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moneyfornothing

Why This Bounce Will Last Well Into 2011

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SMI - Support for Mortgage Interest Payments - most homeowners with loss of income are eligible for this .. do not confuse this with the mortgage rescue scheme .. few takers for that. But numbers in the hundreds of 1000's for SMI. SMI is paid out for two years -- whats more the payout is at a fixed rate of 6.1% till dec 2009 ..in effect if you are on the banks SVR at 3.5% say .. you are being paid in excess of the actual interest on your loan. This should explain the lack of properties on the market. I couldnt find any exlcusion that would prevent BTL from also taking advantage of the scheme.

So there is a pent up supply once the two years run out. At which point if GB is back we can expect indefinite extensions.

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I presume you are referring to this:

http://england.shelter.org.uk/get_advice/p...rtgage_interest

Basically benefits for those on income support to pay your mortage interest if you are unemployed.

Dunno- will this help prevent a crash by reducing the number of forced sellers? Possibly.

Of course it won't prevent BTL forced sellers. And if the fabled "bond market dislocation" happens then this sort of benefit will stop.

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Different rules apply depending on whether the loan was taken out before or after Oct 2 1995

For loans to purchase the property (& home improvement loans) taken out after 2 October 1995, there is a waiting period of 39 weeks before help is provided, and 100% of eligible mortgage interest is paid from week 40.

Vulnerable customers who fall into certain specific groups, and customers with a loan taken out prior to 2 October 1995, receive no help for the first 8 weeks of their claim, 50% of eligible interest for a further 18 weeks and 100% of their eligible mortgage interest from week 27.

The capital limit up to which mortgage interest can be met is £100,000.

So for most no help for 39 weeks

Edited by dundee

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If there are still 100s of thousands in need of this when the 2 years is up, the government will just extend the term.

Edited by Mammon

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Different rules apply depending on whether the loan was taken out before or after Oct 2 1995

For loans to purchase the property (& home improvement loans) taken out after 2 October 1995, there is a waiting period of 39 weeks before help is provided, and 100% of eligible mortgage interest is paid from week 40.

Vulnerable customers who fall into certain specific groups, and customers with a loan taken out prior to 2 October 1995, receive no help for the first 8 weeks of their claim, 50% of eligible interest for a further 18 weeks and 100% of their eligible mortgage interest from week 27.

The capital limit up to which mortgage interest can be met is £100,000.

So for most no help for 39 weeks

The waiting time was reduced to 13 weeks.

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I presume you are referring to this:

http://england.shelter.org.uk/get_advice/p...rtgage_interest

Basically benefits for those on income support to pay your mortage interest if you are unemployed.

Dunno- will this help prevent a crash by reducing the number of forced sellers? Possibly.

Of course it won't prevent BTL forced sellers. And if the fabled "bond market dislocation" happens then this sort of benefit will stop.

i don't see how this can make much difference. Larger scale unemployment is in areas affected by factory and plant closures, typically the lower end of the market in areas that few want to live. Reducing the numbers of forced sellers in those areas in these times is going to have a limited impact in the area and negligable impact nationally.

BTL's being propped up could be significant though.

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And here are the words direct from the horses mouth: www.jobcentreplus.gov.uk/JCP/Customers/WorkingAgeBenefits/Dev_016128.xml.html

"Support for mortgage interest

If you are claiming Income Support, income-based Jobseeker's Allowance or income-related Employment & Support Allowance and you are a homeowner, your benefit may include additional support for mortgage interest (SMI).

Payments can be made towards a customer's mortgage interest payments for loans taken out to purchase the property or for specific home improvement loans. No guarantee can be made that the Department will meet a loan prior to it being taken out. No help can be provided towards housing costs such as payments of capital owed on a loan, insurance premiums or mortgage arrears.

From 5 January 2009, a temporary package of measures was introduced to provide extra help to new customers in light of the economic downturn. These changes will be reviewed when the housing market recovers."

The bold statements are the real kicker that truly did my head in. It really doemonstrates what NuLabour is all about and what they consider the economy to be - the OP is right they are paying you to buy a house with our money. I AM FURIOUS!!! :angry: :angry: :angry:

Edited by IMHAL

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From the Shelter website:

"If you're receiving jobseeker's allowance and you claimed after 5 January 2009, you'll only be able to claim help with housing costs for up to two years. There is no time limit if you claimed before that date or are recieving income support, pension credit or income-related employment and support allowance. "

Niiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiice.....................

