Taxpayer support

[RonJeremy]

Unless we know how many people on tax credits got a mortgage and wouldn't have without those tax credits, I doubt we can say with any certainty that they have inflated house prices.

 

We weren't getting any tax credits when we got our mortgage - it was a self-cert which to me seems more reckless by the lender. They may have asked for work histories, I can't remember, but they knew my other half was on a fixed contract with no guarantee of further work. As it is, it's always been affordable and we don't get tax credits.

 

We'll have to see if a significant amount of people get repossessed after losing tax credits - until then we won't know how much of a factor they have been in the housing market.

 

It was the borrower who had to pay it back. It was the borrower who bought the product. Each person who borrowed too much needs to take personal responsibility. All the misbought PPIs, endowments, self certs are now being subsidised by those who made the right decisions and didn't over buy.

[I1L2T3]

Its up to them whether they include them, what you dont appreciate or fail to get is the significance they give to them will vary. They will understand about changes in government, its just a risk and one they take into account.

 

have you actually got any articles or research on the impact of tax credits on the housing boom and morgage market, will be happy to read them.

 

Some lenders refused to include them as income but others did allow it. With a bit of research it'd be easy to work out which were the irresponsible lenders.

 

But, you are arguing some did lend and you think it is OK. Maybe an increase in the amount lent could be 50%, say £80k to £120k!! Still want to argue it can't have had any impact on the housing market? Do you think it is right for the taxpayer to pay for other people's mortgages?

 

Or maybe even for benefits income to be used to obtain credit cards and loans?

 

It was wrong. Should never have been allowed.

 

---------- Post added 22-10-2015 at 07:34 ----------

 

Unless we know how many people on tax credits got a mortgage and wouldn't have without those tax credits, I doubt we can say with any certainty that they have inflated house prices.

 

We weren't getting any tax credits when we got our mortgage - it was a self-cert which to me seems more reckless by the lender. They may have asked for work histories, I can't remember, but they knew my other half was on a fixed contract with no guarantee of further work. As it is, it's always been affordable and we don't get tax credits.

 

We'll have to see if a significant amount of people get repossessed after losing tax credits - until then we won't know how much of a factor they have been in the housing market.

 

I agree self-certs are even worse and another indicator of an out of control and unethical banking sector.

 

Bottom line though - do you think it is right for people to use benefits income as a lever for taking on debt? I can think of a few limited cases but in general terms it has got to be wrong.

 

I think it's very likely that we"ll start seeing some issues with debt repayment after April.

 

---------- Post added 22-10-2015 at 07:37 ----------

 

It was the borrower who had to pay it back. It was the borrower who bought the product. Each person who borrowed too much needs to take personal responsibility. All the misbought PPIs, endowments, self certs are now being subsidised by those who made the right decisions and didn't over buy.

 

If we look at the title of this thread Ron we're talking about taxpayer support for taking on debt, and for maintaing payments on that debt.

[RonJeremy]

Some lenders refused to include them as income but others did allow it. With a bit of research it'd be easy to work out which were the irresponsible lenders.

 

But, you are arguing some did lend and you think it is OK. Maybe an increase in the amount lent could be 50%, say £80k to £120k!! Still want to argue it can't have had any impact on the housing market? Do you think it is right for the taxpayer to pay for other people's mortgages?

 

Or maybe even for benefits income to be used to obtain credit cards and loans?

 

It was wrong. Should never have been allowed.

 

---------- Post added 22-10-2015 at 07:34 ----------

 

 

I agree self-certs are even worse and another indicator of an out of control and unethical banking sector.

 

Bottom line though - do you think it is right for people to use benefits income as a lever for taking on debt? I can think of a few limited cases but in general terms it has got to be wrong.

 

I think it's very likely that we"ll start seeing some issues with debt repayment after April.

 

---------- Post added 22-10-2015 at 07:37 ----------

 

 

If we look at the title of this thread Ron we're talking about taxpayer support for taking on debt, and for maintaing payments on that debt.

 

I agree with you. The taxpayer should not be subsidising people's mortgages. Benefits are too generous if someone uses it to buy a mortgage when already on a high income.

