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Repossession Threat

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Telegraph

More families will lose their homes, charities warn, as the Government prepares to reduce the amount of financial support it provides to borrowers by as much as £200 a month.

By Myra Butterworth, Personal Finance Correspondent

Published: 12:04PM BST 12 Aug 2010

The latest repossession statistics showed numbers dropping after the Government introduced several measures for home owners who lost their jobs amid the economic downturn.

But some of this support is now being reduced. It includes Support for Mortgage Interest Support, which is paid to those on income-related benefits - such as Job Seeker’s Allowance - at a rate of 6.08 per cent.

The rate is paid regardless of how much a borrower actually pays to their lender – so it could mean that a home owner potentially ends up with a surplus of Government cash after paying out a lower mortgage rate to their bank.

This has pissed me off for a while now. Why am I paying for someone else to buy an asset and have a bit of spending money left over too.

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Acouple of quotes from the above article

It comes after Shelter warned earlier this year that more than five million home owners will be unable to afford a rise in interest rates and will be in danger of being evicted from their homes.

No they wont, not one single home owner will be evicted, but lots of over leveraged mortgagees might.

A spokesman for the Department for Work and Pensions said: “We’re changing the rate at which we pay Support for Mortgage Interest because currently over 90 per cent of people are getting more than they actually pay out in mortgage interest each month - this is unfair to the taxpayer and not a good use of public funds. Using the Bank of England rate will ensure that people still get the help they need with their mortgage interest payments.”

90% get overpayments!

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This was covered before and I seem to remember that the 'excess' has to be used to reduce the mortgage debt. Still b****y annoying but they don't get some 'spends' out of it as suggested.

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They should be cutting the Mortgage Interest Support scheme altogether. The taxpayer should not be getting involved with such things. If people get into difficulty then they can re-mortgage, if their isn't enough equity to do this then tough luck.

I'm getting increasing fed-up of wiping everyone's @rse for them.

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Might have been posted before:

http://www.telegraph.co.uk/finance/personalfinance/7940720/Repossession-threat-as-Government-reduces-home-owner-support.html

The latest repossession statistics showed numbers dropping after the Government introduced several measures for home owners who lost their jobs amid the economic downturn.

But some of this support is now being reduced. It includes Support for Mortgage Interest, which is paid to those on income-related benefits – such as Job Seeker’s Allowance – at a rate of 6.08 per cent.

The rate is paid regardless of how much a borrower actually pays to their lender – so it could mean that a home owner potentially ends up with a surplus of Government cash after paying out a lower mortgage rate to their bank.

This has prompted the Government to announce that it is cutting the rate to just 3.75 per cent from October 1. The new rate is based on the average mortgage rate provided by the Bank of England.

But charities warned the new rate will be too low for many home owners who will be left with a significant shortfall if they are still paying a higher mortgage rate.

The 2.33 per cent cut in Support for Mortgage Interest Support equates to as much as £202 less a month or £2,424 less a year on a typical £150,000 mortgage.

Debt charity the Consumer Credit Counselling Service said the decline would “aggravate” the level of repossessions.

Malcolm Hurlston, chairman of CCCS, said: “The cut in Support for Mortgage Interest will make it harder, and in some cases impossible, for many people to stay in their homes.”

It comes after Shelter warned earlier this year that more than five million home owners will be unable to afford a rise in interest rates and will be in danger of being evicted from their homes.

While repossessions are lower than originally feared, home owners with tracker mortgages will see their monthly repayments rise if interest rates go up. Many borrowers who have come to the end of their original deal have already seen their costs increase.

Repossessions fell to 9,400 in the three months between April and June, down from 9,800 in the previous three months and 11,800 during the same period a year earlier, according to the Council of Mortgage Lenders.

The CML has revised its forecast for the number of repossessions this year from 53,000 to 39,000.

