Mortgate safety net disappearing

[Wayward]

VIs lobbying for the tax payer to continue bailing the housing market...

 

BBC....

"Ministers should consider strengthening the safety net for homeowners struggling to pay their mortgage, a report suggests.

Help for this group introduced in response to the financial crisis will be largely withdrawn by 2022.

Academics, commissioned by lenders' trade body UK Finance, said the government should review its position"

 

Most of the comments (at least the highly rated ones) might have been from us...ie why the should the tax payer be bailing out home owners at all...it only encourages folk to over extend.  As such I assume that is the intention.

http://www.bbc.co.uk/news/business-42311583

[spyguy]

Bailing out the banks and mortgagee.

Both should be let to go to the wall.

[Freki]

14 minutes ago, spyguy said:

Bailing out the banks and mortgagee.

Both should be let to go to the wall.

Too bad we can't push

[anonlymouse]

Interest Only Mortgages are going to be the next PPI, I can see it coming. Everyone blaming someone else except for themselves for overextending their finances and not giving themselves some wiggle room.

[Wayward]

Surprised little or no interest in this topic...preventing forced selling is absolutely fundamental to maintaining high prices.  Repos are reportedly at the lowest level since 1982...wonder why prices are resilient and won't correct..?  Look no further.

[Sancho Panza]

19 hours ago, anonlymouse said:

Interest Only Mortgages are going to be the next PPI, I can see it coming. Everyone blaming someone else except for themselves for overextending their finances and not giving themselves some wiggle room.

Only problem is the banks that issued them will be too bankrupt to pay out.

[wasbuckers]

1 hour ago, Sancho Panza said:

Only problem is the banks that issued them will be too bankrupt to pay out.

They already are bankrupt, they are just able to hide it well enough ATM

IO mortgage 'misselling' (or jubilee) is going to be needed at some stage simply because the banks need to clear old debts in order to sell new loans.

[deadasadodo]

Doesn't seem like a particularly generous benefit - nothing for 39 weeks, nothing if you've got too much savings, interest only set at 2.19% and a maximum loan size of 200k. That said, moving it to a loan secured against the house seems fair enough.

IMO true out of work benefits should be shifted to a system where you get a single payment that's a proportion of your former salary for a set period of time, with the job centre leaving you to get on with it unless you ask for help. After, say 6 months, proper recruitment professionals should be brought in to help people get jobs. The current system penalises people who have bothered to save money and seems to assume you're a shirker from day 1.

[stuckmojo]

12 hours ago, deadasadodo said:

Doesn't seem like a particularly generous benefit - nothing for 39 weeks, nothing if you've got too much savings, interest only set at 2.19% and a maximum loan size of 200k. That said, moving it to a loan secured against the house seems fair enough.

IMO true out of work benefits should be shifted to a system where you get a single payment that's a proportion of your former salary for a set period of time, with the job centre leaving you to get on with it unless you ask for help. After, say 6 months, proper recruitment professionals should be brought in to help people get jobs. The current system penalises people who have bothered to save money and seems to assume you're a shirker from day 1.

This. 

[Wayward]

17 hours ago, deadasadodo said:

Doesn't seem like a particularly generous benefit

Maybe but with repos at the lowest since 1982 it is an important prop protecting high prices.  TPTB know that without distressed sellers there will be no crash.  The market may drift but not crash.

[Ah-so]

On 12/12/2017 at 2:55 PM, wasbuckers said:

They already are bankrupt, they are just able to hide it well enough ATM

IO mortgage 'misselling' (or jubilee) is going to be needed at some stage simply because the banks need to clear old debts in order to sell new loans.

Writing off IO mortgages (or giving people houses they haven't paid a penny for) would send several of our largest financial institutions insolvents. Writing off the old debts would not help them write new loans. 

[mattyboy1973]

One thing that has always annoyed me is that a home is never counted as an asset for means-testing purposes, whereas a fairly small pot of savings will push you over the threshold for just about anything (is it £16k for benefits, in general?). It is simply not fair, on many levels, for renters. Having said that, supporting mortgage payments when someone is on benefits is likely the best and cheapest solution, since the alternative is eviction and paying housing benefit (most likely) to a private LL.  Although contrary to the HPC doctrine I think keeping people in their homes and providing the funds to do so by way of a loan is a pretty reasonable solution.

There was a ridiculous situation a few years ago where the govt were paying out vastly more than current interest rates, and home owners were pocketing the difference - why is it so hard to simply match the payments to the individual's current interest rate, instead of this single fixed figure?

[Venger]

On 12/12/2017 at 7:20 PM, deadasadodo said:

IMO true out of work benefits should be shifted to a system where you get a single payment that's a proportion of your former salary for a set period of time, with the job centre leaving you to get on with it unless you ask for help. After, say 6 months, proper recruitment professionals should be brought in to help people get jobs. The current system penalises people who have bothered to save money and seems to assume you're a shirker from day 1.

Maybe homeowners should put some money aside into savings for lifes ups-and-downs, instead of expecting Govt to flood them with even more money, but I see you don't even like that.

Let's see... just about 9 years of rates slashed from the beginning of the last homeowner-victimhood, to give millions of owners opportunty to rebalance their financial positions.

Rents.. well they didn't really get cut by BTL landlords.

The one who thinks the young should embrace sofa-surfing, a spiritual destiny, and turn their backs on the appeals of homeownership (while getting passionate about cuts to the range of benefits...SMI/Pension Credit that prop up those living in homes and no longer paying full mortgage for themselves), claims renters can relax because renters can claim benefits to help with the rent....

... It's worse for renters because we have no stake in homeownership, others getting support to prevent them from selling (SMI/Pension Credits), in all the mix with the BTLers buying up homes and inventory on market for sale at multi-decades lows.   And the money renters have saved vs runaway HPI++++...say £10K (not equity in a house that can run to £100Ks) gets classed as why they can't claim for financial help with rent from Govt.  Whereas owners can have stacks of equity and still claim.   The difference in positions is extreme, and you're whinging that homeowners still don't have it good enough.

[deadasadodo]

41 minutes ago, Venger said:

Maybe homeowners should put some money aside into savings for lifes ups-and-downs, instead of expecting Govt to flood them with even more money, but I see you don't even like that.

