GordonBrownSpentMyFuture Posted November 13, 2010 Share Posted November 13, 2010 Homeowners feel the pain of government cuts By Brian Milligan, Business reporter, BBC News 13 November 2010 Last updated at 00:03 On Thursday this week, winter storms were lashing the cliffs at Saltdean, near Brighton. In such weather, having a secure home seems even more important than usual. But Amanda Copeland, who lives in a bungalow in Saltdean with her three young children, believes she is about to lose hers for good. "There's probably a good likelihood this house will be repossessed within the next year or so," she says. Amanda is one of a quarter of a million homeowners in the UK who receive a benefit called Support for Mortgage Interest (SMI). But as a result of some of the first government cuts to take effect, that benefit was cut by 40% from 1 October. She, and more than 100,000 others, now face a shortfall in their mortgage payments. 'Slippery Slope' SMI helps people pay the interest on their mortgages if they receive a range of other benefits like income support or job seekers' allowance. Amanda gave up work as a nurse in June to look after her children, who are all under the age of eight. She says she could not afford to pay for childcare while they were all so young. She now lives on benefits. As a result of the cut in mortgage support, she needs to find nearly £400 extra each month. Inevitably that sum is going straight on her mortgage arrears, which already amount to more than £4000. "What's going to happen to us? Are we going to end up in some kind of homeless hostel accommodation?" she wonders. "It feels like a slippery slope, destination unknown. And no one to help." Hanging on The housing charity Shelter is taking daily calls from people in a similar situation to Amanda. Campbell Robb, Shelter Cambell Robb of Shelter says many people have received just a few weeks notice of the change It believes than more than three million people in the UK are now struggling to pay their mortgages. The cut in SMI is only one factor, but nevertheless the charity believes the number of repossessions is likely to rise. "A lot of people are hanging on by the skin of their teeth to stay in their homes," says Shelter's boss, Campbell Robb. Shelter is also angry about the amount of notice that people like Amanda were given before the changes were brought in. She received a letter three weeks before she had to find the extra money. "Nearly a quarter of a million people have had hardly any notice at all about a very significant change," he said. Too generous The SMI scheme was originally started by the Labour government in November 2008. To try and cope with the threat of repossessions, the mortgage interest rate which it paid was increased, temporarily, to 6%. That meant that mortgage lenders were paid as if they were charging borrowers at a rate of 6%, even though the rate they were charging was often significantly less than that. Where there was a surplus, the difference was used to pay down the capital on the loan, as well as pay off the interest, giving recipients an extra benefit. The coalition government argued that 6% was, therefore, too generous. From 1 October, it therefore reduced the rate to 3.65%, in line with average mortgage rate actually prevailing. Lord Freud, one of the ministers for welfare reform, says the state was simply over-supporting people. "The problem with the 6% rate was that 90% of people were actually getting more than their interest," he says. He now wants to persuade the banks to give people on SMI a cheaper loan rate. "After all, they're being paid by an organisation with a triple-A rating," he says. In other words, the government represents a very good credit risk, so should deserve an advantageous mortgage rate. Serious battle Back in Sussex, Amanda Copeland accepts the government's argument that those in work should always be better off than those on benefits. But she insists that the support she needs from the state is only temporary. When two year-old Charlie is old enough for school, she can go back to her job as a nurse. In the meantime, she faces a serious battle to stay in her bungalow, not just for the duration of the winter storms, but until her financial outlook becomes more settled. There's so much to comment on here that I'm not even sure where to start. It's 6.20 in the morning and all I can be bothered to muster is... Better start looking into rentals, love. Bring it on. Quote Link to comment Share on other sites More sharing options...
Captain Cavey Posted November 13, 2010 Share Posted November 13, 2010 Where there was a surplus, the difference was used to pay down the capital on the loan, as well as pay off the interest, giving recipients an extra benefit. had to go the full Eric on that one. You've got to be kidding, right??? :angry: Quote Link to comment Share on other sites More sharing options...
Protect Rural England Posted November 13, 2010 Share Posted November 13, 2010 Why doesn't the left wing biased BBC ask the simple question, "why are the financially prudent, frugal, pensioners, savers funding the feckless, indebted in retaining a basic human need namely shelter, at artificially high prices?" Quote Link to comment Share on other sites More sharing options...
