless any more than the next man, but we scrapped all these Home-Owner-Ist welfare schemes (except for very short term, time limited payments) and there were 200,000 repo's every year, it would be a doddle to build 200,000 new council houses every year (if you lose your old job, at least you can get a job in construction, natch) and allocate them.
10. mark said...
MW
that sounds like a ponzi scheme, homeless build houses to live in while building houses to live in while building houses to live in while building houses to live in while building houses to live in.. eventually it will collapse
11. mark said...
What i would like to see is a change in the planning laws as follows
1) Open up empty land for building
2) land can only be built on by self builders
3) each plot must be between 1/10 and 1/4 an acre
4) after it is built You must live in house for a min of 5 years
5) during that 5 years you cannot sell or rent it
7) you can only build 1 house every 5 years
8) You can swap a house for another area if you need to move for a job, if there is no swap available tough you made the decision to build your own house so stand by it, after all you are an adult
this would enable people to have quality housing without speculation
Your views?
12. uncle tom said...
"that sounds like a ponzi scheme"
Not at all - we have two immediate short/medium term issues to deal with that can be dealt with in tandem.
One is the lack of employment, and the other is a slight under-supply of housing.
Get the unemployed building homes and you can cure both ills; while making longer term plans to bring the economy into a sustainable mode with adequate permanent employment.
It's a no-brainer really..
13. khards said...
This will add to the 2 million on the council waiting list because they can not afford a house.
One wonders at what the tipping point will be for the number of people on council waiting lists? 10% 6.1 million?
I do agree that building houses = lower unemployment = lower prices = healthy economy
14. mark said...
what happens if they keep losing their houses, do they simply keep building more houses? when will it end when all private housing stock is empty and everyone lives in council houses, then what happens to the jobs?
15. mark said...
Building houses and stock markets do not create anything
manufacturing does, make products which people use, have a life span, other people will buy including export, this is more constructive to an economy than housing and financial markets
16. uncle tom said...
Mark,
Agree re. self build.
Use surplus MoD land, and have a catalogue of pre-approved designs to choose from to cut down on architectural and planning costs.
Invite architects to submit designs for the catalogue, and pay them maybe £500 each time their design is chosen.
However, if the self builder doesn't like any of the pre-approved designs, he should be at liberty to engage an architect and submit his own design to the local planning authority.
17. estrader said...
Stock markets exist so that companies can raise capital and expand. Investors take risk by providing the capital companies need to expand. Campanies expand and investors are rewarded for the risk they took, so finacial markets ARE constructive.
18. mark said...
Britain didnt get the empire without manufacturing..
although we lost it..lol
playing with paper money is not constructive..
small companies survive without debt and raising money whilst risking it all..
the stock market is what the western economy is built on total BS..
I see it daily it is total BS
19. mark said...
uncle
that is an interesting idea I wonder how much empty MOD land there is, acreage?
20. uncle tom said...
"Building houses and stock markets do not create anything"
Building houses creates homes.
Stock markets provide investment capital for business, where the element of risk is too great for conventional bank loans.
Both are essential parts of the economy.
21. mark said...
both destroyed the world economy
22. estrader said...
Uncle tom, you are wasting your time. Mark says it is all BS, so it must be true. I enjoy putting my money into BS, it pays well.
23. mark said...
i didnt know jeremy beadle died in 2008 wow how did i miss that.
24. uncle tom said...
"that is an interesting idea I wonder how much empty MOD land there is, acreage"
In total the MoD is sitting on enough land to build about 5 million houses - over 3 acres for every member of the armed forces.
Given the nature of modern warfare, I would suggest that at least half of that is probably surplus to requirements.
25. estrader said...
Mark, stop posting...please.
26. mark said...
I invest a lot into BS, thats what led me to believe it is BS
i am entitled to my opinion it is interesting to see how people react when one has an opinion.
27. mark said...
estrader you seem to have an issue with me??
28. estrader said...
You are posting opinion as if it is fact. If you added IMO to what you wrote it would be tolerable.
29. mark said...
Uncle so effectively we could add around 1.5million quality homes which people will be proud of and feel at home in
30. techieman said...
"manufacturing does, make products which people use, have a life span, other people will buy including export, this is more constructive to an economy than housing and financial markets" - surprising comment.
Without finance companies cannot make products, competitively or effectively, expand etc etc. Sure they could use bond / loan finance rather than equities, but this you will be in default if you dont pay the bondholders. Shareholders on the other hand can see dividends disappear if time gets hard and that is the risk they take.
Also how exactly are they going to export without support from the financial sector - eg insurance? And what about the use of factoring by small businesses?
So yes all part of the capitalist society. If the financial sector - admittedly in its pure form - didnt exist, then trade would be much more difficult. You can still do calculations with an Abacus, but isnt a dell and an MS spreadsheet more sensible?
31. mark said...
OK Estrader
can you tell me how financial oblivion happened to cause credit crunch
was it housing? was it stock markets? was it leverage?