Sorry V, but this is is a case where a renter gets a better deal than a mortgage payer - renters can get housing benefit to pay their landlord's mortgage pretty much immediately, whilst a mortgage payer has to wait 39 weeks to recieve support (both savings and partner income dependent). You can't remortgage and borrow money against your mad gainz if you don't have a job.

My point was that national insurance should act like the name suggests - if you pay in a lot you should have be able to get a reasonable pay out (for a limited period) that helps towards your outgoings if you fall on hard times. The current system rewards people that spend rather than save whilst they're employed, whilst job centre personnel treat everyone like shirkers rather than focusing their efforts on people who genuinely need help geting back into work.

[Fletcher]

6 hours ago, mattyboy1973 said:

One thing that has always annoyed me is that a home is never counted as an asset for means-testing purposes, whereas a fairly small pot of savings will push you over the threshold for just about anything (is it £16k for benefits, in general?). It is simply not fair, on many levels, for renters. Having said that, supporting mortgage payments when someone is on benefits is likely the best and cheapest solution, since the alternative is eviction and paying housing benefit (most likely) to a private LL.  Although contrary to the HPC doctrine I think keeping people in their homes and providing the funds to do so by way of a loan is a pretty reasonable solution.

There was a ridiculous situation a few years ago where the govt were paying out vastly more than current interest rates, and home owners were pocketing the difference - why is it so hard to simply match the payments to the individual's current interest rate, instead of this single fixed figure?

Absolutely agree. These are the kinds of things I wish I had known when I woz young.  The system is rigged to support property owners at virtually any cost. Probably wasn't always the way. But it seems for the last 20 years or more, that's been the case.

[deadasadodo]

10 hours ago, mattyboy1973 said:

One thing that has always annoyed me is that a home is never counted as an asset for means-testing purposes, whereas a fairly small pot of savings will push you over the threshold for just about anything (is it £16k for benefits, in general?)

Yeah, and if you're sticking money away for a deposit then you're more likely to have a reasonable pot of savings that makes you ineligible for benefits. The changes the OP highlighted seem like a reasonable compromise, with any support for mortgage payers based on a loan secured against the house. 

 

[iamnumerate]

49 minutes ago, deadasadodo said:

Yeah, and if you're sticking money away for a deposit then you're more likely to have a reasonable pot of savings that makes you ineligible for benefits. The changes the OP highlighted seem like a reasonable compromise, with any support for mortgage payers based on a loan secured against the house. 

 

Best idea make it all workfare based and ignore savings that way we all benefit and prices drop.

[Wayward]

21 hours ago, mattyboy1973 said:

One thing that has always annoyed me is that a home is never counted as an asset for means-testing

Yes owners of land and property are privileged...well known to the HPC cohort I think. Gross injustice.

[CunningPlan]

16 hours ago, deadasadodo said:

Yeah, and if you're sticking money away for a deposit then you're more likely to have a reasonable pot of savings that makes you ineligible for benefits. The changes the OP highlighted seem like a reasonable compromise, with any support for mortgage payers based on a loan secured against the house. 

 

This is true. In my case, if my neighbour and I both earn £40k per year, we could both get a bursary to avoid the £6k per year per child state school fees.

The difference is, he owns his £0.5m house outright so is still exempt.

I am a filthy renter paying £20k per year rent but have £15k in cash savings. So I still have to pay the school fees in full.

The rules are the first £10k in cash or £0.5m in property are ignored for bursary applications.

Seems wrong to me.

[Venger]

On 13/12/2017 at 11:59 PM, deadasadodo said:

Sorry V, but this is is a case where a renter gets a better deal than a mortgage payer - renters can get housing benefit to pay their landlord's mortgage pretty much immediately, whilst a mortgage payer has to wait 39 weeks to recieve support (both savings and partner income dependent). You can't remortgage and borrow money against your mad gainz if you don't have a job.

My point was that national insurance should act like the name suggests - if you pay in a lot you should have be able to get a reasonable pay out (for a limited period) that helps towards your outgoings if you fall on hard times. The current system rewards people that spend rather than save whilst they're employed, whilst job centre personnel treat everyone like shirkers rather than focusing their efforts on people who genuinely need help geting back into work.

Savings/Income dependent... and for income you wouldn't need to claim if circumstances had not changed - yet not equity. 

Back in 2009/10 I fully recall this system had one poster spend her husband's big redundancy and their other savings on a big home improvement session with new bling kitchen, car and holidays - all so they could qualify for SMI (which at that point had been made easier to claim, with 39 week rule ripped up).  She was right.. "Gov won't let HPC happen" - that's what she said as they worked the system.

Well I'm glad it's back to 39 weeks for the owner side. 

As I already pointed out, for the renter who has saved a spit of any money towards buying a house (with prices as they are in so many areas) you get no state help with rent. 

For the renters with any savings (vs these house prices), which often has been a slog to get to, while renting vs HPI+++,  there is no immediate state financial help, and no state financial help after 39 weeks either.   That's my position and the position of many other renters - vs  quest for package of super payout financial help to owners with mortgages (no matter if they have £100,000+ of equity).   

If you truly wanted fairness you could have extended it to tenants/renters who have saved a deposit of £20K or even lot more.   Instead yet again it's "renters get it better" when that's so far from the truth of matters

Yes some renters have no savings.. a lot of them perhaps tenants of Mr Wealth Creator who has bought up hundreds of ex-LHA homes, and terraces, and is 'expert' at renting to lower income families.  In this system fewer of them saved much  where previously, before prices were so high, they had opportunity to perhaps save £10K which may have gone somewhere toward buying/deposit.   

Yes they can get state-help toward their rent, but I'm reading more and more BTLer Landlord positions that they want to get such tenants out (S21) when circumstances change - and also that the claimed state help doesn't cover the rent the landlord charges.

We've had 10 years of rates floored, mortgage rescue, SMI was made easier to claim, for the owner side.   You've been able to get (still are) state financial help with mortgage if you've got £100K+ of equity.