A spokesman for the Department for Work and Pensions said: “We’re changing the rate at which we pay Support for Mortgage Interest because currently over 90 per cent of people are getting more than they actually pay out in mortgage interest each month – this is unfair to the taxpayer and not a good use of public funds.

"Using the Bank of England rate will ensure that people still get the help they need with their mortgage interest payments.”

I never realised that mortgage interest relief was fixed at 6.08 per cent. (the charities can go f**k 'emselves)

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I keep saying (& getting into trouble for saying it) but i have not seen ANY bloody cuts yet!

I recall all the big factory & plants getting shut in the 80's....towns that had only one major employer wiped out..................but this time NOTHING!

Mike

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I was mugge dinto donating to Shelter and i have just emailed them to tell them to fook off.

What tossers:

I am contacting you to end my monthly donations to your charity.

I am disappointed to see the charity advocating continued lower interest rates that are stopping the housing market from returning to sane and sustainable levels. You are in affect advocating for those who have been feckless and over extended themselves in housing they could never really afford without relying on self certs (liar loans) and 90%+ mortgages.

The charity should perhaps reflect on the effect continued high house prices will have on younger and future generations and those who were prudent enough to have savings that have been decimated by record low interest rates.

Sustained house prices will actually cause more homelessness for people who were unfortunate to be born a decade or generation too late and cannot afford to borrow 7 times their salary to by a shoebox.

The problem is not housing shortages it is affordability.

I can think of a number of other charities who directly help the homeless without feeling the need to advocate continuing support of housing market that has near bankrupted the banks and country.

For that reason i would like someone to email me confirming my donations have been stopped.

Many thanks.

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Quote:

I recall all the big factory & plants getting shut in the 80's....towns that had only one major employer wiped out..................but this time NOTHING!

Mike

Unquote.

There won't be failures of mass employers like the 80s because there is little in the way of govt owned businesses, they were all sold off. And all the 'excess' in the mines and steel industry has already gone.

Govt cuts will affect public sector mostly, yes there will be a knock-on effect to contractors but unless a whole hospital closes, or a council goes bust, you won't get the mass redundancies of the 80s. Even councils have contracted out many services like bin collections and social care.

Edit: Apologies for messy post, HPc server went down for a while I think.

Edited by deflation

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Might have been posted before:

http://www.telegraph.co.uk/finance/personalfinance/7940720/Repossession-threat-as-Government-reduces-home-owner-support.html

I never realised that mortgage interest relief was fixed at 6.08 per cent. (the charities can go f**k 'emselves)

...at this rate we will be truly bankrupt as a country ...with false market created on UK credit card.... :rolleyes:

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I keep saying (& getting into trouble for saying it) but i have not seen ANY bloody cuts yet!

.....

I'm not sure why you get into trouble (unless people point out you're a bit thick and you misinterpret that?) The cuts start next year. That was the plan - that is the agenda. The "emergency" cuts (a p1ss in the ocean) include things like BECTA for whom my mate was a contractor and is now unemployed. I will send you his photo if you like so you can "see" someone whose job has been cut. Next year it may well be you ;)

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I'm not sure why you get into trouble (unless people point out you're a bit thick and you misinterpret that?) The cuts start next year. That was the plan - that is the agenda. The "emergency" cuts (a p1ss in the ocean) include things like BECTA for whom my mate was a contractor and is now unemployed. I will send you his photo if you like so you can "see" someone whose job has been cut. Next year it may well be you ;)

Not many kickbacks from free software I suppose. Good riddance.

http://www.bbc.co.uk/blogs/thereporters/rorycellanjones/2010/05/becta_does_it_deserve_to_die.html

The concern was that the programme was far too inflexible, with schools often ending up with out-of-date and expensive technology and not having the freedom to choose what they wanted, rather than what some bureaucrat felt they needed.

That's not all the fault of Becta, of course, but it has been criticised for being captured by technology suppliers and failing to keep up with trends like the use of open-source software. When I spoke to the Department of Education this morning that was the line they took about today's decision. "We're keen to move away from a top-down approach and give more freedom to individual schools to choose what they want," a spokesman told me.