:blink:

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Think you have hit the nail on the head as to why there will be NO CRASH...

the powers that be will simply not allow this to happen whether Labour or the Tories are in power. Like it or no we are at the dawn of the next spending spree to revive the economy ...boom for another 6 years from 2010.

This also means that there will be NO significant PRICE INCREASES in the next five years either.

The housing market will remain stagnant (5-10% increase in 5 years). Prices at the end of the year will probably be 7% below the peak with the promised recovery on the way.

I however bet the Government didn't expect the resilance of the housing market....so what is that 10 % decrease from Peak to July 09 ?

What really makes me laugh is these Amercian ecomomic doom mongerers applying their economic theories to our housing market....and those clinging to these as to a house price fall of 40% ...really ???.THEY HAVE NO IDEA how perculiar our little Island is with excess demand and a short supply of housing and our obessive attitude to home ownership.

By the time we're watching England tormenting us in the World cup next year... we'll all be drinking to the good times hopefully with this nasty world recession behind us !

Edited by foa4

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Good anecdote about it here:

http://ourdailydebt.wordpress.com/2009/03/...-i-want-it-all/

The excessive % rate was extended to November? Linky please.

Here you go..

http://www.jobcentreplus.gov.uk/JCP/Custom...016128.xml.html

The SIR is normally based on the Bank of England interest rate plus an additional 1.5 per cent. However, in November 2008, the Government froze the SIR at 6.08 per cent for six months, for all existing and new SMI customers, including those claiming Pension Credit. In the Budget, the Chancellor announced that the SIR freeze would be extended for a further six months to the end of December 2009, in order to provide continued support for homeowners.

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Sorry, is this a joke or am I misunderstanding?

Are you saying that someone with a 200k mortgage at 3%, can go the govt and get 6%?

Interest 6k, but you can't pay so the govt give you 12k to help you out!!!!!!

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Sorry, is this a joke or am I misunderstanding?

Are you saying that someone with a 200k mortgage at 3%, can go the govt and get 6%?

Interest 6k, but you can't pay so the govt give you 12k to help you out!!!!!!

Can you imagine the tories keeping this up once they get into power?

How much must this be costing the taxpayer?

Assuming 140K each, say half the 700,000 claim this, that is costing around 2.5 Billion a YEAR!

Hardly affordable.

Once this gets pulled (post-election) can you imagine what is going to happen to housing supply?

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Sorry, is this a joke or am I misunderstanding?

Are you saying that someone with a 200k mortgage at 3%, can go the govt and get 6%?

Interest 6k, but you can't pay so the govt give you 12k to help you out!!!!!!

but only until the housing market ... errgh... economy recovers umm.

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Surely this only affects repossesions though - it's not going to bring any extra money to the table, so one would imagine that at worst it will lead to continued stagnation in the market. Certainly round here it's the same overprice shite month after month. Every now and again something goes STR and then a bit later it goes available again.

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Surely this only affects repossesions though - it's not going to bring any extra money to the table, so one would imagine that at worst it will lead to continued stagnation in the market. Certainly round here it's the same overprice shite month after month. Every now and again something goes STR and then a bit later it goes available again.

Without lots of property coming onto the market though, there can be no crash. Its pointless having a large deposit as it gives you no advantage over property coming onto the market.

This pure Labour spin WRT the mortgage figures; the election is in june right, so even if they keep this scheme till December as planned, the reposession numbers wont show a rise for at least another 6 months, just in time for the Conservatives get in.

They are a complete and utter shower of shite.

Stagnation till the election then crash resumed.

F*cking disgrace.

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Without lots of property coming onto the market though, there can be no crash. Its pointless having a large deposit as it gives you no advantage over property coming onto the market.

This pure Labour spin WRT the mortgage figures; the election is in june right, so even if they keep this scheme till December as planned, the reposession numbers wont show a rise for at least another 6 months, just in time for the Conservatives get in.

They are a complete and utter shower of shite.

Stagnation till the election then crash resumed.

F*cking disgrace.

I tend to agree - I do think that the bounce is unsustainable, but that the next down leg is by no means certain in the short term, and thus we are going to get a standoff and transaction volumes will go through the floor over winter.