Doesn't surprise me you're here arguing for more props for owner side though; for reworking of NI payouts for State to pay out big time for the owner side.  It's not that way and it shouldn't be that way - and the only way it could be justified is via a loan against the equity in the home, instead of new system based on NI paid in.   

And also for renters with no savings, any state help is going to the landlord, and not anything they have any financial interest in themselves.  Whereas owners get advantage of it going to covering their very own position.  And renters who want to become homeowners, then find themselves up against more owners with no need to come to market (sell/downsize/move to cheaper area), with a system that floods the owner with even more state money, protecting the HPI for longer to the disadvantage of the priced out renter-saver.   

Forum has had this discussion many times over about NI paid in and 'what you deserve' if you encounter changed circumstances and smarter minds than me on subject had convincing arguments for why its a safety net only - although I can't recall one super post on the matter atm.    How about taking responsibility for own mortgage/position for once, saving money.

[Venger]

On 13/12/2017 at 11:59 PM, deadasadodo said:

My point was that national insurance should act like the name suggests - if you pay in a lot you should have be able to get a reasonable pay out (for a limited period) that helps towards your outgoings if you fall on hard times.

The current system rewards people that spend rather than save whilst they're employed, whilst job centre personnel treat everyone like shirkers rather than focusing their efforts on people who genuinely need help geting back into work.

There are limits to what State can pay out.  NI hasn't ever been about paying out huge sums to homeowners/claimers, although it's been pretty generous with SMI overall.

I tell you again - I qualify for no help with my rent for I have over £25,000 in savings.  I don't know the limit required to qualify but I should imagine having £25,000+ is way over savings level one can have, and qualify for financial-help with rent.

 That 'super post' I have distant memory of (limited benefits) was to do with it incentivising people to take responsibility for themselves, no matter how much they've paid in with NI.    Younger workers (GenRent) paid less in anyway just on time, yet want owners (inc massive equity rich) to get big payouts to protect market at margin.

As a renter, the current system means I do have to save, for can't rely on the state for anything.   It's not my fault if owner side think it's a party of spend and don't save anything.  You're suggesting that they should be paid out more in benefits (owner side) because they don't know the hardship of the world if their circumstances change, for they've been on a spending bender?

You're introducing and mixing in other things here.  I don't know much about the job-centre/employment office, but unemployment is at record lows.  Yes I have read about tougher criteria, move to UC, sanctions for being late/not showing applied for jobs - which do at times seem harsh.   However I doubt they treat 'everyone as shirkers'  - but there are tighter controls for claiming, and they want people back into work.  They have people to process and some of it comes down to owners applying for jobs / having to cut their cloth.   It's not JC responsibility to find them an exact match for type of work/well-paid work they are looking for.

Edited December 16, 2017 by Venger

[Venger]

Also renters (with no savings) have limits on what state will pay to their rent (30th %ile or worse now).

Most renters are just 2 months from leaving 'their home' at whim of landlord.  I mentioned my rent was £9500 a year the other day.. it's actually just over £11,000 (just over £900pm)   

Post replies below from 2012 - from a thread begun by homeowner on HPC, having massive whinge about how hard/unfair his life is, after change to his income/employment.

Hmmm... my position since 2012.... HPI++++++ prices even further out of reach, so many older homeowners happy with HPI+++, loads more money paid to BTLers.   And back on HPC forum... homeowners arguing that renters have it better than equity rich homeowners. 

Bought in 1998.  As I remembered it, a flat in prime-ish area where values very expensive (maybe London).  Self-admittedly over 50% equity.   Small mortgage at outset in 1998 vs what would be required for most renter-savers to buy it today, mad-gainz HPI, and still got mortgage, just a couple/few years away from state-pension age.

He too thought the imbalance was on renters side !!!  (Ridiculous and just homeowners who can't get their blinkers off imo). 

Young vs HPI++++/BTLers/and payouts for homeowners to keep them in position, vs renters who've managed to save a spit of money (vs these house prices.. even back in 2012 nevermind heading into 2017 where prices here now 40% more expensive than 2012 - disqualifying them for help with rent.

Oh and all the stuff from him about renters being "bitter/hating on homeowners" like him.. and how 'my equity means nothing to me - it's my home'.   Well equity does matter.  1998 buyer... HPI++++, still moaning.  Prices can't fall unless more owners willing to accept lower prices.  Not for state to come in (as some here want more of today) paying out massive new benefits for homeowners !!!   Going on and on how renters have it easy/better.   So untrue (deliberately using only the poorest tenants... and even them likely to have had hardships put on them via BTL/HPI+++ extremes).  Doesn't surprise me it's from owning side who aren't keen for any HPC.

Quote

"In other words, if you have a mortgage, and lose your job thanks to the current and previous government and the banks there is no safety net, no matter how much you paid in taxes over the years."

On 20/05/2012 at 1:02 AM, Beary McBearface said:

I believe that the part of the problem that you are overlooking is savings.

Before taking out a massive debt that would be impossible to service during a period of unemployment in addition to a deposit a prospective borrower should have enough additional savings to carry them through a period of unemployment. Seeing as it is plainly ridiculous to suppose that during a 25-year mortgage term there will not be a period of unemployment it's a bit daft to enter into a mortgage which blows up if you lose your job.

What the government are trying to say to the electorate via this policy is:

"This party's over

The bells are ringing themselves"

The principle of paying the interest echoes this - interest rates can spike but the repayment part is stable so you can always be sure that you have enough savings on hand to take you through say 3 months of unemployment.

Tiny mortgage (but enough to still put him at risk and 'needing state help' for hadn't paid it down - buyer of 1998)... moaning on and on how easy life is for renters vs someone in his position !!!!

On 20/05/2012 at 1:31 AM, Executive Sadman said:

Guess they should have bought insurance for this then, shouldnt they. Or at least set some money aside.

No sympathy from me. Thousands get evicted by landlords every year, no one crys for them. Private home ownership is supposed to be about responsibility.

If theyve got equity, they should rent/downsize. It what my folks had to do in the 90s. It not going to kill them. Might hurt their pride a bit, but thats probably no bad thing.

On 20/05/2012 at 1:53 AM, okaycuckoo said:

Please start with the simple question: why is the state involved in these transactions?

