Response: Support for Mortgage Interest consultation

By: Nicola Hughes  Published: February 2012


Support for mortgage interest (SMI) provides a lifeline to nearly quarter of a million people who are struggling to keep up with their mortgage costs. SMI claimants include vulnerable and low income homeowners, unable to make ends meet in old age or due to job loss, disability, or the cost of caring or lone-parenting. This is a vital safety net that helps to prevent homelessness. It is also extremely cost effective, with the average weekly payment to recipients just £30.

Summary

We are disappointed that the government has not taken this opportunity to review and reform the safety net for homeowners more holistically. Millions are struggling to pay their housing costs and often resorting to risky credit in order to keep their heads above water. Job security for many is low and interest rates will inevitably rise at some point, while high inflation has put a squeeze on household finances. As a result, the Council of Mortgage Lenders predict that there will be 45,000 repossessions in 2012. A longer term settlement, where all parties (the borrower, lender and the government) contribute to a strong safety net is desirable.

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