Jump to content
House Price Crash Forum
Sign in to follow this  
Si1

Support For Mortgage Interest

Recommended Posts

when is it going to end? will it?

It's a can that's going to be kicked down the road at least until after the next election IMHO (much to my annoyance)

Share this post


Link to post
Share on other sites

Can't get rid of it, too many votes at stake ... just imagine, poor hard-working families evicted by Thatcher's spawn ... children living in cardboard boxes ...

I have been patiently waiting 4 years now for just this event :lol::lol::lol:

Share this post


Link to post
Share on other sites

I just hope they do what they've considered doing, and that's putting a charge on the property to repay the benefit they've received.

Share this post


Link to post
Share on other sites

It's a can that's going to be kicked down the road at least until after the next election IMHO (much to my annoyance)

Cant upset the grey vote! Older people are more likely to vote than young, must look after the wrinklies.

Share this post


Link to post
Share on other sites

I just hope they do what they've considered doing, and that's putting a charge on the property to repay the benefit they've received.

Why this isn't done to start with remains a mystery.

nulabour created means tested re-payable benefits so this mortgage support scheme should have been similarly based. (death, sale or income rise)

Share this post


Link to post
Share on other sites

Sick isn't it? When an individual opts for home ownership it should be nothing to do with the government, nor subsidised by it. I'd argue the same point with having children too.

Some thought (inc. me) this lot would be different. A year in and sweat FA has changed.

Share this post


Link to post
Share on other sites

Some thought (inc. me) this lot would be different. A year in and sweat FA has changed.

Not strictly true, pretty much immediately cut the amount paid by SMI from 6% down to 3%

Share this post


Link to post
Share on other sites

Not strictly true, pretty much immediately cut the amount paid by SMI from 6% down to 3%

Aye, and the number of repos increased noticeably soon after. Not too hard to join the dots.

Share this post


Link to post
Share on other sites

Why would it end? All governments want to help the "poorest".

As more and more people struggle financially their mortgages will be extended into old age. Isn't there a thing on here today about a care home charging the state £3,500 a week per person? You do the maths....

Share this post


Link to post
Share on other sites

Why this isn't done to start with remains a mystery.

nulabour created means tested re-payable benefits so this mortgage support scheme should have been similarly based. (death, sale or income rise)

My guess at the reasons why they dont is

1) They can only really put a charge against the equity in the property, which may well be zero.

2) There is a cost of administering that idea, which may outweigh the benefits of doing so.

3) And what about the cost of living in the home itself, would they add that into the charge?

SMI is perhaps the most shockingly stupid of all housing policies. Bumping people who could have afforded homes out of accommodation so that those who cant afford to live there get a home instead, is just so daft it defies belief. If those in power cannot axe this madness, there is simply no hope for our younger generation who have to pay for all of this. They are getting one big shaft.

Share this post


Link to post
Share on other sites

when is it going to end? will it?

will it simply close to new entrants and leave pensioners in free houses forever?

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2036564/budget-2011-ismi-scheme-extended

End completely?

SMI has been around in one form or another since the late 1940's, and used to be far more generous than it is now until it was cut in the mid 90's

Share this post


Link to post
Share on other sites

Lets get rid of housing benefit first it cost a lot more. Well get rid of SMI housing benefit and child tax credit at the same time. Too much social engineering with the government deciding who is going to be rich and who is going to be poor rather than the market deciding.

Share this post


Link to post
Share on other sites

End completely?

SMI has been around in one form or another since the late 1940's, and used to be far more generous than it is now until it was cut in the mid 90's

More generous? It will pay pretty much all your interest on a mortgage of 8 times the median salary iirc. How generous was it in the past if it could beat that?

Share this post


Link to post
Share on other sites

reading yesterday that 99 billions worth of repayment mortgages were switched to interest only in the last two years says alot, how could they stop it wouldnt the banks colapse?

the fact this figure is what it is shows people cannot afford the homes thier in, its all inevitable i guess it depends how long and how much they think they can inflate away

Share this post


Link to post
Share on other sites

Indeed it has. Think some of the Daily Mail reader types on here are exagerating the support SMI is providing so they can point the finger at supposed spongers (not saying there's aren't any but there are many genuienly needy out there as well). Think pensioners who've been fleeced by their providers and then seen their saving rates dive, divorcees, old age, disability etc.