The most needy must be helped, but when the state steps in it complicates the definition of neediness until service of the needy becomes a justification for state borrowing ... oh, I give up.

On 20/05/2012 at 2:43 AM, The Ayatollah Buggeri said:

This mindset is exactly what Labour sought to promote in inventing the system whereby the taxpayer foots the bill for the mortgage interest of the unemployed in the first place.

As others have pointed out, the alternative is make your own contingency plans, e.g. saving enough to get you through a period of unemployment, insuring your mortgage payments against job loss, and living within in a buffer built into your means that can absorb shocks such as IR rises, rather than spending every last penny you earn.

Quote

The renter (with no savings who qualifies for financial help with rent) gets no long term benefit from renting other than a roof over their head.

The home owner gets an asset.

Rob is only renting because SMI priced him out of the market. Allowing other people to live in houses they cannot afford, to prevent price falls.

What do you think would happen to house prices if renters weren't being forced to pay taxes to pay the interest on unemployed people's mortgages?

 

On 20/05/2012 at 10:03 AM, DavidSWP said:

I believe equity should be taken into consideration when deciding if a home owner receives mortgage interest assistance. This should be along the same lines of savings held by a renter to make things fair.

On 20/05/2012 at 10:17 AM, goldbug9999 said:

You got to be f*cking joking, as a renter with substantial saving I'm totally disqualified from all benefits whereas if I use that same money to buy a house all of a sudden I can get them all.

And in my area prices are up some 40% since 2012.... yet still the calls that the homeowner doesn't get enough help if their circumstances change - vs the got-it-all-renters. 

On 20/05/2012 at 11:04 AM, Redcellar said:

You're kidding right?

So if I have an asset that can be sold and give me £100,000 yet I decide not to sell it, then I should have the government pay my interest so I can keep hold of it and benefit from it? Oh I see now why it's called 'benefits'.

As a renter, where's my free cash please? I have savings over £15,000 so would get no housing benefit if unemployed.

And the OP misses a major point making it sound like a mortgagee would be in dire financial straits and would get their rent paid. The majority would still have cash after a forced sale and therefore would not qualify for HB. The posters who said you need to save or get insurance are quite right. Either is an option. If you decide to spend the money instead of protecting yourself then you made the choice so get on with it.

No wonder Britain is broke. Bailing out the feckless all the time to the extent that it becomes expected to be covered should anything go south. And guess what, people are now expecting all their losses to be covered even if they don't really need it.

 

On 20/05/2012 at 11:07 AM, Ausdave said:

I disagree, any mortgagee is aware of the phrase.

'Your home may be reposessed If you do not keep up repayments on your mortgage'

Whilst I sympathise with anyone in financial difficulties we must all take responsibilities in life for our actions.

Products exist out there to protect for these unexpected events in life. People should enter into debt with eyes wide open.

On 20/05/2012 at 11:11 AM, Redcellar said:

Absolute rubish man. You could buy mortgage payment protection insurance and there was nothing wrong with it, so long as you bothered to read the contract and bought a policy that provided the cover you wanted. 

The other option is to have a pool of money and a plan B. Or you can just sell up and go rent again. You might not live in the city centre because it's too expensive, but then again I can't live in a mansion but I want to. When life throws sh1t at you you just adapt, compromise and get on with it.

On 20/05/2012 at 11:14 AM, porca misèria said:

Quite the opposite. If I'd had a mortgage last time I was out of work I could've claimed JSA and SMI. But as a renter I could claim nothing, 'cos non-house assets disqualify you.

Yep. Means-testing is the root of financial injustice.

 

On 20/05/2012 at 11:19 AM, Venger said:

When did you buy? 3 months savings when buying? I wouldn't feel safe leaving it to that minimum, but then I've never been minded to think of claiming benefits as a fall back plan. Those who do think that way rushing to bigger mortgages, outbidding competition, and thinking they're had done by now. No doubt you deserved a house above all others.

No one should ever have a mortgage? No, but if you chose to run with such minimal savings and outbidding others, then meet the consequences if you lose a boom job and can't get another. It's a market, not taxpayers keeping you in homes you can't afford.

No one should have a mortgage if they expect the taxpayer to step in and keep them comfy in homes they chose to buy but can't afford over the long term. And those who've been paying tax for 30 years, mostly reaping all the big HPI years, can downsize. Not to a bedsit as GF3 twists it, when such owners are way more likely to have riches of equity.

1998 !! He bought in 1998.   Income/employment change just a few years from state-retirement age, living in one of the most expensive cities, with fortunes of equity.

On 20/05/2012 at 11:26 AM, Redcellar said:

+1

Whats really interesting is I believe we've seen a big shift with people not willing to make significant changes to their lifestyle to adapt to current personal economic circumstances.

Instead they scream for help and claim inequality of some sort in a mad attempt to self justify the predicament that they got themselves into.

No one made a person get a mortgage and not have sufficient reserves to keep it going.

No one made them decline insurance to protect it.

Choices, choices but always someone else's fault, or 'it's just not fair'.

Like bl00dy toddlers, or a baby throwing it's toys out of the pram, and you can't show them that's the way they are behaving as they just won't listen.

On 20/05/2012 at 11:46 AM, GinAndPlatonic said:

This is the whole problem. UK Psyche now is one of entitlement and many people do not realise that we need to take care of ourselves and our own. Its our responsibility wherever possible to do this and not the state.

Too much control has been wrought on the UK population in the guise of a caring state. It is a nonsense.

The UK government is akin to an overbearing parent who will not let go and at the same time is draining the abilty of its children to look after themselves. Keeping the citizens ..children dependent on it by taking any self sufficiency away via the back door in the shape of taxes and doling out cash from its T it..then it is the fattest and greediest ones who hog the T it.

And it creates hardship to others who have to pay for it, who already have so much less than the homeowners equity rich who push for even bigger protections, still in 2017, where prices in this area 40%-ish up since 2012, when we already renting for years priced out.    And so many owners enjoying low rates (via policy/qe).   

They just want to stop anyone needing to sell for lower prices imo.   It becomes plight.  Whereas renters (including with young families of their own) 2 months away from losing their homes to BTLers, always on edge, priced out, in house price bubble in so many areas.... vs the plight of the 1998 owner !!!  

On 20/05/2012 at 12:29 PM, ParticleMan said:

I think it's a wonderful idea for the state to continue to put a floor bid under the price of any speculative, highly leveraged instrument.

For instance there's no safety net under my Lotto tickets, and that is unfair considering that mortgage holders and bank equity holders have one.

There's also no safety net under millions of subscriber's online poker habits.

Or under spread betting portfolios.

Heck, even Joe the fruit-stall operator has no safety net - sometimes he just goes home with half the produce.

Won't anyone think of Joe, and his rotting fruit?

Equity Rich homeowner, living in super expensive home... loss of income/wanting better state payouts, comparing his plight as worse than renters.....

Quote

Particleman, yes, I actually have more than 50% equity. But it's all paper money. My home was not an investment, I have no intention of selling, ever, and just hope I can get a job, any job, soon.

The equity does not make my situation easier - I, unlike you renters who lose your jobs, face losing my home simply because I lost my job. Not my flat, my home. Just like your rental flats or houses have in many cases become your homes.

This place is no home to me.  Just a place where we pay £900pm in rent, and two months from being out at whim of landlord, and where the property has an issue we can't press the landlord to get fixed.   And vs house prices that have ballooned and ballooned, and so much equity wealth with the older owners/BTLers.

On 20/05/2012 at 12:47 PM, Venger said:

There is nothing wrong if you had wanted a crash so other people can trade up in the market. I made an assumption, and you've come back with new information, which hardly supports your position as still wanting a crash.

You've now stated you had a £30K+ income until recently, bought 14 years ago.

As ParticleMan guesses you must have 50% equity, and I can see you've just confirmed that you have.

The rules were in place about rents being paid vs mortgage support for a long time. It's not something new, other than taxpayer supports having improved for those with mortgages needing help over the last few years.

And as its been pointed out to you, many of us hoping to buy have capital we've been saved towards buying whilst renting for years. Which rules us out of claiming full HB support anyway. Unless we were to throw in the towel towards ever owning, and spend it all, rather than mucking in and taking a lower paid job or lower cost rental if our circumstances change..

If you still are a hard HPCer you'd understand that people with lots of equity are part of the mechanism for bringing house prices down, when benefits don't cover all their mortgage and living costs, to force a situation where they have to take action such as downsizing or moving to a cheaper area.

On 20/05/2012 at 1:17 PM, EmmaRoid said:

Its a sorry situation but i'm not sure how you seem to expect a bigger freer lunch

 

On 20/05/2012 at 2:00 PM, LiveinHope said:

You are missing an important point that imo confers a benefit upon home owners

In terms of state benefits, savings over 16K are taken into account.

When a home owner loses their job, money tied up in their asset is not counted.

On 20/05/2012 at 2:38 PM, Executive Sadman said:

Its worse than that.

If a homeowner doesnt make mortgage payments, he may get kicked out.

If a tenant doesnt make rent payments he (almost certainly) will be kicked out.

But also, if his landlord doesnt make mortgage payments, he again, almost certainly will be kicked out. This time through no fault of his own.

Supposedly, home ownership is about responsibility. If people cherish 'their' homes so much they can at least have a rainy day fund.

Homeowners discriminated against, give me a break. They're the only cohort afforded a completely tax free vehicle in which to build equity.

 

On 20/05/2012 at 3:01 PM, Squeeky said:

Dalek, Sorry to hear about the work situation, but your position isn't that bad.

You have:

a property, 50% equity of 250k+ and less than 100k mortgage.

You've got 2 years until you can draw down on private pension, another 15+ for state pension to kick in.

So you have a couple of choices.

1) Stay where you are, hope you get another job in time and prevent the bank from foreclosing.

a) if you don't find something in time, fall back to option 2.

2) Sell up and move

On 20/05/2012 at 3:10 PM, libspero said:

I'm not sure about "ocean of hatred for home owners", you do seem to be effectively calling for all of us to make your interest payments for you!

That aside, you are down £200 a month based on the difference between SMI and your actual mortgage repayments?

You don't have a "rainy day" fund by the sounds of it, so is there someone in your family who would be prepared to help you make the repayments until you can afford it again?

Alternatively, if you still have a large debt hanging over your head, and perhaps no immediate job prospects on the horizon could you sell the flat and move in with nearby family until you get yourself set up again? Not paying any rent or housing costs would protect your capital until you find work again..

 

On 20/05/2012 at 3:45 PM, Beary McBearface said:

IMO you are wrong about this. I often think that it would be better if this site had been called house price madness, but it is what it is.

I think that many posters are primarily interested in the housing market because of the way that it has intruded into and loused up so many parts of the economy.

I sympathise with the fact that losing a job may mean that you have to leave your home and more importantly you may have to move away from your friends.

However, this financial support to home owners is being cut because as a nation we cannot afford it, and one of the reasons that we as a nation cannot afford to support distressed home owners as we may have done in the past is that in the past we were doing it with debt and we are approaching a point in time where taking on more and more debt is increasingly dangerous.

We are borrowing more just to stay where we are in terms of the provision of benefits. What is spent on paying mortgages can't be spent on other societal needs. Life is about choices.

When I look at the world I see that a crash is the least of our worries but that debt is the cause of our predicament.

Good luck.

 

On 20/05/2012 at 4:11 PM, Loui said:

Times are hard for everyone. It's not your fault that your home has risen in value but the fact is that it has. If I lose my job tomorrow I have to start spending my savings (which I hope one day will allow me to buy a home).

If a home owner with equity of £70000 loses their job why should they have their asset protected when the same does not apply to the saver?

Yeah yeah - the hardships... vs approaching another £50,000 in rent paid out from my side to a BTL landlord, and wider house prices up 40% from 2012.

And now more 'HPCers' in 2017 here arguing for more support for the homeowners in event of change of circumstance to their incomes.  After 39 weeks, flood the homeowners with mad-gainz from NI paid in the past so they don't have to adjust/sell!!   "Renters get rent paid for them."

On 20/05/2012 at 4:44 PM, Venger said:

Well changes you're proposing makes it even worse. My savings are towards my future home, and harder saved for over the years, renting at the same time, than free equity via decade+ of HPI in your case. Make way for the special home owners.

