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Taxpayers Cash Wasted On Mortgage Rescue Scheme

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http://www.bbc.co.uk/news/business-13528126

The National Audit Office (NAO) said it helped 2,600 households avoid having their homes repossessed.

However, the target was 6,000.

The rescues were also supposed to cost a total of £205m, but actually cost more than £240m, the NAO found.

"The scheme has helped fewer than half the number of households expected and each rescue has cost more than three times as much as expected, with overall costs sitting at £240m," said Margaret Hodge, who chairs the Public Accounts Committee.

"Spending £35m more than planned yet not reaching all those in need does not represent value for money for taxpayers' investment in this scheme."

It found that the DCLG "made the wrong call" when predicting how many people would choose to relinquish ownership of their home and rent it back from a housing association, compared with the numbers who would opt for shared ownership with the housing association.

Some 98.5% of those on the scheme chose to sell their home, whereas the original estimate was that only 15% of people on the scheme would do so.

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These daft socialist schemes will always be a waste of taxpayers money.

What we need is a small society, with an effective police force (to stop theft and violent crime), and encourage people to look after themselves.

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http://www.bbc.co.uk/news/business-13528126

The National Audit Office (NAO) said it helped 2,600 households avoid having their homes repossessed.

However, the target was 6,000.

The rescues were also supposed to cost a total of £205m, but actually cost more than £240m, the NAO found.

"The scheme has helped fewer than half the number of households expected and each rescue has cost more than three times as much as expected, with overall costs sitting at £240m," said Margaret Hodge, who chairs the Public Accounts Committee.

"Spending £35m more than planned yet not reaching all those in need does not represent value for money for taxpayers' investment in this scheme."

It found that the DCLG "made the wrong call" when predicting how many people would choose to relinquish ownership of their home and rent it back from a housing association, compared with the numbers who would opt for shared ownership with the housing association.

Some 98.5% of those on the scheme chose to sell their home, whereas the original estimate was that only 15% of people on the scheme would do so.

That's £92,340 each.

Doh! Should have read council dwellers post.

Edited by Jack's Creation

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These daft socialist schemes will always be a waste of taxpayers money.

What we need is a small society, with an effective police force (to stop theft and violent crime), and encourage people to look after themselves.

This scheme is to manipulate the supply-demand balance in the housing market.

There's nothing socialist about it, not in the usual sense.

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If it's only £92k each, they've obviously only bought a part stake in the house.

I wonder how the money will be split between the bank and the government when these houses are obviously sold at auction for a loss?

Are the "owners" now paying partly their mortgage back to the bank, and partly rent to the HA?

Doesn't it just mean that the householder still owes the original sum of the mortgage, PLUS now has lost some of their stake in the price of the house?

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This scheme is to manipulate the supply-demand balance in the housing market.

There's nothing socialist about it, not in the usual sense.

There is in the sense that it robs the prudent to pay the feckless ;).

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Does the article mention how much it would cost to rehouse all the families if they had allowed their properties to be repossed?

I'd be interested in a comparison, but my guess it would be a lot more.

I also wonder if SMI would have been implemented in the first place had the banks not been socialised.

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I was discussing the MRS yesterday with a representative from my housing association.

Theoretically I could get some big mortgage for a really nice property, then go onto the dole, use the MRS and effectively turn a private property into a housing association property overnight.

Rather than wait for years to get a poxy flat.

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Does the article mention how much it would cost to rehouse all the families if they had allowed their properties to be repossed?

I'd be interested in a comparison, but my guess it would be a lot more.

I also wonder if SMI would have been implemented in the first place had the banks not been socialised.

If you're just comparing the raw cost of those families, then sure, why not - lets say thats true.

But what about the wider social costs?

What about the sustaining of house prices, not allowing them to reach a natural level?

Is this just storing up problems for the future, the longer term costs to society and to the government will be far, far greater.

Moral hazard and all that.

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Does the article mention how much it would cost to rehouse all the families if they had allowed their properties to be repossed?

I'd be interested in a comparison, but my guess it would be a lot more.

Are you kidding me? £92k would pay my rent (and the rent on a family home in most parts of the country) for at least 10 years!!

If these people had had their homes repossessed and we gave them all 2 years free rent to give them time to get back on their feet, it would have cost only 20% of this figure. Is anyone seriously suggesting that the state should be more generous than that?

I've always been a bit of a leftie and believe in social welfare, but this is ridiculously unfair resource allocation in a country where thousands of pensioners freeze to death every year for the sake of a couple of hundred quid.

Totally fubar!

:angry:

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Are you kidding me? £92k would pay my rent (and the rent on a family home in most parts of the country) for at least 10 years!!

If these people had had their homes repossessed and we gave them all 2 years free rent to give them time to get back on their feet, it would have cost only 20% of this figure. Is anyone seriously suggesting that the state should be more generous than that?

I've always been a bit of a leftie and believe in social welfare, but this is ridiculously unfair resource allocation in a country where thousands of pensioners freeze to death every year for the sake of a couple of hundred quid.

Totally fubar!

:angry:

++

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Are you kidding me? £92k would pay my rent (and the rent on a family home in most parts of the country) for at least 10 years!!

If these people had had their homes repossessed and we gave them all 2 years free rent to give them time to get back on their feet, it would have cost only 20% of this figure. Is anyone seriously suggesting that the state should be more generous than that?

I've always been a bit of a leftie and believe in social welfare, but this is ridiculously unfair resource allocation in a country where thousands of pensioners freeze to death every year for the sake of a couple of hundred quid.

Totally fubar!

:angry:

In Shappsworld, it's a small price to pay.

WTF he doesn't get it that if house prices were lower the amount required under these schemes would be lower, I've no idea. Pure token politics. He knows he ought not to do it, he knows the money could be much better spent elsewhere, he knows that in all honesty some of these people would be frankly better off if repossessed and able to make a fresh start rather than having a massive bank IOU round their necks for eternity, but...

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If you're just comparing the raw cost of those families, then sure, why not - lets say thats true.

But what about the wider social costs?

What about the sustaining of house prices, not allowing them to reach a natural level?

Is this just storing up problems for the future, the longer term costs to society and to the government will be far, far greater.

Moral hazard and all that.

Of course, but then when did government ever think long term?

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Shapps was interviewed on You and Yours R4 this morning about this.

As soon as the link is available I'll post it her.

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  • 312 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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