Labour in repossession warning over help for poorest home-owners

Labour warns Rishi Sunak of a ‘wave of post-pandemic repossessions’ if he does not increase help for struggling low-paid homeowners on top of the three-month mortgage holiday during the coronavirus lockdown

  • Shadow housing secretary John Healey said the holiday needed to be added to
  • He wants  further help via the Support for Mortgage Interest (SMI) scheme 
  • Opposition fears that the lingering effect on jobs will continue for many months

Rishi Sunak was warned today that struggling home-owners could face a ‘wave of post-pandemic repossessions’ if he does not increase state help to get through to coronavirus pandemic.

Labour’s shadow housing secretary John Healey warned that the three-month mortgage holiday announced by the Chancellor last month may not go far enough if the social lockdown continues  into the summer.

The opposition fears that the lingering effect on jobs, with workers being forced to take pay cuts or time off, or being made redundant, will continue for many months to come. 

He today called for ministers to provide further help via the Support for Mortgage Interest (SMI) scheme, which was widely used during the global financial crisis more than a decade ago.

‘Home-owners need support to stay in their homes during this period, so restoring the Support for Mortgage Interest safety net will give vital extra help now as home-owners struggle with mortgage payments,’ Mr Healey said.

The opposition fears that the lingering effect on jobs, with workers being forced to take pay cuts or time off, or being made redundant, will continue for many months to come

‘Home-owners need support to stay in their homes during this period,’ Mr Healey said today

 ‘It will also help ensure those hit during the crisis don’t lose their homes as the pandemic passes and any payments holiday ends.

‘We have to look to the period beyond the pandemic when many hard-pressed home-owners will have lost their jobs or had their incomes slashed, and the current one-off mortgage holiday won’t prevent a wave of post-pandemic repossessions.’ 

Analysis of official figures by Labour suggests a third of home-owning households have no savings to fall back on. 

Mr Healey accused the Tories of making changes to the SMI scheme in 2015, increasing the ‘waiting period’ to 39 weeks from 13 weeks, and changing the payment to an interest-bearing loan.

Mr Sunak last month unveiled unprecedented help for families as he said anyone in ‘difficulty’ because of the virus will be able to get a three month reprieve from payments on their homes. 

Mortgage lenders have agreed with the Treasury that any customers who are in ‘difficulty’ due to coronavirus will be eligible for a three month payment ‘holiday’. 

The Treasury’s coronavirus guidance said eligibility will apply to anyone ‘experiencing issues with their finances as a result of Covid-19’. 

Spain, France and Italy are all introducing temporary moratoriums on mortgage payments for citizens affected by the disease.   

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