Most renters don't have over £16,000? Have you any idea how much a renter who wants to buy has to scrimp together to get a deposit together at current asking prices.

It's our precious savings, and our future homes and roof over our heads, when we can buy at lower prices and quit the rented sector.

 

On 20/05/2012 at 5:18 PM, Squeeky said:

Okay you're 53 now, you took out a 25 year mortgage at 39 when the compulsory retirement age was 65, so you were never planning on retiring early.

Looking at the front page on this website, prices have gone up by over a third since 2000, probably more for london, so skip over that.

And interest rates have plummeted to previously unknown depths, so the cost of borrowing fell a lot since you took on the debt, so you should be sitting quite pretty.

For arguments sake say you took out a 90% mortgage and paid £130k and had a 13k deposit + 117k mortgage.

If you had kept the13k cash at the bank you may have got an average of 5% interest over the last 14 years, which would have left you with 25k and some change.

Being generous I am going to say that the rent and the mortgage+repairs are equivalent... But I suspect renting would have higher associated costs in practice.

So comparing the two situations:

Renting = 25k... and entitled to no benefits, but may not have to move, however you are at the landlords discretion...

Buying = sale price 200-250k (this is HPC so I'm going to be a little pessimistic) - mortgage 100k - 13k initial investment = 87 - 137k... and entitled to lots of benefits (in comparison)

Possibly the profit you've yet to realise by taking a leveraged risk is the reason peeps are not very sympathetic. In addition you are entitled to some benefits that someone who didn't leverage wouldn't get. If you were renting I would suspect you would have moved on a few times in those 14 years for one reason or another as well.

While you think you're in a sticky situation, you appear to have benefitted from HPI quite significantly along with low interest rates. So look on the bright side, you could have been renting since 2000. You could very easily have been served a section 21, as your landlord doesn't deal with unemployed people or a host of other reasons. Yet you seem to think that people renting get a better deal, which is a little hard to swallow. It is not ideal having to move and change your lifestyle when circumstances change, but the grass isn't as green on the other side as you seem to think it is.

 

On 20/05/2012 at 7:04 PM, Redcellar said:

Brutal.

But if you boil it down to just the facts - renters are forced to use their pile of cash to pay rent until they reach £16,000 of savings/investments, not so the mortgagee.

By the way, dalek still hasn't recognised that both myself and Bloo Loo were factually correct on this when they were making stuff up about renters getting a better deal because they got the rent paid for the first six months irrespective. Absolute fantasy on their front. But then if you recognise this, the argument of being hard done by self implodes.

Here's a simple example so everyone can understand:

1. I have £50,000 savings and I rent and am made unemployed. I spend all but £16,000 on my rent for the next X years.

2. Instead of having my £50,000 savings that I used on my rent when I was unemployed, I had a mortgage and so £50,000 went into payments on the mortgage on a house. I can now claim mortgage relief payments to keep me in the house for free and I still have my £50,000 savings invested in my house. "it's not bl00dy fair, renters get a better deal" ?????

 

On 20/05/2012 at 7:32 PM, ChumpusRex said:

No. He's saying that people should be appropriately protected, before taking on a long-term financial commitment. I made sure I was.

I bought a suitable insurance policy that would protect me if I lost my job, or got ill. I had a financial adviser advise of what would be appropriate insurance cover, had a broker construct/find an appropriate policy and I had my solicitor check the small print to verify that it was suitable.

Unable to get re-employment after expiry of a fixed-term contract - covered.

Unwell and unable to work in my chosen profession, even if I could do another job - covered.

Partner of child unwell and I have to look after them, so unable to work - could have been covered, if I asked for it.

Death or critical illness - covered.

Obviously, this was an expensive policy - but the cost of the policy was added to the cost of the mortgage when I did my affordability calculations - as I considered the insurance a key component of the mortgage, without which it would have been inappropriate to take out the mortgage.

The fact is that for the overwhelming majority of people taking on mortgages, appropriate insurance was available, if they had simply looked for it (I accept that there may be exceptions, e.g. self-employed people).

In a number of ways, seeing the generosity of SMI was galling - as this is something that I had paid (dearly) for on a private basis, as that was the responsible thing to do - only to see mortgagor's losses suddenly nationalized when the number of feckless started to surge.

 

On 20/05/2012 at 10:14 PM, Russe11 said:

This thread has to be a wind up

The OP wants to stay in the mortaged property, wanting the state to service the debt.

says they have 50% equity, from HPI, which is not their fault... but won't move and cash in the equity down sizing or relocation.

Why don't they just rent and not have any of this worry?

On 20/05/2012 at 11:20 PM, Squeeky said:

I think I have a different opinion on this, I'm not convinced that a mortgage should have a safety net, unless you buy insurance specifically for that purpose. Unsecured personal loans or other items purchased on credit aren't backed by the state why should a house be?

The state has a interest in keeping its citizens housed, fed and to prevent them from marching their leaders to the guillotine. What you get fed, where and what you get housed in as well as what is used to placate the populace is all up for debate.

The old phrase, "Your home is at risk if you do not keep up with the repayments" springs to mind. Not very helpful in your situation admittedly, but it must be something everyone is aware of when they take on a mortgage?

On 20/05/2012 at 11:23 PM, Beary McBearface said:

.....It's not that there is no safety net, it's more that the level at which safety is set is not going to save you from having to sell. We are like spoilt children - all of us. If you are sleeping in a hedge it's rough. If you are sleeping in a hedge in fear of your life it's really rough. If you are forced to sell and move then you should acknowledge that you live in an age when you have free healthcare an entitlement to some benefits and good reason to hope that the economy will turn around sooner or later.

As I recall it we had a something called the Cuban missile crisis not so long ago. Mutually assured destruction. Death all round. Roll with the punches. Tomorrow is a promise to no-one.

If you are on the level, then it sounds like you are hurting and I respect that. If you think that the safety net is too low, that's your opinion. If you think that setting the safety net higher would save public money, that's your opinion and I think you are wrong.

As to the suffering that's coming, IMO for the time being all bets are off. F**** knows where this goes next. Nowhere good IMO.

