Jump to content
House Price Crash Forum

Cml Wants Mortgage Interest Benefit Doubling Kept


Recommended Posts

0
HOLA441

You know how it is: you take a margined position in £150k of BP shares. Next thing you are out of work, unable to pay the interest, so the government throws you £750 a month, to pay the £600 demanded by your broker. Your missus, who has a part time job earning £6k a year, chucks work in, rather than make you ineligible for government handouts.

Okay, so that only works :

a ) if your investment is property;

b ) if your chancellor is Gordon Darling.

It's all about to change according to the linked article below. The scheme will revert to the pre-crisis regime:

1 ) max margined speculation mortgage £100k (£200 currently);

2 ) waiting period for this benefit 39 weeks (13 currently).

The CML are in a tizz:

‘Lender forbearance has played a crucial role in keeping arrears and possessions in check, and this is reinforced by the certainty for lenders and borrowers of benefit payments, albeit at a reduced rate, within 13 weeks,’ said Michael Coogan, director general of the CML. - http://citywire.co.uk/money/countdown-to-the-spending-review-is-mortgage-interest-benefit-a-cut-too-far/a441640?ref=citywire-money-featured-articles-list

Apparently the changes will save a measly £200m. Well, if it's so damn measly peeps won't mind footing it themselves, will they?

Link to comment
Share on other sites

  • Replies 63
  • Created
  • Last Reply

Top Posters In This Topic

1
HOLA442
2
HOLA443
3
HOLA444
4
HOLA445

You know how it is: you take a margined position in £150k of BP shares. Next thing you are out of work, unable to pay the interest, so the government throws you £750 a month, to pay the £600 demanded by your broker. Your missus, who has a part time job earning £6k a year, chucks work in, rather than make you ineligible for government handouts.

Okay, so that only works :

a ) if your investment is property;

b ) if your chancellor is Gordon Darling.

It's all about to change according to the linked article below. The scheme will revert to the pre-crisis regime:

1 ) max margined speculation mortgage £100k (£200 currently);

2 ) waiting period for this benefit 39 weeks (13 currently).

The CML are in a tizz:

‘Lender forbearance has played a crucial role in keeping arrears and possessions in check, and this is reinforced by the certainty for lenders and borrowers of benefit payments, albeit at a reduced rate, within 13 weeks,’ said Michael Coogan, director general of the CML. - http://citywire.co.uk/money/countdown-to-the-spending-review-is-mortgage-interest-benefit-a-cut-too-far/a441640?ref=citywire-money-featured-articles-list

Apparently the changes will save a measly £200m. Well, if it's so damn measly peeps won't mind footing it themselves, will they?

I find the whole thing ludicrous that the government gives out money like this.

They ought to operate something like the student loans system where as soon as you are back in work you have to pay everything back in tax.

Mind you, when you consider what a complete f*** up was made of that system maybe it's cheaper just to give them the free money after all.

Link to comment
Share on other sites

5
HOLA446

Will there be any limit on how long it is paid for? Cos if not, banks are going to give free loans to those about to become pensioners, knowing that they will be able to buy a home based on a gamed benefit.

They just have to get rid of this benefit altogether. There is simply no justification for it given that housing benefit is retained.

Link to comment
Share on other sites

6
HOLA447

Will there be any limit on how long it is paid for? Cos if not, banks are going to give free loans to those about to become pensioners, knowing that they will be able to buy a home based on a gamed benefit.

They just have to get rid of this benefit altogether. There is simply no justification for it given that housing benefit is retained.

I will be dancing in the streets if this happens. More than anything else this scheme is putting a floor under the housing market.

Link to comment
Share on other sites

7
HOLA448
8
HOLA449
9
HOLA4410
10
HOLA4411

You know how it is: you take a margined position in £150k of BP shares. Next thing you are out of work, unable to pay the interest, so the government throws you £750 a month, to pay the £600 demanded by your broker. Your missus, who has a part time job earning £6k a year, chucks work in, rather than make you ineligible for government handouts.

Okay, so that only works :

a ) if your investment is property;

b ) if your chancellor is Gordon Darling.