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Not many kickbacks from free software I suppose. Good riddance.

http://www.bbc.co.uk/blogs/thereporters/rorycellanjones/2010/05/becta_does_it_deserve_to_die.html

The concern was that the programme was far too inflexible, with schools often ending up with out-of-date and expensive technology and not having the freedom to choose what they wanted, rather than what some bureaucrat felt they needed.

That's not all the fault of Becta, of course, but it has been criticised for being captured by technology suppliers and failing to keep up with trends like the use of open-source software. When I spoke to the Department of Education this morning that was the line they took about today's decision. "We're keen to move away from a top-down approach and give more freedom to individual schools to choose what they want," a spokesman told me.

...sounds like someone with links to the quango was making money from selling out of date equipment if this is true...lucrative and all about connections (not electrical or cyber)...... :rolleyes:

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Well it won`t be you. :rolleyes:

The Organisation have awarded you lot a nice big wage and expenses increase. ;)

You are such a pathetic moron.

As I have posted a number of times I work for myself and run my own company. Your cretinous and repeated attempts to try to attribute my view to personal interest show what a shallow and sad individual you are. Grow up.

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You are such a pathetic moron.

As I have posted a number of times I work for myself and run my own company. Your cretinous and repeated attempts to try to attribute my view to personal interest show what a shallow and sad individual you are. Grow up.

Bang on time, I rest my case, nerve raw touch gives away your attack on me. My present and past signature get your goat don`t they. :rolleyes:

As Max Bygraves sang " Is it Spring again etc " :D

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...sounds like someone with links to the quango was making money from selling out of date equipment if this is true...lucrative and all about connections (not electrical or cyber)...... :rolleyes:

Read he res (and the comments), relations being given jobs, etc, etc.

Typical quango.

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You are such a pathetic moron.

As I have posted a number of times I work for myself and run my own company. Your cretinous and repeated attempts to try to attribute my view to personal interest show what a shallow and sad individual you are. Grow up.

contractor for the public sector? am I close?

Edited by Si1

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What worries me is not just giving people free money, but that there was no system in place to stop that happening. This kind of system should have clear limits right from the start - maximum amount per person, linked to average (or less) mortgage rates and time limits.

If people can't afford their house over a period of time then they should not expect govt to pay them for clinging on to it. They should sell it and rent. That is the only way to ensure a competitive housing market.

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Interesting comment from hamptoncourt in the Telegraph article:

Helena, that's because the majority of the comments here are from people who spend most of their time on a certain website where like-minded people (mainly who sold to rent) rant about house prices all day. Since the Times started charging they've moved en mass to the Telegraph to vent their spleen.

:)

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Interesting comment from hamptoncourt in the Telegraph article:

:)

And there's more:

antoncheckout

Among the factors keeping property prices unnaturally high is the problem of moral hazard. Up to now, buying a property has been seen as a one-way street to wealth. If buyers were confronted with the need to expose themselves 100% to future financial risks, mortgage-borrowing would be more cautious and more modest. Why on earth should we fund someone else's asset purchase through our taxes?

And this is with lending rates at a low. Imagine the bleating of silly sheep when they rise to 8% again - as they will.

goldtooth

"Imagine the bleating of silly sheep when they rise to 8% again - as they will".

You are having a laugh, surely. Don't you read the economic news - rates are set to stay low indefinitely.

Claiming those who own a home are silly sheep says it all about your mentality. Contrary to your misguided belief, the majority buy houses so they have somewhere to live, free from interference from landlords and their often rigid rules. I suggest you return to HPC where you can work yourself up into a frenzy with like minded posters.

hamptoncourt

spot on goldtooth. The HPC brigade are so easy to spot these days. They just cut and paste each other's comments in a bid to flood the news sites with idiotic comments like these.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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