Some are acting like spoilt children.  I read a lot of history - I know of real hardships.

Well that was 2012..... more HPI++++ galore, HPI+++ worship, new BTLer full-on double-down... massive amounts of money paid to already housing wealth/really rich BTLers..... 

And so many hardships of today are not hardships (true) - but that's no excuses for bending reality that homeowners have special plight - and so many people deliberately trying to make it out that renters somehow have it better (when it's totally wrong vs HPI+++/housing financialisation and fact so many renting-savers qualify for no state help in event of income change, and have to cover it out of their savings (they made against HPI++++/renting years and years).

On 20/05/2012 at 11:38 PM, Russe11 said:

I don't think most posters here are against home ownership, what they want to see is market correction, for that to happen sellers need to start taking a loss or mortage holders need to default, resulting in forced sale.

Just want balanced system, where some here arguing again for more for homeowners !!   All these years a renter, even just on my time on HPC... vs HPI++++ and BTLer doubled down... QE/rates floored to give opportunity to 'innocent' <2007 homeowners.  Come on.

On 21/05/2012 at 12:08 AM, manchester50 said:

Haven't read the whole thread so apologies if I duplicate.

In summary: what a load of ********.

If you take on a mortgage then you look at the rules, your job security, future career prospects, your savings etc and you take a view on risk, and then you plan to mitigate that risk.

When I last had a mortgage my total monthly outgoings were ~£2500. I kept an accessible fund of ~£30k to cover me for a minimum of 1 year's unemployment (actually would last for longer of course, as I'd have asked to go IO for a while and cut back on my outgoings). Now I have kids so am more cautious and if/whe we buy again I will keep 18-24 months cover for outgoings.

I'm not a huge fan of insurance (beyond house/contents) so have not had/am unlikely to take out mortgage protection/job loss insurance. I've friends who only have cover for their outgoings for 6 months and have taken out those policies. I know other people who have plunged every penny into a deposit and are screwed if they hit a tricky spell.

Basically, you make your bed and then you sleep in it. Plan your own finances. Don't expect the state to prop you up if you've spent too much money/not kept enough back. It's that attitude that's caused a good chunk of the financial problems we have today.

 

On 21/05/2012 at 1:09 AM, Venger said:

You're doing a lot of deflecting blame and lashing out on bitter renters, Osborne, bankers, and projecting possible delusional thoughts at supposed rich people getting richer. You're posting about Arab Springs hinting at Government overthrow here, when, if that's coming, it's coming from the younger renters, outraged at the unfairness of bailing out home owners and insane house prices not correcting. Not from home-owners with loads of equity unprepared to adjust their circumstances.

House prices don't fall just because of external problems like Greece. They fall when existing home owners are under pressure in the market to sell, and have to put their homes up for lower prices, or accept ever lower offers, and transact at those lower prices. Lower than similar homes were selling for the month/year before, in the open market. That's how prices fall.

And they rise when people willing and able to pay more for houses, month after month, year after year... zirp, scheme to protect HPIers equity to extremes... and even approaching 2018 homeowners VI wanting them to get more help vs the have-it-all renters.

On 21/05/2012 at 2:22 AM, FLASH_2007 said:

As someone who is currently unemployed and supporting myself fully with my savings it does annoy me that people with significant equity such as yourself are getting their mortgages paid whereas I am paying all my living costs out of my own pocket and my savings which I intended to use to purchase a house are reducing.

On 21/05/2012 at 9:47 AM, Si1 said:

jesus - so you were involuntarily forced to take out a mortgage then?

no, the same safety net exists for you - sell your house and rent if you cannot afford the repayments

Great reply to all his position that renters get it better than owners.   

On 21/05/2012 at 10:50 AM, ozbear said:

^^ This

If you rent and save into other assets you have to drain those down, if you save into a house you get assistance, very unbalanced!

 

On 21/05/2012 at 12:12 PM, EmmaRoid said:

Crackers, can't believe this is still running.

Despite trying to sum up the differences in support for tenants and owners,

Depite asking why the OP didn't sell up to benefit from the rental utopia of unemployment,

Despite describing how I as a tenant am due nothing in benefits,

Despite saying why it may not make sense for HMG pay your mortgage even if it were cheaper than LHA,

I, along with many others, am described as the vitriolically irrational.

Renters are not just "given the money" to stay in their homes. They must meet a number of means tested requirements and are really assessed for their housing need and then, only then, are they given enough money to rent a property at the bottom 30% rate of the local market for that size of dwelling.

You, dalek, have been reading too much Daily Mail.

On 09/01/2013 at 7:23 PM, goldbug9999 said:

Are they b*****s - all you have to do a homeowner is as soon as you know your going to be out of a job, just pay down all your savings into your mortgage because unlike a renters savings, equity doesn't count against means tested benefits.

 

On 09/01/2013 at 7:26 PM, goldbug9999 said:

No amount of tax paid by you justifies your lifestyle being subsidised by other peoples taxes.

On 09/01/2013 at 7:46 PM, Si1 said:

there IS a safety net

they just won't pay your mortgage for you

 

Edited December 16, 2017 by Venger

[Bland Unsight]

On 12/12/2017 at 2:55 PM, wasbuckers said:

They already are bankrupt, they are just able to hide it well enough ATM

IO mortgage 'misselling' (or jubilee) is going to be needed at some stage simply because the banks need to clear old debts in order to sell new loans.

This is really wrong, I mean so wrong it should get some kind of prize. I note that Ah-so has already picked up the idea that an interest-only mortgage jubilee would take out most of the mortgage lending banks. The only way that you could do a interest-only mortgage jubilee would be to nationalise the banking sector. The numbers are eye-watering. Taking the Lloyds Banking Group 31 December 2016 balance sheet as an example fully 31% of the outstanding loans to owner occupiers are interest only. That is a cool £70bn worth of interest only mortgages. For scale that is more than three times the bailout extended to Lloyds TSB plc in 2008.

