Archive for the ‘Affordable housing’ Category

Currently if you receive help with your mortgage payments because you’re on JSA, IS, PC, ESA etc then you the DWP pay as if the interest being charged on your mortgage is 6.08%. This means that regardless of your interest rate 6.08% is what you get.

Because interest rates have been rather low for sometime there are people on tracker or even standard variable rate mortgages who are having more than their interest paid.

Apparently according to the DWP

The current system of mortgage interest support means that 92% of customers get more help than they actually need.

Anyhow’s from 1st October 2010 Unfortunately from October 2010 the rate at which the DWP pay will change to the Bank of England average, currently 3.67%.

Apparently this is  To ensure that Support for Mortgage Interest (SMI) is better targeted

House doesn’t quite understand that but in any event it’s going to cause a lot of pain to a whole lot of subprime borrowers stuck on standard variable or fixed rates which are far higher than the ‘average’ and who do not a lot of chance of re-mortgaging to a better, cheaper lender.

Hrm… the Statutory Instrument’s explanatory notes state that

For that reason it has decided to change the standard interest rate to a rate based on the average interest rate published by the Bank of England for loans to households secured on dwellings on the grounds that this will continue to provide SOME (House’s edit) claimants with protection against repossession at the same time as providing better value for money to the taxpayer and addressing the deficit.
The explanatory note goes on to say that

Under a standard interest rate of around 3.66%, about 50% of support for mortgage interest claimants would continue to have their eligible housing cost met in full by their benefit award. 52% of support for mortgage interest claimantswould have at least 90% of their eligible mortgage interest outgoings covered by their benefit awards and 93% of claimants would have at least 60% of their outgoings covered.

House has done some digging and according to the latest information House could find there are about 220,000 people who receive Support from Mortgage interest. Now if 52% of people have at least 90% of their eligible mortage interest outgoings covered this means that 48 pct or 105,600 wouldn’t. Of these 15400 wouldn’t have even 60 pct of their outgoings covered.
 As those in receipt of SMI are obviously on rather low income then at least those 105,600 are going to be in some serious pain if they don’t get a job or something…

* House isn’t the best at statistics so apologies if any mistakes!

If you are an adviser best warn your clients!

Oh wait never mind the guidance says

The Council of Mortgage Lenders has told us that:

“lenders will continue to exercise forbearance where it is fair to do so for the borrower, and the borrower has a chance of rehabilitation. Although arrears levels may increase for those few borrowers whose new Support for Mortgage Interest payment does not cover their mortgage, this does not translate into an immediate possession risk.”.

What a load of old codswallop. House isn’t  sure how over 100,000 people can be considered a ‘few’.

The CCCS have a press statement here

The SI is here

The average rate can be found in the first tab of Table G.1.4 under the heading “CFM”, column “HSDE” on the Bank of England website (thanks Disability Alliance)


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Hove's affordable housing prospects look bad...


As property investors run for the hills or back to their towers to count their remaining pennies so another grand housing development looks like it’s going up in smoke.






Whilst the redevelopment of the King Alfred Centre was never particuarly popular and the company behind it, Karis, may have been somewhat dodgy it would have provided about 300 affordable homes.

Although the definition of affordable has been shown to be a rather elastic to say the least this news helps highlight just how flimsy the Government’s reliance on private finance to help meet the demand for affordable housing is.

Still I’m sure the NIMBYists will be happy.

 * As you can see I never took GCSE art.

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