TTID Posted November 13, 2010 Share Posted November 13, 2010 The principal problem with this piece is the implied assumption that this unemployed single mother somehow has a right to own a home and it's the taxpayer's responsibility to provide that. In the old days, she would have been a prime candidate for housing benefit in rented accommodation. Life is about to remind the UK about consequences, in a big way. A lesson that is long overdue. She's bleating about a situation that has come about entirely because of a series of her own choices, starting with the choice to increase the distance between her knees. Why am I paying taxes to keep her in a purchased home, while I'm renting? Repossess today, please. Quote Link to comment Share on other sites More sharing options...
Pent Up Posted November 13, 2010 Share Posted November 13, 2010 What on earth made her think she could just give up work with a mortgage to pay? She shouldn't even be receiving SMI! Quote Link to comment Share on other sites More sharing options...
Pauly_Boy Posted November 13, 2010 Share Posted November 13, 2010 Are we meant to be feeling sorry for her? Don't have 3 ruddy kids if you can't afford them. I thought SMI was only for a max of 2 years, it's not a perminent solution. TBH, if I was her bank and I was reading this, I'd get the repo papers ready ASAP! Quote Link to comment Share on other sites More sharing options...
papag Posted November 13, 2010 Share Posted November 13, 2010 Great start to the day NOT, why don't we just give money to everyone for doing nothing, l have taught the kids the dangers of life always told them to save for a rainy day well I look a right tit now . Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted November 13, 2010 Share Posted November 13, 2010 Why doesn't the left wing biased BBC ask the simple question, "why are the financially prudent, frugal, pensioners, savers funding the feckless, indebted in retaining a basic human need namely shelter, at artificially high prices?" Which frugal pensioners would those be then? The ones that paid in £100 per year into their state pension? Everyone seems to think there entitled at all levels, that's where the issue is. How about letting people keep some of their earned income and make their own provisions, rather than skimming off the state. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted November 13, 2010 Share Posted November 13, 2010 "The problem with the 6% rate was that 90% of people were actually getting more than their interest," he says. He now wants to persuade the banks to give people on SMI a cheaper loan rate. "After all, they're being paid by an organisation with a triple-A rating," he says. In other words, the government represents a very good credit risk, so should deserve an advantageous mortgage rate. Serious battle" HOLD ON...these are now GOVERNMENT MORTGAGES? Is this how they REALLY ARE THINKING? Wheres MY GOVERNMENT MORTGAGE? Quote Link to comment Share on other sites More sharing options...
mentholist Posted November 13, 2010 Share Posted November 13, 2010 I listened to this on radio 4 the other day and not once did it cross the bbcs mind to question the sanity of paying for people to stay in houses they couldn't afford. Tugging at heartstrings was more the point as various people cried about losing "their home". It's not your home luv it's the banks and why should other working people e.g me be forced to pay my mortgage and yours? Moral hazard seems to be the order of the day yet everyone is keen to skirt around the issues. Don't buy a house you cant afford, don't have kids you can't afford and ultimately don't expect other people to provide for you. The benefit system should be a safety net. Not a lifestyle enabler. The shelter bloke was almost as bad. This will cost more as people like Amanda move to private rentals with housing benefit. There's a solution there too. Don't ******ing pay as much hb and make the slumlords squeal. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted November 13, 2010 Share Posted November 13, 2010 (edited) About time the BBC faced the open market the same way as those of us who operate in it, not padded by SMI etc do. We have here a dydsfunctional media operation on the taxpeyer teat bleatng for the likes of another dysfunctional group on the taxpayer teat. Edited November 13, 2010 by OnlyMe Quote Link to comment Share on other sites More sharing options...
singlemalt Posted November 13, 2010 Share Posted November 13, 2010 There's so much to comment on here that I'm not even sure where to start.... Indeed. Question 1. How the <insert expletive> did the state go from safety net to litterally bank rolling every aspect of peoples entire lives! Too many of the general populus in the UK are bloated up with a sense of entitlement. They act with sheer wreckless disregard in making choices like having children with no forethought on how they're going to support them financially. Soon after out comes the begging bowl and they want to claim as many benefits as they 'entitled to'. My business received a very condecending automated letter the other day from HMRC pontificating about the correlation between taxes and 'the public services that we all enjoy'. Really?!? Is that so? Try rephrasing that! Do you mean the public services and lifestyles that other people enjoy from my hard labour? Sometimes I wonder if and where it will all end. Quote Link to comment Share on other sites More sharing options...
or in excess of Posted November 13, 2010 Share Posted November 13, 2010 had to go the full Eric on that one. You've got to be kidding, right??? :angry: Who`s kidding who, here? You seriously did not know this? Quote Link to comment Share on other sites More sharing options...
or in excess of Posted November 13, 2010 Share Posted November 13, 2010 What on earth made her think she could just give up work with a mortgage to pay? She shouldn't even be receiving SMI! "What on earth made her think she could give up work with a mortgage to pay?". SMI at 6% might have influenced her thinking. Quote Link to comment Share on other sites More sharing options...
