Tory mortgage changes threaten more debt

Liverpool housesThis week, the Tories once again showed they are not supporting homeowners. From April 6, with too little warning and next to no publicity, the government changed the rules for those out of work and needing support with their mortgage interest payments.

After 70 years, the benefit has been scrapped. Now people have to apply for a loan with the risk that claimants who don’t take it up could end up in arrears on their mortgage and incur real hardship

Like the change to state pension age for women born in the 1950s, those affected have not been given adequate time to prepare.

The change hits 90,000 people across the country, 16,000 of them here in the North West.

Previously, homeowners have been able to get support if they find themselves in difficulty with their mortgage payments and are claiming one of the qualifying benefits, because they have been made redundant, are a pensioner on very low income or have become ill or disabled. In most cases there was a 39 week qualifying period and the money was paid direct to the mortgage company.

This benefit helped to stop people’s homes from being repossessed by paying the interest on the mortgage, and helped prevent homelessness.

The new government loan scheme they are introducing is administered by Serco and has to be repaid when the claimant re-enters work. Figures uncovered by Labour showed that just days before the changes took place, 5,000 people had not received an initial letter from the DWP telling them the change was about to take place. Over a third of claimants had not been contacted by telephone to explain the change.

The charity Age UK warns that claimants may try to manage by cutting back on essentials like heating instead of taking out the loan.

Putting home owners at risk of repossession will cause real uncertainty for people on very low incomes, many of whom are pensioners. I urge the government to halt the introduction of a loan and think again.