Government says benefit claimants more responsible than workers
The majority of the Mortgage Market Review changes will come into effect on 26th April 2014, where new rules will mean that borrowers across the EU will be refused a mortgage if they fail a standard affordability assessment.
A recent FCA survey into the MMR-readiness of mortgage providers has also show that 15% of companies did not have firm plans in place for the new regime, with 8% of firms that returned the survey saying that they are not going to continue to conduct mortgage business.
So basically if you want to take a mortgage out you will have to undergo extreme scrutiny to meet certain criteria regarding your affordability; e.g. prove what you spend on shopping, prove how much you spend on child care, prove how much you spend on standing orders, prove how much you spend on fuel, etc…
However we are all aware that, like an MOT, affordability is only relevant to that period in time and can change within 24 hours.
LRS wonders if this is like other Government “schemes” that try to make it look like they’re doing something positive but in the cold light of day are totally ineffective to the real issues going on.
Is the real point behind the MMR to allow the Government, like “Big Brother”, to scrutinize everything that we do, everything we earn and everything that we spend our money on? This is the type of data that they will have access to – so will this all become relevant in any future tax investigations, etc …? And unless we can all prove beyond reasonable doubt that we have not spent more than we should have, within a certain period, some jumped up underwriter in an office somewhere will be telling us we cant afford our new home …?
Maybe this is just us being cynical landlords, and maybe it will control the mortgage market more stringently, however lets consider the hypocrisy in this.
Why is it that the Government needs to bring in more legislation in order to make sure that we are making the right decision in taking out our mortgages? They claim that it is to make sure that we are not overspending and to make sure that we manage our finances properly. LandlordReferencing.co.uk find this highly hypocritical because
this very same Government, that feels the need to scrutinize middle class hardworking people, seem to think its perfectly reasonable that benefit claimants who spend the tax payers money on whatever they want [ RE: Universal Credit ] do not have to prove what they intend to spend “their money” on – e.g rent.
So the real question here is : Does the Government think benefit claimants are more responsible than hard working people?
At LRS we believe that if we consider putting restrictions on public borrowing this should not start with peoples homes – it should start with finance agreements on cars, credit cards, pay day loans, etc… all things that are relevant to preventing people from paying their mortgages.
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