Wednesday, December 10, 2008

Mortgage deferal not for BTL, second home or those with savings

No mortgage help for £16,000 savers

People with savings above £16,000 or second homes will not be allowed help from the Government's new safety net for homeowners, it emerged today. Buy-to-let properties and homes with a mortgage of more than £400,000 will be excluded from the scheme. Details of the plan were released by Chancellor Alistair Darling this afternoon as he appeared before the Treasury Committee in the Commons.

Posted by 51ck-6-51x @ 03:10 PM (2136 views)
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36 thoughts on “Mortgage deferal not for BTL, second home or those with savings

  • last_days_of_disco says:

    The politics of this are simple. Save our sub-prime buddies in the midlands. The Labour party knows which palms to cross. The sub-prime map of Britain fits these demographics exactly. What they will do over the next two years is interesting if they win. The debt they will owe this powerful lobby will be huge.

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  • This brainwave is supposed to keep families in their home,—so what about the poor sods in rented accomodation when their BTL landlord goes bust?!!!

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  • Thinking of it… bailing out the btl’ers is impossible. because their “loss of income” equates to a loss of tenants or to lower rental rates. how can you insure a business against a “loss of revenue” that is ludicrous
    in fact BTLs are not in the poo poo for the credit crunch, they are in the sh… because of their brittle business plans and faith in “prices only go up” mantra
    how can they be bailed out? impossible. I think they are toast…. truly and finally and irreversibly

    the scandalous tax break these crooks are enjoying should be scrapped too

    wait to see the comments of the few BTLs and EAs that lately have started posting on this site

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  • Another buy no pay later plan – along with deferrals for businesses in the form of tax deferral. Good job we are going to be more prosperous after the next election.

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  • Call me old-fashoined, but I’d use up my savings to pay off my debts before I went cap in hand to anyone. Why are the government allowing people to keep a 16k nest egg while the taxpayer bails them out????

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  • I wouldn’t worry too much about BTLers getting tax breaks. The fact that they can’t offset the capital losses against their BTL income (and a good proportion must be making an ongoing loss) is good enough for me. We also have to look forward to the IR getting tough on those who ‘confused’ the repayment part of their loans with the interest part.

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  • If only I had the time, I’d try and organise a rally outside Westminster (probably get beaten up by the police for it though) to express my total and utter disgust towards this incompetent bunch of twerps who are jeopardising our future generations with this outrageous debt and moral hazard. I mean, honestly, what is the f#’ing point of spending my life saving, buying unemployment protection insurance and so on and so forth – if the a*holes who got us in this desperate situation manage to escape virtually Scott-free at my expense. I think we should organise a movement – who’s in?!

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  • This is obscene. Not only has Brown proven to be the the least prudent Chancellor in History and spent like a crack addict who won the lottery. Now that houses have a chance of returning to a reasonable price those of us who WERE prudent and SAVED are being punished by attempts to keep prices over inflated at unrealistic and unsustainable levels.

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  • I am staggered that Clowns popularity is rising for his management of this crisis. It shows how stupid the electorate really are. If they vote for him they deserve the poverty that he will deliver to them. I pity everyone else.

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  • landofconfusion says:

    @ 03:40PM 5. crash n burn said…

    > I think we should organise a movement – who’s in?!

    Me.

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  • A big movement of brown stuff deposited on the doorstep of no 10 would be a good start.

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  • george monsoon says:

    Baaa humbug!

    my meagre savings are making about 10p interest a month thanks to this noddy government. About a month ago I threw in the towel with regard to buying a house, because it would be foolish, and I will be over 50 before the market recovers enough for it to be a viable investment. Its pointless saving, so I am going to spend, spend spend.. the rest will pay my rent, which I am in a much stronger position to negotiate at the moment…

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  • Forget rioting, just vote with your feet – you are free to look for work globally – take advantage of your mobility, some people in the not too near future would give their right arm for what most people have on this website, i.e. freedom

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  • hubbers @ 7 – “It shows how stupid the electorate really are. If they vote for him they deserve the poverty that he will deliver to them. I pity everyone else.”

    Let’s hope this doesn’t happen, or the conspiraloons will claim they were right all along!

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  • I would not get too excited about being rescued by the conservatives, Im old enough to remember the mess they got us into!

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  • mark wadsworth says:

    That £16,000 savings rule (that prevents you getting any benefits whatsoever) is a joke. If you actually had £16,000 in savings, you’d just make a one-off payment on the mortgage and claim the interest free holiday straight away. The alternative is use it up over a few months repaying the interest. Or just lying on the claim forms.

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  • Mark – indeed I was going post that myself. Maybe it will make some people think of actually doing that though – especially now savings rates are not what they used to be. The best savings are those of repaying debt, why would anyone have savings and a mortgage (offsets springs to mind) unless there was an arbitrage opportunity (baring stupidity of course)?