End completely?

SMI has been around in one form or another since the late 1940's, and used to be far more generous than it is now until it was cut in the mid 90's

Share this post


Link to post
Share on other sites

More generous? It will pay pretty much all your interest on a mortgage of 8 times the median salary iirc. How generous was it in the past if it could beat that?

It was more generous in the sense that there was no waiting time on claims, no capital limit and no maximum time limit on claims. In theory an 18 year old could have claimed for a seven figure mortgage (or more) from their 1st day of unemployment, signed on for all their working life and still be claiming SMI on their full £1m+ mortgage til death under the old rules.

The cuts in 1995 limited the capital to £90k, claims to 12 months, and introduced a waiting time for unemployment claims of 9 months. It was a huge cut at the time.

Edited by Neil D Possitt

Share this post


Link to post
Share on other sites

More generous? It will pay pretty much all your interest on a mortgage of 8 times the median salary iirc. How generous was it in the past if it could beat that?

well the average smi claimant would get about £4,000 a year or about half what a housing benefits claimant will get.

Share this post


Link to post
Share on other sites

well the average smi claimant would get about £4,000 a year or about half what a housing benefits claimant will get.

Plus a free bet on the movement in the price of any equity that they do have in their property, which can be worth a lot of money in good years.

Share this post


Link to post
Share on other sites

It was more generous in the sense that there was no waiting time on claims, no capital limit and no maximum time limit on claims. In theory an 18 year old could have claimed for a seven figure mortgage (or more) from their 1st day of unemployment, signed on for all their working life and still be claiming SMI on their full £1m+ mortgage til death under the old rules.

The cuts in 1995 limited the capital to £90k, claims to 12 months, and introduced a waiting time for unemployment claims of 9 months. It was a huge cut at the time.

It makes you wonder how anyone was ever repossessed.

Whatever it used to be, it was stupid, just as SMI is stupid today.

Share this post


Link to post
Share on other sites

I just hope they do what they've considered doing, and that's putting a charge on the property to repay the benefit they've received.

Yes. Incredible that this "investment" is protected even if the taxpayer ends up paying for it. It's one thing ensuring folks have a roof over their head, but why gift them an investment that they will use later as security in order to access more loans and then pass on remaining equity to their children? The interest paid by the taxpayer should be racked up like a student loan and recovered via future wages and if necessary on death or sale of the property. If that approach is good for our young people, why not for those who've lived extravagantly by taking on debts they can't afford to repay? Of course, it'll never happen.

Share this post


Link to post
Share on other sites

Can't get rid of it, too many votes at stake ... just imagine, poor hard-working families evicted by Thatcher's spawn ... children living in cardboard boxes ... not election winning headlines.

with a super leveraged amount of votes for those that find moving and buying is reaching normal human limits.

Share this post


Link to post
Share on other sites

After contacting my MP, I did receive a reply from Lord Freud on why the DWP make no effort to investigate potential fraud on self cert mortgages before granting SMI. The answer: " It's a matter between the lender and the customer" who are " guided by the FSA" as to the type of mortgage granted. The Conservative Party, purveyors of state sponsored benefit fraud.

Share this post


Link to post
Share on other sites

It makes you wonder how anyone was ever repossessed.

Whatever it used to be, it was stupid, just as SMI is stupid today.

My recollection is that the ones who got repo'd were those who had lost a good chunk of their income, (eg couples where one was suddenly redundant, the self-employed who's turnover had plummeted, people who used to rely on o/t & bonuses but were now living on basic pay.....) but weren't poor enough to qualify for any benefits.

Couples who were both unemployed were usually ok as they could claim dole and SMI etc.

The main difference now I think is low interest rates as people in the former categories can still just about pay the mortgage, for the time being at least...

Also I think people were much more inclined to say sod it and hand the keys to the lender then, perhaps in the mistaken belief that that would also discharge them of any residual debt.

Edited by Neil D Possitt

Share this post


Link to post
Share on other sites

It's a bank bailout and vote winner all bundled into one policy. It won't end soon, that's for sure.

Edited by the.ciscokid

Share this post


Link to post
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...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 311 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.