Local MP wants more support for low-income homeowners

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10 Nov 2020
Margaret Greenwood MP has called for better support for low-income homeowners during a debate in Parliament.

The Wirral West MP was speaking in response to a statement by the government about support for disadvantaged families through the winter and beyond. She drew attention to the fact that the government’s mortgage holiday scheme – designed to help those financially affected by the Covid-19 pandemic – does not cover mortgage interest which will still accrue during any payment holiday, thus increasing the overall balance of the mortgage in the long term. She also pointed out that people have to wait a long time before they can apply for support with mortgage interest. 

Until April 2018, homeowners on low incomes could get Support for Mortgage Interest (SMI) which was a means-tested benefit to pay the interest on their mortgages. The government scrapped this and replaced it with a loan which has to be paid back, despite warnings from Labour at the time that the move would put low-income households at risk of real hardship. 

In her intervention during the statement by the government’s DWP Secretary Thérèse Coffey, Margaret Greenwood called on the government to abolish the nine-month waiting period for the loan. She also asked what consideration the government has given to reinstating SMI as a payment rather than a loan.  

Speaking after the debate, Margaret Greenwood MP said: 

“I was pleased to be able to raise this important issue in Parliament.  

“The government’s mortgage payment holiday scheme does not take into account the fact that homeowners will continue to be accruing interest on their mortgage payments as they defer them. Interest will therefore still accrue during any payment holiday.  

"The scheme also does not take into account the fact that once someone has had a payment holiday of six months, they cannot secure another one. For many people, this winter is going to be incredibly difficult as a result. 

“The government scrapped the Support for Mortgage Interest payment in 2018 and replaced it with a loan that people have to pay back as part of the Conservative's austerity programme of the last ten years.  

"People can apply for Support for Mortgage Interest from the date they start getting Pension Credit, after they have had nine consecutive Universal Credit payments or after they have claimed any other qualifying benefit for 39 consecutive weeks. Clearly, this is a very long time to wait." 

“Many people will be worrying about how they will keep a roof over their heads this winter. 

“It is vital that the government steps up and does more to support homeowners through the Covid-19 pandemic and make sure that they can stay in their homes.”

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