It's wrong to pay it to someone who just uses it to buy shoes.

[I1L2T3]

I agree with you. The taxpayer should not be subsidising people's mortgages. Benefits are too generous if someone uses it to buy a mortgage when already on a high income.

It's wrong to pay it to someone who just uses it to buy shoes.

 

When you look at it the reality is it was an acceptance by banks that tax credits were to be considered as wages.

[Cyclone]

Of course it's reckless. Utterly reckless. As we can see there are about to be big changes to the tax credits system.

It's no more reckless than taking net income from work into account.

There could be big changes in PAYE, or in a persons working status.

A lender taking tax credits into account can have no idea how the system will change. It's not measurable risk.

Whereas you're claiming that PAYE is?

On the other hand a track record of employment is a measurable risk.

Actuaries will have loads of data on how to measure that. They can't measure what the government will do with the benefits system.

Yes, but they can't measure what they government will do to the entire tax system, which determines all income, from work or otherwise.

WTC are just a variation on a higher personal tax income threshold.

 

Even worse, where families are concerned and even if the system remained static, when children reach a certain age the tax credit tap starts to get switched off. How lenders have been able to dish out 25-30 year mortgages based on that is beyond me. The loans are effectively sub-prime.

It's beyond you how income at the time is taken into account, and not how that income will change in 10 to 20 years?

 

---------- Post added 22-10-2015 at 09:03 ----------

 

It was the borrower who had to pay it back. It was the borrower who bought the product. Each person who borrowed too much needs to take personal responsibility. All the misbought PPIs, endowments, self certs are now being subsidised by those who made the right decisions and didn't over buy.

 

An amazing attempt to not blame the expert lenders for lending inappropriately, shifting the blame onto the lay people who took the advice of those experts!

 

---------- Post added 22-10-2015 at 09:04 ----------

 

I agree with you. The taxpayer should not be subsidising people's mortgages. Benefits are too generous if someone uses it to buy a mortgage when already on a high income.

It's wrong to pay it to someone who just uses it to buy shoes.

 

So if WTC were converted into personal tax allowance, how would you feel?

 

Because taxing someone and then giving it back, is a lot like not taxing them in the first place...

[RonJeremy]

When you look at it the reality is it was an acceptance by banks that tax credits were to be considered as wages.

 

Indeed - the lender and the borrower were wrong.

[TJC1]

When you look at it the reality is it was an acceptance by banks that tax credits were to be considered as wages.

 

Benefits shouldn't be used for mortgages and shouldn't be used to subsidise private business or landlords either.

[999tigger]

Benefits shouldn't be used for mortgages and shouldn't be used to subsidise private business or landlords either.

 

So if you cant use benefits for rent and you cant use them to pay a landlord rent, then where are you and your kids meant to live?

 

---------- Post added 23-10-2015 at 00:26 ----------

 

Indeed - the lender and the borrower were wrong.

 

Why they were wrong? Its pretty meaningless without more detail, but if I was doing a financial calculation hen id want to take into account all their income as that would influence my decision.

 

Still waiting for some data or research from a credible source that explain what they think the size of tax credit funded mortgages are in terms of the market and the risk they pose.

I'm open minded, but have asked 3 times for some credible research/ articles on this subject. I'm interested to see if theres a financial aramageddon thats being touted.

 

With the way tax credits work, then i doubt youd get a massive mortgage. They may in fact have an existing mortgage, but I see no problem using tax credits to pay that as they will need somewhere to live. They are only going to get near the top end of tax credits if they have kids 3+. Renting is probably going to be more expensive.

[TJC1]

So if you cant use benefits for rent and you cant use them to pay a landlord rent, then where are you and your kids meant to live?

 

 

It is used and should be used for rent by vulnerable people. But it shouldnt be to subsidise private landlords and inflate the housing market bubble.

 

---------- Post added 23-10-2015 at 06:30 ----------

 

All that nonsense with social cleansing and million pound council houses. A consequence of decades of mismanagement and failure to build adequate affordable housing.

[Cyclone]

So are you saying that private lets shouldn't be possible?