32. inbreda said...
mark@11 - we used to have a system whereby you couldn't take profit on the sale of a property if you had owned it less than 5 years. They scrapped it fairly recently and prices boomed a bit more. Honestly - the government in guernsey is so retarded they are regressing.
33. mark said...
inbreda
how did they enforce it?
did it work when it was in use?
34. estrader said...
mark said...OK Estrader
can you tell me how financial oblivion happened to cause credit crunch
was it housing? was it stock markets? was it leverage?
------------------------------------------------------------------------------------------
Mark, your question is (no offence) non-sensical. That is almost like asking - What is responible for wars: guns, bombs or tanks? There are many good historical articles that explain boom/bust cycles. We live in a capitalist society, I believe in free markets and little or no government interference. The competent succeed and the incompetent fail. That is what I want. The governmet should only be there to enforce laws.
http://en.wikipedia.org/wiki/Ayn_Rand
35. techieman said...
"both destroyed the world economy" - nope thats like saying that guns kill people. People kill people, they just use guns to do it.
So people destroyed the world economy not stock markets or houses. This actually is getting a bit surreal.
36. str 2007 said...
MArk
Re: the self building.
Yup, close to spot, in fact have you pinched half of that from me or do great minds think alike - some might say idiots never differ. LOL
Tehieman
Ok 20% falls it is.
37. mark said...
str2007
funnily enough the idea came to me when I was sat on toilet this morning
38. str 2007 said...
Techieman
Cheers for the reply on the other link.
Mark
Not sure I'm entirely comfortable with you tapping into my thought processes whilst on the toilet.
I feel invaded - LOL
39. mark said...
lol
I usually play on my iphone while on bog, but i have found i have a new skill invading peoples minds..lol
40. techieman said...
str2007 - you're welcome, now as for the dollar.........:)
mark - TMI
41. quiet guy said...
What I don't understand is why the benefits agencies don't put a charge on the claimant's property to recoup some costs. Even allowing for losses to inflation for long term unemployed, this would save serious money. In effect, a claimant would get an interest free loan to service their mortage interest; no families kicked onto the street but less mortgage freebies for borrowers.
42. techieman said...
Mark if you want to get the cycle argument - you can see this at the link i posted to @ 8 here for str2007. Once read you will understand why personally i think its going to be difficult to buy shares and make money.... unless they are in short ETFs or unless you get one of the bear market rallies and can get in and out during it.
Its also a good read about the reasons why stock markets went so high - the "mania" argument
Of course this (and i) could be completely wrong. But we shall see.
43. mr g said...
@Quiet Guy "What I don't understand is why the benefits agencies don't put a charge on the claimant's property to recoup some costs. "
Therein lies another basic problem with the public sector, no one gets a handle on what's going on and manages it.
44. nickb said...
Mark, Techie et al,
The fundamental problem is that the financial system (debt based money lent out at interest) requires the economy, on trend, to grow, in order for the system not to collapse. Most people on here don't seem to think that is a problem, but I do. First off there is peak oil. Second off there is climate change. If you accept either of these, in line with the scientific evidence, you can't rationally approve of the continuation of a financial system which requires growth.
Nick
45. techieman said...
nickb - well the link i have showed depicts basically what you say in a technical manner. The mania finished and the only way to perpetuate it was to get more and more debt - inflating the true prices. Thereafter it was a matter of time before collapse.
However - i was defending the "pure" financial system - i.e. ex the CDOs etc. as a necessary support mechanism for business. I know the Chris materson [spelling] arguments re peak oil etc., but it then makes you wonder why oil has come off to 70 odd from 150. I have watched the "crash course" myself. All very good when oil is going to $150 but what now? Same really with his money supply arguments.
Of course its a good watch but markets (like HPs ) do their best to make the sensible people wrong for long periods of time.
Technically the argument is that prices will deflate until they dont. Oil for example is looking at some lower moves, but in the next couple of years or so we should see a great move up in oil.
46. nickb said...
Techie,
I think we have to take a longer term view. The financial system even in its "pure form" requires physical growth on trend for interest bearing loans to be repaid without asset price bubbles. You could have that "for a while" without fossil fuels if we somehow managed a transition to renewables without crashing. But energy efficiency is bounded at one. So in the long term, it seems to be energetically impossible. And in the short term, emissions are supposed to peak by 2015 and fall thereafter to have any reasonable chance of staying below a 2C increase in global average temps.
Nick
47. techieman said...
nick - i cant disagree with your timescales or points made. I thought i was agreeing with you - for example re oil. Short term the view is that the price will fall to reflect the reduced demand. However after falls, in the next couple of years prices will rise as demand gets better or stagnates and supply gets tight.
Re interest bearing loans / bonds yes i agree with that, but the point was being made that equity can have no interest paid as dividends are withdrawn, although capital has been injected, whereas debt must be serviced. The overall issue was there is no place for financial instruments in our society since they dont produce anything. To me its a resource, like labour and like raw materials. Without that resource business cant expand or even be undertaken.
Perhaps that is your point - that business cannot expand any more since we have reached the nadir of natural resources. But really thats not what i was driving at.
