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Cutbacks in mortgage benefits could pose risk to vulnerable homeowners

September 6, 2010 by Reno  
Filed under News, News-Mortgages

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Industry groups and campaigners are expressing concern over the effect that mortgage benefit cutbacks by the government may have on vulnerable homeowners. There are concerns that some homeowners that are in a vulnerable position, such as disabled homeowners, could be at heightened risk of repossession because of the cutbacks put into place by the coalition government.

In its recent emergency budget the coalition government revealed the details of a range of cutbacks designed to cut public spending and bring the public deficit under control. This included a range of cutbacks to benefits and to various programmes that had been put into place such as mortgage schemes.

The National Housing Federation has launched a scathing attack, stating that there are now around 64,000 homeowners with disabilities that receive assistance through the Support for Mortgage Interest scheme, known as the SMI. However, many will experience difficulties if this assistance is reduced or cut.

According to reports the SMI is to be recalculated for thousands of people with disabilities, and officials believe that around five thousand people with serious mental and physical disabilities could end up financially worse off under the system, and could face difficulties in making repayments, which could mean an increased risk of repossession.

An official from the National Housing Federation said: “This policy will hit thousands of people with disabilities, cutting off many from the prospect of owning their own home. The fact that ministers have not carried out a comprehensive impact assessment into such a major decision is very disquieting.”

The Sheffield Centre for Independent Living added: “There’s an inconsistent response from different local authorities because there are no national guidelines on how payments are made. Now we have to help a lot of people who are finding it harder to get these grants as councils review spending.”

Tags: Independent living, mortgage, Government spending, councils review spending, homeowners, cutbacks, National Housing Federation

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