It's all about to change according to the linked article below. The scheme will revert to the pre-crisis regime:

1 ) max margined speculation mortgage £100k (£200 currently);

2 ) waiting period for this benefit 39 weeks (13 currently).

The CML are in a tizz:

‘Lender forbearance has played a crucial role in keeping arrears and possessions in check, and this is reinforced by the certainty for lenders and borrowers of benefit payments, albeit at a reduced rate, within 13 weeks,’ said Michael Coogan, director general of the CML. - http://citywire.co.uk/money/countdown-to-the-spending-review-is-mortgage-interest-benefit-a-cut-too-far/a441640?ref=citywire-money-featured-articles-list

Apparently the changes will save a measly £200m. Well, if it's so damn measly peeps won't mind footing it themselves, will they?

Important post.

That article accepts readers' comments: http://citywire.co.uk/money/countdown-to-the-spending-review-is-mortgage-interest-benefit-a-cut-too-far/a441640?ref=citywire-money-featured-articles-list

Link to comment
Share on other sites

11
HOLA4412
12
HOLA4413

I find the whole thing ludicrous that the government gives out money like this.

They ought to operate something like the student loans system where as soon as you are back in work you have to pay everything back in tax.

Mind you, when you consider what a complete f*** up was made of that system maybe it's cheaper just to give them the free money after all.

However much this leaves a bad taste in the mouth, when you think about it, this isn't any fairer than paying someone's rent for them when they're out of work in the form of LHA. The one unfair advantage mortgagors have over renters is that they're not forced to downsize or only receive enough LHA for accomodation they are entitled to.

Link to comment
Share on other sites

13
HOLA4414

In addition to the above, this is really no different to the BTL brigade that prey on LHA recipents knowing full well that the tax payer will foot the monthly rent than the banks giving out mortgages to anyone with pulse, knowing full well the tax payer once again will foot the bill for SMI.

The whole system needs fixing starting from scratch!

Link to comment
Share on other sites

14
HOLA4415
15
HOLA4416

However much this leaves a bad taste in the mouth, when you think about it, this isn't any fairer than paying someone's rent for them when they're out of work in the form of LHA. The one unfair advantage mortgagors have over renters is that they're not forced to downsize or only receive enough LHA for accomodation they are entitled to.

You raise a valid point and an intersting slant.

Recentlt Cameron has suggested council tennants who can afford to buy should not be entitled to council houses. This view was given political cover in the Telegraph by a story about a £1000 a night Stringfellows stripper who still lived in a council house.

However, if council tennants who can afford to buy should be moved on (to owner-occupiership), surely, the quid pro quo must be that owner-occupiers who cannot afford to buy should be moved 'back' to council tenancy (and not propped up by the government). ;)

That of course suggests council housing building should not be scaled back. ;);)

In fact, it suggests it should be stepped up. ;););)

Okay, I'll stop here, cos my winky eye is getting tired.

Edited by Sledgehead
Link to comment
Share on other sites

16
HOLA4417

You raise a valid point and an intersting slant.

Recentlt Cameron has suggested council tennants who can afford to buy should not be entitled to council houses. This view was given political cover in the Telegraph by a story about a £1000 a night Stringfellows stripper who still lived in a council house.

However, if council tennants who can afford to buy should be moved on (to owner-occupiership), surely, the quid pro quo must be that owner-occupiers who cannot afford to buy should be moved 'back' to council tenancy (and not propped up by the government). ;)

That of course suggests council housing building should not be scaled back. ;);)

In fact, it suggests it should be stepped up. ;););)

Okay, I'll stop here, cos my winky eye is getting tired.

Sledgehead,

your musings illustrate exactly why the state shouldnt intervene in housing. They try to give to the most needy, but end up giving to those that game the system best.

And rather than have an ever growing and massive rule book about who should be doing what for whom based on income and outgoings and stuff, just forget it all and leave it all to the market. Just sell off all council houses to the highest bidder.

Then that rich bird from Stringfellows can choose how much she wants to spend on housing. And that bloke who can no longer afford his home cos he stretched too far has to face the consequences of his decisions, and downsize more aggresively than if he had saved harder before hand and bought somewhere less expensive on credit.