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SMI - Support for Mortgage Interest Payments - most homeowners with loss of income are eligible for this .. do not confuse this with the mortgage rescue scheme .. few takers for that. But numbers in the hundreds of 1000's for SMI. SMI is paid out for two years -- whats more the payout is at a fixed rate of 6.1% till dec 2009 ..in effect if you are on the banks SVR at 3.5% say .. you are being paid in excess of the actual interest on your loan. This should explain the lack of properties on the market. I couldnt find any exlcusion that would prevent BTL from also taking advantage of the scheme.

So there is a pent up supply once the two years run out. At which point if GB is back we can expect indefinite extensions.

Sorry I can't agree. Given the rate the government is racking up debt, these schemes simply won't be sustainable in the short term, never mind the medium or long term.

The government simply cannot continue 'inventing' money to try to pretend that this debt crisis can be managed, with all the accumulated debt to paid off 'some time in the future' but with no government spending cuts or tax increases. IT CAN'T.

To think anything else is fantasy - unless you're a member of the government or a committed supporter, then it's just plain common sense. Someone have completely lost the plot, and I don't think it's me.

The banks actually seem to be acting 'normally' once again. You now need a (min) 25% deposit - for a decent sized mortgage at a 'reasonable' rate - added to up to 3-3.5x annual salary.

On what planet do the above indicate a steady rise in house prices??? OH I FORGOT... IT'S ALL POSSIBLE ON PLANET GORDO :angry:

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Sorry I can't agree. Given the rate the government is racking up debt, these schemes simply won't be sustainable in the short term, never mind the medium or long term.

The government simply cannot continue 'inventing' money to try to pretend that this debt crisis can be managed, with all the accumulated debt to paid off 'some time in the future' but with no government spending cuts or tax increases. IT CAN'T.

To think anything else is fantasy - unless you're a member of the government or a committed supporter, then it's just plain common sense. Someone have completely lost the plot, and I don't think it's me.

The banks actually seem to be acting 'normally' once again. You now need a (min) 25% deposit - for a decent sized mortgage at a 'reasonable' rate - added to up to 3-3.5x annual salary.

On what planet do the above indicate a steady rise in house prices??? OH I FORGOT... IT'S ALL POSSIBLE ON PLANET GORDO :angry:

Whats to stop them axeing other public spending though to keep such a scheme afloat, say 1 bill of education, 1 bill of defence?

Edited by mbga9pgf

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Whats to stop them axeing other public spending though to keep such a scheme afloat, say 1 bill of education, 1 bill of defence?

Education, education, education :unsure:

Send troops into battle in Afghanistan stark naked with rusty stanley knives as weapons :(

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But I to think 'affordability' questions by the guvnment are irrelevant ... QE ran/runs in the many multiples of the cost of this package ... and no one to stop them doing that!

Who's going to stop them QE-ing directly into folks bank accounts? There simply is no one there with the control tools (ability to record & publish & *help people conceptualise*) or authority with which to put a stop to this additional extremist financial suicide.

And the Tories are hardly likely to be able to 'afford' to cut back on *anything* (they will have to go careering of the ZanuLabour defined cliff) for at least the first 2 years of their term ... because it will be too visible ... or the last 2 years of their term because ZanuLabour will come back with the loud hailers about how they screwed the hard working family ... and the Beeb (or whichever other medjia rubbish) will slate them/cut them to pieces so badly as to potentially affect their chances of a second term.

*sigh* ... looks like I *am* going to be a frustrated FTB ... but I am (arguably) 'forced' (as much as anyone is ever forced to do anything) into the market mid of next year (2010) by the fact that I simply want to have a house to live in. Ah well, so I retire 10 years later because I was born in the wrong year. And my kids hopes for a complete education go out the window. That's not so bad is it??!?!?!?

Never mind that I am one half of the leadership of one of the hard working families Gordo is supposed to be helping. Ah yes, but I work hard but have neglected go skidding of the cliff with the rest of the lemmings so I don't deserve help ... do I?

*walks to bank to apply for mortgage/lemming qualification certificate* ... *sigh*

Aidanapword

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Education, education, education :unsure:

Send troops into battle in Afghanistan stark naked with rusty stanley knives as weapons :(

I wouldnt put it past this shower of sh*t.

HPI is all labour ever had as far as an economic miracle.

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Education, education, education :unsure:

Send troops into battle in Afghanistan stark naked with rusty stanley knives as weapons :(

I wouldnt put it past this shower of sh*t.

HPI is all labour ever had as far as an economic miracle.

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