Harry Monk Posted November 13, 2010 Share Posted November 13, 2010 As ever, it was "an investment" on the way up but has become "a home" on the way down. Quote Link to comment Share on other sites More sharing options...
ken_ichikawa Posted November 13, 2010 Share Posted November 13, 2010 Life is about to remind the UK about consequences, in a big way. A lesson that is long overdue. She's bleating about a situation that has come about entirely because of a series of her own choices, starting with the choice to increase the distance between her knees. Why am I paying taxes to keep her in a purchased home, while I'm renting? Repossess today, please. What you mean they will come after people like ME to pay for her stuff? Quote Link to comment Share on other sites More sharing options...
GordonBrownSpentMyFuture Posted November 13, 2010 Author Share Posted November 13, 2010 "What on earth made her think she could give up work with a mortgage to pay?". SMI at 6% might have influenced her thinking. Quite. Goalposts been unexpectedly moved, petal? Tough! Welcome to the world of prudent, law-abiding FTBs since 2003. You've made your own bed. Quote Link to comment Share on other sites More sharing options...
Stars Posted November 13, 2010 Share Posted November 13, 2010 (edited) Why doesn't the left wing biased BBC ask the simple question, "why are the financially prudent, frugal, pensioners, savers funding the feckless, indebted in retaining a basic human need namely shelter, at artificially high prices?" Perhaps the BBC isn't as left wing as it wants to appear to be? or perhaps vain, self serving real estatery transcends politics as does opposition to it. I do find it odd that a blatantly and obviously abusive economic situation hardly seems to register on the radar of many left wing people, who seem to have been brainwashed / trained to conduct losing arguments by making patently false assertions about other things instead Edited November 13, 2010 by Stars Quote Link to comment Share on other sites More sharing options...
WSG Posted November 13, 2010 Share Posted November 13, 2010 As ever, it was "an investment" on the way up but has become "a home" on the way down. great post Quote Link to comment Share on other sites More sharing options...
winkie Posted November 13, 2010 Share Posted November 13, 2010 What about putting any SMI paid as a charge on the property, when sold it is then repaid if sufficient equity? Quote Link to comment Share on other sites More sharing options...
durhamborn Posted November 13, 2010 Share Posted November 13, 2010 http://www.bbc.co.uk/news/business-11743245 Left job in June.£800 a month mortgage by the look of it.Expected tax payers renting on minimum wage to pay the mortgage until her youngest is 5,now racking up £400 a month arrears. This will see many many more repos.Came as a shock to her.So expected it too be paid 100% because she decided she didnt want to work, Quote Link to comment Share on other sites More sharing options...
leicestersq Posted November 13, 2010 Share Posted November 13, 2010 http://www.bbc.co.uk/news/business-11743245 Left job in June.£800 a month mortgage by the look of it.Expected tax payers renting on minimum wage to pay the mortgage until her youngest is 5,now racking up £400 a month arrears. This will see many many more repos.Came as a shock to her.So expected it too be paid 100% because she decided she didnt want to work, It is just maddening. She will be getting loads of benefits for the children anyway. Housing benefit is supposed to take care of those who cant afford a roof over their head. She is upset that the taxpayer wont buy her a free house. The welfare state has gone made of course. You should ensure that you can afford your children before you have them. This lady has given up her job expecting the tax payer to pay for her life and her home. If we all did that who would produce anything of value? All our money would be rendered useless. The welfare state has to end. This culture of dependency is going to destroy the nation, if it hasnt already. Quote Link to comment Share on other sites More sharing options...
winkie Posted November 13, 2010 Share Posted November 13, 2010 Here lies the problem...if people see they can get something for nothing they take it. Quote Link to comment Share on other sites More sharing options...
redmen9 Posted November 13, 2010 Share Posted November 13, 2010 My biggest problem with this is the fact that it is being reported as a miscarriage of justice of some sort! When will the public consensus change and the media stop portraying these leeches as victims who deserve something for nothing? Quote Link to comment Share on other sites More sharing options...
Captain Cavey Posted November 13, 2010 Share Posted November 13, 2010 Who`s kidding who, here? You seriously did not know this? Not the paying off the capital bit. I left the UK due to the exorbitant cost of housing. but still retaining an old fashioned principle of earning sufficient money to provide for my family without state intervention. More fool me it would seem. Quote Link to comment Share on other sites More sharing options...
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