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UK Finance Report suggests possible help to government for home-owners

A report by UK Finance, a representative organisation of almost three-hundred UK financial organisations foresees tough years ahead for mortgage owners under duress. Their latest report recommends that the government should strengthen support for home owners struggling to pay their mortgages – a system that is due to become limited by 2022 compared to its existing form, reports the BBC. With repossessions recently at an all-time low, in large part to low interest rates enjoyed by mortgage owners for ten years, the coming years will see increasingly tougher conditions by home owners and may catch many of them off-guard.

The recent interest rate rise by the Bank of England last month signals this change for mortgage customers that will begin a trend in the coming years that home owners should be aware of. The government support for mortgage owners in distress will effectively be limited from 2022, leaving many vulnerable home owners without government mortgage interest support and an increased chance of being evicted and repossessed. The report suggests that the government needs to provide alternatives to this currently expiring system. This trend of reduction of the amount of governmental support for mortgage interest will begin to come into effect in April of next year, where the Support for Mortgage Interest (SMI) scheme for those on certain benefits will be switched to a government loan scheme repayable as well as being subject to interest.

The UK Finance report looks at example cases of dealing with sudden mortgage impacts on home-owners from other countries which may be possible to implement in the UK should the government decide to take action. Other than direct support to owner-occupiers, the suggestions the report is suggesting for ministers are emergency policies to influence mortgage terms as well as encouraging the transfer of residences to the rental section of the housing market, a trend that has already been on the rise for several other reasons in recent years.

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