RBS, which is still in state control, has 12% of its owner-occupier lending stock on interest-only terms and a further 5% as part interest-only and part repayment:

Source

For the uninitiated "bullet principal repayment" is an emerging piece of industry jargon which is replacing the more familiar term interest-only. Also worth noting is the business of "conversion to amortising"; again, for the uninitiated, amortising just means you pay off the loan as you go - i.e. it means a repayment mortgage. Notice also the explosion of the value of mortgages reaching maturity over the next seven years and also pay due heed to the fact that this issue has been well understood for well over a decade, that new interest-only lending essentially stopped in 2012 and the it was effectively regulated back to the lending volumes consistent with its proper role as a niche lending product for wealthy and sophisticated individuals back in 2014.

Anybody posting about an interest only jubilee is either ignorant, trolling or just kidding themself.

The next thing that is really, really wrong with the post is the idea that banks need to replace old lending with new lending. A reasonable way to understand the behaviour of the big lenders (in the hope of perhaps correctly anticipating their behaviour) is to borrow some of ideas from the excellent Fragile By Design and mix them in with a bit of public choice theory. The self-interested agents that determine the behaviour of the too big to fail banks are the banks' executives (particularly those on the board), institutional investor and the state (as represent by the Treasury and the Bank of England). The executives need to show profitability and, sometimes, growth - they only really need to show growth when they are small enough to be at risk of hostile takeover and that threat is itself partially determined by the broader credit environment. None of the major UK mortgage lenders will be worried about the threat of hostile takeover. Growth can also be a way to show profitability. The executives can take big risks today (e.g. the small lenders presently piling into buy-to-let) in order to secure fees today and thus generate profits this year and then let tomorrow worry about tomorrow.

An eloquent example of this dynamic playing out at the moment is the behaviour of the Lloyds Bank balance sheet. Lloyds spat out TSB in 2013 and after the split their total UK mortgage lending was £303bn. As of their most recent annual reporting their mortgage lending stood at £293bn. Lloyds are clearly focusing on profitability rather than chasing growth.

Finally, the banks are not bankrupt and the upcoming misfortunes of Generation Rent From the Bank (being the cohort of borrowers who lashed their financial future to the interest only lending and sky high house prices of the 1997-2008 boom) will not bankrupt them. The average loan to value of the Lloyds interest-only mortgages is presently 43.8%. House prices could halve from present prices and the borrowers will still be able to repay the bank (sorry, 'make the bullet payment on their principal', obvs) with the proceeds of selling the house. The end of this story is just some people who had expected to be homeowners who end up renting in retirement.

Source

[Bland Unsight]

On 14/12/2017 at 4:29 AM, Fletcher said:

Absolutely agree. These are the kinds of things I wish I had known when I woz young.  The system is rigged to support property owners at virtually any cost. Probably wasn't always the way. But it seems for the last 20 years or more, that's been the case.

I am massively dubious about this argument and I think it ignores two key things.

Firstly it ignores the extent to which a lot of state intervention which has helped mortgaged owner-occupiers was actually aimed at the banks and the mortgaged owner-occupiers were inadvertent beneficiaries of helped aimed at the financial system.

Secondly it ignores the amount of time that has passed since 2008. There is no doubt that when communicating with the public the Bank of England has sought to justify quantitative easing by talking about so-called wealth effects and rising asset prices; if asset prices (house prices) are higher people spend more and borrow more and then spend even more and this helps the economy stay out of recession and acts as a bulwark against the threat of a debt-deflation spiral. However at the same time the Bank has set out in both its key reports and public statements by its senior officials that it knows that these wealth effects aren't all that potent, in terms of GDP growth, and that these policy choices are having non-trivial regressive re-distributive impacts. This kind of intervention is not politically sustainable in the long run and things will come to a head sooner or later (and if you think Jeremy Corbyn has managed to hang on to the Labour leadership because of the quality of his oratory and his slick media performances you're wrong; setting aside entirely the anticipated effectiveness or ineffectiveness of his proposed interventions, his mere existence is evidence of the underlying conflict that is being bred into the bones of our society by current policy defence of the status quo).

You can throw the indebted a lifeline in a crisis and turn a blind eye to the moral hazard but you can't sustain that line of policy if it doesn't fix the problem and it creates a new bigger problem as well. As more time passes the pressure to unravel some of the policies which have helped out the over-indebted thus far will grow and grow and grow. The weakening of SMI is just one more sign that the tide has already turned.

There are lots of things this country doesn't make so much of any more, but two are bubble equity and mugs with telephone number interest-only mortgage that they'll never repay. Brown's earlier generosity with SMI was part and parcel of how things were in 2008/2009 but that'll soon be ten years ago. There's been a lot of water under the bridge since then.

Edited December 16, 2017 by Beary McBearface

[Venger]

It's buckers/'wasbuckers' - what do you expect? 

Place is teeming with HPI trolls/BTL trolls - although I have to keep reminding myself of the blindness here. 

People so inner-good that they are led like puppets into the HPIers/BTLers positions.. ."They just wanted a home" - "Yes I'm going to have sympathy-sympathy if any HPC, for recent buyers not as intelligent as me/don't know what they are doing at all no matter the asking price" - x 8 years of posts and prices in some areas doubling or more" - (led straight into it by HPIers and BTLers on forum).

It serves his position to claim banks will go down in event of any HPC.  (Try get more nervy HPCer buyers buying)

It serves his position to want a debt-jubilee and savers even more wiped out.  (Try get more buyers in now)

HPIers/BTLers... I'm up against them elsewhere all seeking a debt-jubilee to save banks (and with their plans to buy more homes from the 6 they already have rented out to GenRent priced out).

Maybe he's selling a few BTLs into it.

Although all his thousands of posts (2004/2005 member irrc - certainly active in 2005) seem to have been stripped out of HPC,  with only a few quoted by other HPCers remaining.

Plenty of VIs here to spin their positions.  How BTL a greatness/providing homes / best investment returns for intelligent people - where else you going to invest (?).  How banks are toast in event of any HPC (x so many posts).  (Haha renters.. you going to get even more financial hurt on top of the BTL greatness I'm a champion of hurt). How your savings going to go poof (unless you buy soon).  How going to be mortgage jubilees for the debtors.   How innocent homeowners need more special protections (10 years of posts).  To be careful what we wish for.   On and on it goes.