Countdown to the Spending Review: is mortgage interest benefit a cut too far?

I'd be interested to know why, as a renter, I do not get a similar benefit? I also need somewhere to live.

'Surprisingly, more than half of those eligible for SMI are pensioners eligible for pension credit'....

What the **** are pensioners doing with mortgages?!?! Nobody should be paying for a house after they've retired.

Just shows how ludicrously over-inflated house prices have become, and how irresponsible lenders have been in loaning people amounts they can't repay in their working lives.

Tough as it may sound, the government needs to stop paying any king of mortgage support to people over retirement age. They should have to sell up and either move somewhere smaller (i.e. a place they can genuinely afford) or into social housing. The taxpayer cannot and should not pay for people's irresponsible borrowing if there's no realistic chance of them returning to work and paying their own debts.

Sorry, that's just the way it is. The party's over.

The days of letting rooms are on the way back. That is the only way my three children have been able to fund their repayments - without calling on the Government for support..

Debt-free? Not quite sure what "party" you mean. I have fair idea that pensioners with mortgages found themselves in this position through, say, unemployment, divorce and then, probably after getting a job, being ambitious/responsible/self-reliant enough, taking a mortgage they reasonably believed would be paid for "in time" - rather than opting to throw themselves on the State for public rented property - then meeting up with other factors like Tory spite - depending on where you live.

Nice to see open-minded people free to comment here...

Good point Meltonion. When I bought my first flat I made a point of buying a two-bed, not because I needed it but so that if I lost my job I would be able to let the second bedroom - fortunately it never came to that.

That was in 1994, by the way, the last time we had a sensible government that didn't p*** away taxpayers' money bailing out people who couldn't afford their mortgages.

Of course, if enough people start letting out spare bedrooms the mythical 'property shortage' that's supposedly been supporting over-inflated property prices will vanish in a puff of.....er.......reality.

George Hill - I mean the party of deliberately ramping up house prices by lending irresponsibly. And my definition of irresponsible lending is to lend somebody an amount they can't repay out of their own earnings during their own working life - do you have a better definition?

If somebody's plans go off the rails because of divorce or unemployment its up to them to have a contingency plan in place (that would be part of my definition of responsible borrowing, by the way - see my last post).

The problem is that too many people have been 'ambitious' to use your word, and that doesn't necessarily go together with 'responsible'. It's just unfortunate that the banks have colluded with over-ambitious buyers to create this massive property bubble that's only just being allowed to burst.

If that makes me narrow-minded, so be it. If we had more narrow minded people we wouldn't be in this mess.

Debt-free. I am mainly reminding you that it would have been MORE irresponsible for someone "unintentionally" unemployed to throw themselves on the public sector. Perhaps that WAS a contingency plan - although, in my opionion, more irresponsible. The banks (at the time, rather than now) would weigh up the chances of their getting their money back. And lend accordingly. Even if an option was an old folks' home, still doesn't sound like all that responsible - and a mortgage WOULD be a better bet all round. Isn't it ALL a bet anyway? Especially NOW...

Why shouldI as a taxpayer bail out borrowers who have mortgaged to the max ofeten in order to ride the house price bubble encouraged by reckless lenders. Yes there are deserving cases so if the CML are so concerned let their memberspay the benefit or offer sensible insurance. The CML members have a responsibility.....if a car manufacturer sells a car that is faulty they have a responsibility...if financial institutions ramp up property prices and over sell mortgages whta is the difference... as always they expect a bail out!

Meltonian may be on the right track, my neighbours currently have the builders in to modify their home ready for letting part of it out.

Well let's see how many of those who are in trouble with over ambitious mortgages voted for the dimwits at westminster?

Shall we carry out a poll to decide how many tory voters expect to get help from their dodgy politician to help pay for their overpriced properties?

Benefit cheats aside, do you not believe that those who lied, who self certified, who got mortgages more than 10x their income should face their come uppance, now that their dream home has turned into a negative equity nightmare?

I used to let out a room some years ago and could be choosy who to rent the room to as there were so many prospective lodgers looking for the room 10 years ago.

5 years ago we could not be so choosy as there were always about 20 to 30 room adverts for our town on the website we used.

I had a quick look on the site recently and there were in excess of 200 adverts for the same area. It must be hard to get the equivalent rents now with all the competition.

Rose,

Don't be so naughty, not all self certified loans are Liar Loans. Not all aelf-employed borrowers can prove 3 years income, ie those who's firms have only been trading 1 or 2 years. Also those individuals who get income from different sources like investment income, maintenance payments and so on, yes many of these borrowers applied for self-certified mortgages to make it simpler.

I do agree if anyone took out mortgages at 10x income were taking a crazy risk but still it is not nice to lose the roof over your family's heads. They were caught up with the herd trying to get onto the property ladder and fell for the old trick from those with vested interests ramping up home prices.

If tens of thousands more lose their homes then taxpayers will be dipping their hands deeper in their pockets so really it is better that they don't end up losing them.

Must admit though that these low interest rates are pi$$ing me off as I had to shift out of cash deposits into the stock markets, however many are left with a pittance of interest being paid on their life savings so I can see your reasoning too

why should the government subsidise mortgages? its bizzarre. people shouldn't buy a hous if they can't afford the repayments!?!

Anon 1

During my years at university, which I hasten to add I self funded over 7 years, I worked for a property & financial services company - I know that there are accountants out there who signed off dodgy income & expenditure reports! I also know that people did lie about their finances on self certified mortgage applications - the loopholes were there because those who draw up the policies are aware of it, but it does not do to draw attention to these facts, not until the proverbial hits the fan!

