Both Shelter and the Council of Mortgage Lenders (CML) are calling for the Government not to reduce the rate at which Support for Mortgage Interest (SMI) payments are made. SMI is currently paid to people in receipt of Income Support or Income based Jobseekers Allowance at a rate of 6.08%, but the Budget announced that Government plans to reduce this to a market average rate, determined by the Bank of England. This is currently 3.67%.
Shelter Chief Executive, Campbell Robb, says ISMI has been one of the key schemes holding back the tide of repossessions: “The reality is that most people on ISMI are on higher than average interest rates so there’s a danger it will no longer help those who need it most, which could trigger a surge in repossessions.”
“The only solution is to ensure that ISMI is paid at the rate of interest that people are currently being charged.”
Similarly, in a separate submission to Government, the Council of Mortgage Lenders highlights that household finances remain under pressure and that the cuts to mortgage support raise the risk of arrears rising again after October.
The submission from CML can be found at:
The submission from Shelter can be found at: