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Historically ISMI (Income Support for Mortgage Interest) was paid at BOE base rate plus 1.58%. Plus you couldn't claim it for the first

39 weeks of claiming Income Support. Most people were paying more than this and so would have to either make up the shortfall or get repossessed. It was not a particularly generous scheme in my view, by the time 39 weeks had passed it was too late for many people. It was only the interest that gets paid not the capital, so anyone who has had their mortgage for a long time would get very little in ISMI payments.

Then in 2008 the Govt broke with the 1.58% rule and stated that they would hold ISMI at 6.08%. In January 09 they also reduced the waiting period from 39 weeks to 13 weeks. They also increased the maximum amount of loan from 100K to 200K.

This was all part of their strategy to prop up the housing market up and minimise repossessions, but has now resulted in the ludicrous situation of huge numbers of people being overpaid on their mortgages by the state. That is those that are on a decent rate ie. the ones with a decent credit rating so able to get a mortgage at below 6%. The ones on Lehman style sub-prime mortgages were of course stuffed from the second they signed the contract. ISMI is normally paid direct to the lender so any excess will pay off some of the capital which was never the original intention.

It was the decision to unhook from BOE rates that caused the problem IMHO

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Historically ISMI (Income Support for Mortgage Interest) was paid at BOE base rate plus 1.58%. Plus you couldn't claim it for the first

39 weeks of claiming Income Support. Most people were paying more than this and so would have to either make up the shortfall or get repossessed. It was not a particularly generous scheme in my view, by the time 39 weeks had passed it was too late for many people. It was only the interest that gets paid not the capital, so anyone who has had their mortgage for a long time would get very little in ISMI payments.

Then in 2008 the Govt broke with the 1.58% rule and stated that they would hold ISMI at 6.08%. In January 09 they also reduced the waiting period from 39 weeks to 13 weeks. They also increased the maximum amount of loan from 100K to 200K.

This was all part of their strategy to prop up the housing market up and minimise repossessions, but has now resulted in the ludicrous situation of huge numbers of people being overpaid on their mortgages by the state. That is those that are on a decent rate ie. the ones with a decent credit rating so able to get a mortgage at below 6%. The ones on Lehman style sub-prime mortgages were of course stuffed from the second they signed the contract. ISMI is normally paid direct to the lender so any excess will pay off some of the capital which was never the original intention.

It was the decision to unhook from BOE rates that caused the problem IMHO

Is it limited to two years or am I confusing it with other schemes?

p-o-p

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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.

Nice of them to respond but a glimse of Shelter's take on the housing market 'props':

Thank you very much for your email. I am very sorry to hear that you no longer wish to support Shelter. As requested, I have removed your details from our database.

At Shelter we believe that reducing the number of repossessions is essential to preventing homelessness. With inflation already above target, any rise will mean that many households will struggle to make ends meet and will be pushed into a spiral of debt, eviction and homelessness. We are not calling for interest rates to be low. We are simply suggesting that should they rise, the Government needs to provide effective support schemes to keep repossessions under control for the many people that will struggle to meet higher monthly payments.

We have recently joined forces with the Council of Mortgage Lenders and other housing organisations to write a joint letter to Chancellor George Osborne and the Business Secretary Vince Cable, calling for them to continue existing support measures for borrowers in most financial difficulty when they make their spending review decisions in October.

Shelter works hard to raise the Government’s awareness of housing unaffordability. Our recent research has shown that the lack of affordable housing is having a huge impact on every part of our lives. 1 in 5 young people still live with their parents, 1.5 million grandparents say they are missing out on helping take care of their grandchildren and almost two and a half million people actively put off having children, all because of high housing costs. We will continue to call for more affordable homes for the people that desperately need them and very much hope that you will continue to support us in this work.

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[quote name='Brave New World' date='13 August 2010 - 01:26 PM' timestamp='1281702391' post='2668956'

the Government needs to provide effective support schemes to keep repossessions under control for the many people that will struggle to meet higher monthly payments.

Shelter works hard to raise the Government’s awareness of housing unaffordability. Our recent research has shown that the lack of affordable housing is having a huge impact on every part of our lives. 1 in 5 young people still live with their parents, 1.5 million grandparents say they are missing out on helping take care of their grandchildren and almost two and a half million people actively put off having children, all because of high housing costs. We will continue to call for more affordable homes for the people that desperately need them and very much hope that you will continue to support us in this work.

Edited by bricor mortis
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  • 441 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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