I believed then that MIRAS was an unfair - it was done away with but mortgage interest payments for those who for no fault of their own find themselves having to accept charity from the taxpayer was not a very progressive method at all in addressing what IMO is the dodgy practice of government who use the property market as a way of bolstering the income for the treasury & also as a way to demonstrate how fantastic the growth in the economy is - these are all methods employed to keep those in the city happy, as well as create a feel good factor.

Loads of people have benefited from owning their property - but my question always will be: are bricks & mortar actually worth the overly artificially inflated price? Having lived in the UK for a couple of decades, I have seem some fantastic properties worth fantastic prices, but in the main property prices in the UK are not worth the pounds they cost - it is only bricks & mortar, a roof over your head - not something you can take with you when you leave for that other dimension.

The government created a monster by encouraging us all to be consumers, who in return know not when to stop - we are over eating (consuming) ourselves to an early death - hence the rising costs to fund treatment to stop people smoking, over eating, taking drugs - these are all areas where I do not want my taxes to be misused.

As for giving teenage mums homes in which they can live & have their chosen lifestyles - what a daft idea - no wonder there are now families who have never done a single honest days work in their entire life - no woner too that they chose to live on benefits when they would be penalised to go to work & pay for the roof over their heads, & basically take charge of their own lives.

My criticism of the cuts is that we are still in a recession - more workers are being made redundant, more people will have to join that dole queue, but the muppets at westminster seem to think that there will be jobs created by the private sector - let me inform you that many jobs in the private sector depend on the public sector (building contracts, contracts to provide linen, medical equipment, IT - you name it, they all rely on the NHS to pay their bills) but this fact seems to have eluded the dimwits who make the decisions.

Time for me to bail out as soon as my children free me from my chains!

If I dont get help with my mortgage interest if I lost my job then I would lose my property and as my mortgage is £750 per month I would be forced to rent in the private sector and would then get up to £1600 per month for the privarte rent paid by the taxpayer. It does not make economic sense not to help homeowners when they need it, after all the homeowner in employment has most likley paid tens of thousands and thousands in tax anyway based on the property and their income to the governent. If they need help, give it to them as it will only end up costing us more. and most of us have paid our dues.

The rising cost of the public sector is not necessarily to do with excess jobs and a lot of the wastage comes form complex employment legislation where local authorities fail to act due to repercussions from tribunals when they have certain situations to deal with. An example is dozens of employees and teachers redeployed to posts which would typically pay £15 to £25k a year but the council lets those redeployed staff retain salaries of £35, £40, £50k a year indefinitely. Cost of absence runs into millions every year and public sector employees KNOW HOW TO PLAY THE SYSTEM WELL and still get full pay. The recent ruling for Teachers holiday pay when on maternity or sick if they dont come back, minimum £8,000 up to £12,500 for every teacher paid for by the taxpayer. Manual workers on 40% bonus which is paid even when they are off sick, car allowances paid when they are off sick. The binman paid £51k leading to equal pay claims form cleaners and dinner ladies who also want £51 k per annum (Birmingham City Council) The list is endless, however the labour government has moved power from the employer to the employee leading to employment tribunal claims for practically everythin so what do they expect. Cust can be found, not necessarily by losing jobs but by being more proactive and stop putting up with the bull that bad employees dish out.

Rose, I am with you on all your points there including the Fibbers and their dodgy accountants but it doen't mean every self-employed person is fiddling the figures. I myself had a self-cert mortgage because i had 2 jobs and investment income and the rates offered at the time were good enough (1.5% above base rate).

Anyway, on to the dodgy accountants and don't forget the "payslip mortgages" which were freely available with brokers acting for Birmingham Midshires and pushed through very quickly for broker fees of around £1500 if the person who's name was on the mortgage had NO INCOME AT ALL.

These mortgages were often for residential purposes but used for HMO type rentals. I know because I lived opposite a mortgage broker who arranged these particular loans. He disappeared completely off the radar in late 2006, never to be seen again in Sunny Slough....

By the way Jon's post just below yours makes a very valid point too, well if this next drop in house prices does turn out woorse than expected and economy and job figures do not recover then a lot of homeownwers could be in that position and claiming rent through housing benefits rather than getting a bit of help with a mortgage which must be cheaper and better for the economy in the long run.

Jon Gallagher - if your mortgage is £750 the equivalent rent is going to be nowhere near £1600. My rent is £1300 and the equivalent mortgage even with a 25% deposit would be more than that.

Homeowners are also less likely to move somewhere for a new job because they're more tied down with a house, making it more likely that they will stay unemployed. I think it's a great idea for there to be a safety net but to distort the housing market by providing different treatment for renters vs homeowners is bad economic policy. I'm not eligible for housing benefit anyway because I have £80k in savings. But someone with £100k in home equity gets government largess.

There are those who are au fait with the system & do know how to get around obstacles - this is not confined to benefit cheats but even politicians, & businessmen/women who hold positions in past & present government posts! That is why focusing on benefit cheats & ignoring the others who enjoy far bigger benefits from dodgy government policies is hypocritical on the part of this government.

We have a system which can & is used to benefit those with the right connections & the knowledge thereof. If everyone of us employees went self employed, got ourselves a creative accountant, we could all be enjoying the privilege of anchoring of some tax haven - the systems set us up for the bailout of the banks - the cunning ones in the banking industry who have yet to hit the headlines have surely benefited from billions of taxpayers money, courtesy of dodgy government decisions.

It was not just G Brown's decisions that got us where we are, it has been the efforts of consecutive governments pallying up to multi nationals, & basically anyone who could lobby them at westminster stood a good chance to assist in creating policies where they are immune from prosecution, should the poo hit the fan, as it has done.