Support for Mortgage Interest (SMI) why did it change from benefit to loan

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  • #112922
    martino

      Support for Mortgage Interest (SMI) help to pay the interest on your mortgage for people on certain benefits it use to be a benefit i be-leave did not need to be repaid . A  few years ago it changed , you still got the same amount  but it was a loan like a secure loan that needed to be paid  back with interest at about 2%.

      I think the government reason was it did want the claimant to benefit from SMI paying the interest ant the property increasing in value . i don’t understand why a home owner is being penalized like this .

      if the claimant lived in private rented accommodation then they would pay   housing benefit to the landlord who property value would go out each year an the landlord would benefit from increased value. As far as i can see its exactly the same

      property increases in value for claimant or landlord so they should treat housing benefit the same as SMI .

      The only difference is government pays SMI to claimant , and local council pay housing benefit to landlord other than that its the same or am i missing something .

    Viewing 15 replies - 1 through 15 (of 15 total)
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    • #112943
      rox
      Participant

        They giveth with one hand and taketh away more with the other… It’s how goverment works..

        #112951
        martino

          rox thats what i was thinking

          #112957
          Mossfinn

            As a home owner,  you will hopefully benefit in the long run from  the increase in value of the house so the logic is sound, albeit annoying.

            As this only applies to people on benefits, if the government were to apply it to private landlords who took tenants who were on benefits, this would mean that if two people approached a landlord wanting to rent his property, one on benefits, the other not, the landlord would get less rent for the tenant on benefits so it would lead to some landlords refusing to rent to people receiving benefits.

            #112958
            Saintsman

              Remember MIRAS, pity they took that away.

              #112960
              vinalspin
              Participant

                They already only give a % of rent to people on benefits and the tenant has to make up the shortfall themselves.

                #112962
                martino

                  vinalspin that is true they do only pay a percentage but they do pay most of it and the landlord benefits

                  #113004
                  Peter

                    I agree with you, Martino.

                    In the North East, property prices are suffering badly.  I paid K202 for mine in 2008 and it’s just been sold for K167.  In other words, K35 less 12 years later.  This is a common situation throughout the area.

                    Its maybe fair to have SMI as a loan if you’ve done well on your property but doesn’t seem right if you’re already well out of pocket.  Another thing to thank George Osborne for.

                    #113008
                    martino

                      Peter that’s a big loss

                      #113023
                      Peter

                        You’re telling me!  At least I’m alive and kicking to be able to complain about it 🙂

                        #113024
                        martino

                          Peter thats one way to look at it

                          #121995
                          martinod
                          Participant

                            Does anyone know why it was changed from benefit to loan  apart from saving money

                            #122007
                            Matt B

                              Help in mortgage interest payments was paid by DWP about 7 years ago and assume it is still the case. Housing Benefit (HB, now making up part of the living allowance of Universal Credit for some) can be awarded to a tenant renting privately but the govt will only pay an amount based on the claimants needs not the size of house they rent. In other words, a couple with one child would be eligible to a 2 bed Local Housing Allowance (LHA) rate but if they rented a 3 bed house they would see a shortfall between rent charged and housing benefit paid (known generally as the “bedroom tax” when a tenant rents a council house). Also, private landlords charge calendar monthly but HB paid 4 weekly so over a 12 month period, a private tenant would be charged 12 times but recieve 13 HB payments over the same period. In some cases this method of payment effectively ‘pays back’ the tenant the top ups they’ve paid monthly over the year.

                              I hope that makes sense, I easily can go off on a tangent/waffle on about this sort of thing! Hope the info helps any potential readers and best of luck to anyone struggling at the moment.

                              #122210
                              Littledave

                                Would you rather the landlord evicted the tenant on disability and rented the property to someone able to pay the full rent?

                                Why should the taxpayer pay to buy a person’s property?

                                #272945
                                MrRight
                                Participant

                                  Littledave you have a shallow mind I worked from the age of 16 left school on the 21st may 1981 that day was a Thursday, on the 22nd of may 1981 on a Friday I started working with my dad and I worked up to 2013 are you telling me I haven’t paid any contributions to this pathetic country, as I am disabled and unable to work and you are saying I am not entitled.

                                  #275726
                                  joss
                                  Moderator

                                    Littledave you have a shallow mind I worked from the age of 16 left school on the 21st may 1981 that day was a Thursday, on the 22nd of may 1981 on a Friday I started working with my dad and I worked up to 2013 are you telling me I haven’t paid any contributions to this pathetic country, as I am disabled and unable to work and you are saying I am not entitled.

                                    You do realise the post you replied to was made in August 2020?

                                    Joss
                                    Current car: Peugeot 308 GT Premium 1.2 Pure tech Petrol.

                                  Viewing 15 replies - 1 through 15 (of 15 total)
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