I am still horrified to think that the rules for SMI actually allow banks to lend to people just about to retire, facing a drop in income, knowing that after 39 weeks the state will pay their mortgage indefinitely, well at least whilst they are still alive.

Only a market free of government interference ends all of this nonsense.

Link to comment
Share on other sites

17
HOLA4418

I am still horrified to think that the rules for SMI actually allow banks to lend to people just about to retire, facing a drop in income, knowing that after 39 weeks the state will pay their mortgage indefinitely, well at least whilst they are still alive.

Only a market free of government interference ends all of this nonsense.

We are all horrified.

I am feeling much more confident now the rate of increase of the deficit will slow sharply because whilst in isolation this particular stupidity is minor, there are 100s of stupidities that the Tories are saying "nuff" too.

Which is a good thing. Once the world markets see that the UK is changed the direction of travel and will eventualy clear the deficit and even perhaps some of the debt, capital will start to flow in.

I know its horrible if kids are involved, but what we really, really need is for hundreds of borrowers to be very visibly turfed out of the properties they are squatting in.

It will shock, horrify and untimately re-align everyone to economic reality. "OMG - 'they' will let it happen"

(And crash house prices)

Edited by xux42
Link to comment
Share on other sites

18
HOLA4419

Sledgehead,

your musings illustrate exactly why the state shouldnt intervene in housing. ...

Only a market free of government interference ends all of this nonsense.

Absolutely. All that talk of firemen not being able to afford to live in London w/o HB had me screaming at the goggly-box: "let's just see what rents look like w/o all these gubmint props!"

... and thence of course what London flat prices would look like as a consequence.

But the reality is gubmint loves us to be totally tethered to their systems. They love owner occupiers most cos we need them to confirm our title to our assets. And they love debtors cos the banks then need the government to confirm title and the credit contracts. All that dependence and need makes the goverment a "friend indeed" to most, no matter what taxes are levied upon them.

If however you don't need the apparatus of the state to confer title - let's say you have a bar of yellow shiny stuff - you might well decide you have nothing to lose by traipsing beligerantly through parliament square with a banner declaring "get the b'strds out!"

It's all about power in the end.

Link to comment
Share on other sites

19
HOLA4420

However much this leaves a bad taste in the mouth, when you think about it, this isn't any fairer than paying someone's rent for them when they're out of work in the form of LHA.

These two would be roughly equivalent if the homeowner owner became a tenant as a result of the support.

Edited by Stars
Link to comment
Share on other sites

20
HOLA4421

It's all about to change according to the linked article below. The scheme will revert to the pre-crisis regime:

1 ) max margined speculation mortgage £100k (£200 currently);

2 ) waiting period for this benefit 39 weeks (13 currently).

If true, I'll be astounded, amazed and elated.

Edited by exiges
Link to comment
Share on other sites

21
HOLA4422
22
HOLA4423

Sledgehead,

your musings illustrate exactly why the state shouldnt intervene in housing. They try to give to the most needy, but end up giving to those that game the system best.

And rather than have an ever growing and massive rule book about who should be doing what for whom based on income and outgoings and stuff, just forget it all and leave it all to the market. Just sell off all council houses to the highest bidder.

OK, but while you're at it with your logic, lets do the same with the NHS, Ambulance Service, Fire Service etc. Can't have one without the other now can we?

It's not hard to see where my thoughts on all this are by my signature. Having a roof over your head and access to medical services should be a basic right for us in the UK and not left in the hands of a minority of private rackateers.

We need to build far more council houses, and ones that cannot be subsequently bought with stupid RTB! :angry:

Link to comment
Share on other sites

23
HOLA4424
24
HOLA4425

You know how it is: you take a margined position in £150k of BP shares. Next thing you are out of work, unable to pay the interest, so the government throws you £750 a month, to pay the £600 demanded by your broker. Your missus, who has a part time job earning £6k a year, chucks work in, rather than make you ineligible for government handouts.

Cool!

I'll jack in work and spread bet for a living.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information