80,000 have mortgage help cut off

Written by Adam Cadle
25/04/2018

More than 80,000 people have had their mortgage help stopped according to the first official figures released since changes were made to the Support for Mortgage Interest (SMI) scheme.

The figures issued on 24 April show only 18,000 claimants out of a caseload of 103,000 have opted to continue to receive SMI under a new loan arrangement that came into force on 6 April. Those who have not taken up the loan arrangement no longer receive help with mortgage payments and risk going into mortgage arrears.

SMI had previously been paid as a free benefit covering the interest on mortgages for those claiming benefits such as pensions credit, income support and universal credit. However, in the Summer 2014 Budget it was announced that any payments made after April 2018 would need to be repaid when the property was sold or transferred into new ownership.

Royal London has repeatedly called on government to delay the changes. Figures issued by the DWP show that successful phone contact had only been made with 72,000 claimants.

Letters had been sent and telephone contact attempted for a further 27,000 claimants while no telephone contact had been attempted in the case of 4,000 claimants.

Commenting on the figures, Royal London personal finance specialist Helen Morrissey said: “We have repeatedly called on government to reconsider its approach and these figures demonstrate the point.

"The changes to SMI came in from 6 April and yet these figures show the government has yet to speak to some 30,000 claimants about the changes and only 18,000 have said they will take up the loan option. As it stands well over 80,000 people have now lost their mortgage support and we have no idea what strategies they have in place to meet these payments. The likelihood is that we will see people start to default on their mortgage payments. The government must put a brake on these changes to ensure these people are engaged with and helped to make an informed decision. Otherwise these people face disastrous consequences.”

    Share Story:

Specialist FTB and BTL markets
Adam Cadle talks to Vida Homeloans director of sales - mortgages Louisa Sedgwick about the specialist first time buyer and buy to let markets

Newsletter

Subscribe to our newsletter to receive breaking news by email.




MoneyAge welcome
MoneyAge Editor Adam Cadle discusses the brand and what is on offer

World Markets (15 minute+ time delay)