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  • So, it’s alright to have £10,000 in the bank, choose to ignore a few payments on your mortgage and expect the taxpayer to pick up the bill. After all that Crash Gordon said about prudence, I am staggered that those who chose to be prudent during the years of greed and excess are the very ones that are getting punished for their sense. All along it seems that CG really wanted us to spend spend spend, and boy did he get his wish.

    To me the man is a traitor, whose sole interest is now to cling onto power at all costs – stuff the country. Echoes of Mugabe anyone?

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  • …I suppose some savings do make sense though – for short periods of rain (I guess 16K is the treasuries upper limit on that thought).

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  • uncle tom – the tax payer only underwrites, and it’s not an option to not pay, there has to be a valid reason like redundancy, but I hear ya.

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  • You wouldn’t use the 16K to pay off your mortgage because at the end of the 2 years you could still be repossessed and lose the 16K.
    Instead you give it to someone to “look after” like you wife/kids/parents depending on whose name the mortgage is.

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  • Me too post number 5.

    There are a lot of solvent people with savings and investments in this country as equally pee’ed off with this government as you are.

    If only the people of Britain and the British media could get as passionate about the government wasting their tax money as they do about saving a few foxes in the country side we might get something done about this ridiculous money wasting government.

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  • holding out

    Spot on. You could also put the savings into a pension scheme. At least that way it will come back to you and would not affect this or any other benefits you were entitled to.

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  • I see the dodgy method of holding out would make sense… but I imagine that during a repossession order there would be an investigation into your financial history – anything more than something like 3K can not be called a gift. I’d hope this person would be imprisoned.

    luckyjim
    If you put it into a pension is it untouchable by the courts for your debt service then?

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  • With interest rates at close to 0%, why not just withdraw the £16,000 and keep it under your mattress. That way you’re not even lying by saying that you don’t have any savings.

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  • I think debtors can take future earnings from a pensions into account if you go bankrupt. They can’t just take the money back out of the pot though (as they would with savings). Also, your pension pot doesn’t count as savings when means testing.

    I’m sure their are other ways. Fine wine ? Antiques ? Things that store wealth but don’t count as savings. The bailifs could get their hands on them though.

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  • their ?

    Thank goodness malct is here to jump on that one.

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  • paul – good point. Take the 16K and run to Europe before the pound sinks further!

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  • yes LJ but malct will be sitting on the sidelines reading this and shaking his head in dismay, standards of spelling and grammar have really slipped badly and he’s been gone but 24 hours.

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  • so if you have £16500 in the bank, you stop repaying your mortgage but take a nice holiday before getting the tax payer to pick up the tab.

    Moral hazard.

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  • Count me in post number 5.

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  • people are making certain assumptions about the £16k rule.
    I) is probably that up to £16k you recieve the full benifit of gorverment largess….oh dear, not so – the amount you would have been entitled to if you were on the bones of your bottom and had not a shiney shilling, would be the full amount…..thereafter it is reduced pro-rata so that at (say £15.999k) you would recieve a sarcastic letter and a cheque for thrupence….and a bill for the stamp.
    2) Is that you can lie to anyone in officialdom now……lie detecting software is routinely used to weed out fraudsters. (I’ll buy a bottle of best Malt to the first journo that interviews a Senior Minister using the same software, and confronts the interviewee with the results – see if they think it’s a justifiable moral hazard then.

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  • No one has pointed out that this scheme does not really benefit the mortgage holder, but the banks. The mortgage will be increased by the missed payments, which will have to be paid back over the life of the mortgage (or longer). So the householder will pay eventually (or be repossessed anyway). The bank gains because it gets continued reduced payments for 2 years, and then more payments thereafter on a bigger mortgage, some of which is unwritten by the govt. So it will be in the banks best interest to get as many people as possible on to this scheme so as to maximise the amount they can get either in higher payments over the life of the mortgage, or govt handouts when the house is repossessed.
    I cannot see that it is in the householders interest to go for this scheme. It is a govt backed home equity withdrawal scheme (incidentally will it allow you to go into negative equity, or will you have to have sufficient equity to cover the roll up amount? And how will they value the houses to determine what the equity is?). Any IFA worth his or her salt should advise not to go for it. You either pay extra for the rest of your life on an asset falling in value, or get repossessed 2 years hence after more house price falls have eaten away what little equity you had before. You’d be better off walking away, and going bankrupt if necessary. You’d be free from that in less than 2 years.
    BLTers are excluded which in itself should ensure house prices continue to fall. If negative equity people are also excluded there will be no floor to the market at all.

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  • All you have to do is transfer your money to a current account and leave it there. the only proof you will have to show the IR to get the benefits will be to show your savings account and it will be empty or you wont have one. The IR will not ask for what your current account as it is seen as an account for day to day expense. they are only interest in savings accounts.That easy.

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  • ……..you think, FJC ? You be surprised, what all sort of petty officialdom knows about you , right now. Anti – terrorism? ……thats a big blanket – you have been warned.

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  • ….and what you propose is actually criminal tax evasion….or benefit theft, but you get my drift – you must think carefully about proposing such actions. Enough from me.

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