48. techieman said...
Nick : take a look at this and you will see what i mean: http://danericselliottwaves.blogspot.com/2009/08/p2-massive-grand-supercycle-backtest.html
49. jack c said...
@techieman
off topic post
Couple of points on the markets - Felix Wintle (Neptune US Fund manager) has just turned bearish and is expecting a sharp correction whilst Julian Gibbs @ Jupiter has reduced his US exposure. That Hindenburg thing we were talking about the other day is making it into the professional financial press today (well it is friday the 13th)
50. nickb said...
Techie,
> Without that resource business cant expand or even be undertaken.
This is circular since it presupposes businesses must grow. If in the long term we have to have a non-growth economy, it's no longer tenable for businesses generally.
There have been economies in the past that did not have interest-bearing assets, very different to ours of course, but people survived.
It may sound very weird to be talking about a non-growth economy, but not more weird than the elliot wave stuff ;-) (which I'll happily admit to not understanding. It makes sense that financial cycles are fractal and nested, but this seems like looking for patterns in clouds to me. I could well be wrong though, clearly that stuff is all rather technical.)
Nick
51. techieman said...
thanks Jack - I looked at the wiki hindenburg thing and am not overly impressed. Its a bit complicated for my small brain to do the calcs - and im not sure i need to.
Expect a few sharp retracements along the way but i do think its unlikely that we see the recent 5430 level breached to the upside now for a "while".
If we do then it will be brief. Of course a "while" might be a long while or a short while - although i normally prefer the short side on this occassion i go long :).
As you know my ideal target before we came off was high 5400s but that was scuppered this week. A brief rally for S&Ps to go over the 1100 level would be great to add shorts in my opinion, but as i said the market dont give handouts.
52. techieman said...
Aha - but nick when you say grow what do you mean? Growth of GDP is measured in monetary terms, so if the amount of money contracts then so does "growth". The point is that the model i have shown (and i am not getting emotive - i can of course understand why people dont believe it) is saying there will be a deflationary depression, caused by contracting growth.
But thats not the same as what was being discussed earlier - all that was being discussed was that there is no place for finance in the modern world. My point is capital facilitates business. Now whether we have had too much capital (IMO yes) and grown too much (yes) on a bed of sand (yes) only perpetuated by the creation of an inflationary debt bubble (yes) then thats a different issue.
And yes - incidentally one on which i would agree 100% with you on... or am i missing yr point?
53. jack c said...
techieman
If I get a chance I'll take a closer look at the H Omen to see if it has any real credibility - in the meantime it features in todays Citywire if you care to take a look.
Good luck with your various trading positions - you might also find this of some interest? www.fundstrategy.co.uk/markets/america/analysis-dollar’s-reserve-status-eroding-as-america-shuns-austerity/1016810.article
54. nickb said...
I find it plausible there will be a deflationary depression. I don't find it plausible that there will be a growth-requiring financial system in place in the long term future. By indefinite growth being energetically impossible I mean physical growth, not just growth in prices (real GDP growth). N
55. techieman said...
Jack i think its forecast every "crash" but its forecast "crashes" when there arent any - depends what you mean by "crashes" i suppose. I started reading the wiki entry but got a bit bored. If there is a crash of course we [ a few of us here] were looking for it (or at least a decent trend off the top) for a few weeks. I have been holding shorts and gradually getting more and more short as the market went up.
As i said i was looking for around 1140 - 1150 S&P to take a very large short position. But as we know it hasn't got there (if i does now then that would probably mean something else - so would be loathe to go ).
56. techieman said...
jack will look at yr link over the weekend... nick - fair enough. Both : have a great w/end.
57. jack c said...
techieman - many thanks - u also have a good one
Best regards
Northern J
58. techieman said...
Hi Jack - just read it. The point is this is reporting on what has already happened. As you know i am a dollar bull, and this just reinforces that.
In other words the austerity stuff is priced in the market quickly. Remember when the Euro was doomed ? Just at about that time the Euro went up / dollar fell. Now we are switching that on its head.
Listen to this - 8:50 mins if you dont want to listen to all of it. http://www.neowave.com/audiointerviews/Interview-GlennNeely8-10.mp3 . 9.30 in particular.
also http://www.housepricecrash.co.uk/newsblog/2010/08/blog-interesting-29810.php see number 8 and 10.
59. techieman said...
finally jack you might want to take a look at what Bob says ;-).
http://www.bloomberg.com/video/62152902/
Let me know if you have watched / heard this stuff
60. Thatcherschild said...
Mark@33/inbreda@32
Inbreda has not given the full picture. The Dwellings Profits Tax law in Guernsey was designed to stop speculation in non-owner occupied property. Hence, if you were a BTL-er, you had to own for five years before you could sell to make a profit. If you were an owner-occupier, you were exempt from the law if you had resided in the property for a year. Accordingly, the law had zero effect on HPC = when the crunch came, the Guernsey government got rid of the law because treasury receipts had plummeted and they were doing whatever they could to free up the market.