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Home Owners May Lose Equity In Return For Benefits

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As per title really. Behind a ST paywall so couldn't read full article.

http://www.thetimes....etto-tw-ios-1.6

Unemployed homeowners will have to give a stake of the equity in their home to the State in return for help in paying their mortgage, under a plan favoured by ministers.
Edited by aSecureTenant

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Could open this out to any benefits not just mortgage repayments.

your house...a sitting target.

Saying that, this anomaly as it stands v cash holders is a disgrace.

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your house...a sitting target.

Saying that, this anomaly as it stands v cash holders is a disgrace.

Yes and those with BTL portfolio's claming benefits.

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At least it would level the playing field

200K equity on a 250k(or any amount of equity ) house you get full benefits + the interest on your mortgage paid

Renting with over 6k savings they start reducing benefits and HB, over 16k you get sweet FA

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Well, this is not really any different from those that are not homeowners but have savings having to use up said savings before they can access benefits. At the moment, you can own a £1 million pound house but still be entitled to benefits. So someone with £20k in savings has to use it up before they can access the benefits system but a lord with a million pound house is entitled straight away.

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Well, this is not really any different from those that are not homeowners but have savings having to use up said savings before they can access benefits. At the moment, you can own a £1 million pound house but still be entitled to benefits. So someone with £20k in savings has to use it up before they can access the benefits system but a lord with a million pound house is entitled straight away.

not that having a million pound mortgage is going to get paid much...4/5ths will go unpaid.

Edited by Bloo Loo

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I posted this elsewhere a few weeks ago.

I am reliably informed of a retired couple who recently and allegedly sold their house for 300K, stuck it in investments off-shore, moved into rented and then applied for a housing association flat. They got one - amazed me how they got one so quick - in a very nice area within a few months of selling.

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Why the hell is the state paying anything towards peoples mortgage?

Insanity.

Because of the hassle of housing homeless people, there simply isn't the stock. Plus it doesn't look good in the press people being made homeless by govt inaction. Although does it make more sense to pay "rent" and not the mortgage?

However this could cause houses to correct as people won't want a wealth store that can be tax by the state in this manner. Although no surprise that the govt is going after hard assets that they can leverage up. If the IMF come calling will they demand payment for all of these stakes held?

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I can see where this is going. It won't just be SMI interest paid it'll be the full repayment mortgage paid ie the taxpayer pays the capital off too.

it'll be because people have to get their lender to switch them to interest only when they are unemployed and all the forbearance hassles.

it will be used to sell it to the taxpayer that's their money will be used to pay off people's capital but as a sop the state will take a stake in the equity.

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Saying that, this anomaly as it stands v cash holders is a disgrace.

Yup. How awful housing might be treated like any other damn asset and tenants no longer be discriminated against.

Either have everything tax free or nothing. Mad that you can have a house in 3 acres and it be tax free (and worth considerably more) than a house and 3 acres 500 yards down the road and the 3 acres be treated as an 'investment' (but worth considerably less than the former scenario)

Would be difficult to administer though. The banks are incompetent. The government are incompetent. I see lots of practical implementation problems.

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I'm with hotairmail.

All wealth should be counted when applying for state benefits, and pensions shouldn't escape by being 'locked away'.

Dam tootin.

Someone with £1M wont get benefits but they can but a £2M house then claim benefits.

Something not right there.

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Ah, can't read article.

Taking a stake in return for paying the mortgage is better than just paying the mortgage. But is this part of an expansion of SMI, and just a further prop to the banks/house prices?

I see the words "indefinite help" before the articles fades out.

Edited by opt_out

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Seems fair to me.....how you can have many thousands of pounds tied up in housing equity and pensions and no savings and can have access to benefits, but someone with savings they worked for has to spend almost all of them to get access to any benefits. ;)

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I can see where this is going. It won't just be SMI interest paid it'll be the full repayment mortgage paid ie the taxpayer pays the capital off too.

it'll be because people have to get their lender to switch them to interest only when they are unemployed and all the forbearance hassles.

it will be used to sell it to the taxpayer that's their money will be used to pay off people's capital but as a sop the state will take a stake in the equity.

I can sort of see where this is going too, but a guess it won't apply to elderly / retired who cannot be forced to downsize from massive homes.

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Because of the hassle of housing homeless people, there simply isn't the stock. Plus it doesn't look good in the press people being made homeless by govt inaction. Although does it make more sense to pay "rent" and not the mortgage?

However this could cause houses to correct as people won't want a wealth store that can be tax by the state in this manner. Although no surprise that the govt is going after hard assets that they can leverage up. If the IMF come calling will they demand payment for all of these stakes held?

But the mortgage is the "product" the banks are selling. So the state paying peoples mortgage, is the state buying the banks "product". i.e another bank bailout.

... and to think, politicians then go around saying "the banks are a great wealth creator for the country" Not surprised, the politicians are bankrupting the country to keep the banks "profitable".

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Yes and those with BTL portfolio's claming benefits.

I'm pretty sure only your main residence is exempt from the assets means testing and hence BTLs would be classed as an investment.

Edited by goldbug9999

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I posted this elsewhere a few weeks ago.

I am reliably informed of a retired couple who recently and allegedly sold their house for 300K, stuck it in investments off-shore, moved into rented and then applied for a housing association flat. They got one - amazed me how they got one so quick - in a very nice area within a few months of selling.

Sounds like there is something very dodgy going on there. Most councils won't accept people who own their own home/sold a home and with that amount of savings they could rent in the private sector. Probably didn't declare most of that on their application.

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I'm pretty sure only your main residence is exempt from the assets means testing and hence BTLs would be classed as an investment.

You may be right but Stella English was able to claim. Also there was someone on my Facebook feed the other week bemoaning being out of work for a year "but off down to Brighton where I have two lovely tenants for my flats."

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I posted this elsewhere a few weeks ago.

I am reliably informed of a retired couple who recently and allegedly sold their house for 300K, stuck it in investments off-shore, moved into rented and then applied for a housing association flat. They got one - amazed me how they got one so quick - in a very nice area within a few months of selling.

errr.. that's fraud mate. simple as. If the council had any half decent financial investigators, it would be an easy win.

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