Government urged to provide ‘safety net’ for struggling families as Liberal Democrats warn people to ‘hand over their house keys’ due to rising cost of home household debt. The party said extra support was particularly needed for first-time buyers who have “saved and saved to move up the housing ladder”.
He said last week’s forecast from the Office for Budget Responsibility showed the costs of servicing household debt – the interest people pay on their loans, including mortgages and credit cards – are expected to rise. from £55bn in 2021/22 to £83bn in 2023/24. This equates to an increase in interest payments of £1,000 per household over the two years, based on 27.8 million households in the UK, the Lib Dems said.
Leader Sir Ed Davey has slammed Chancellor Rishi Sunak for pushing ahead with a planned tax hike when ‘people’s homes are at stake’.
“Many first-time homebuyers who have skimped and saved to climb the housing ladder will urgently need a safety net to get through what looks like months of rising mortgage costs,” a- he declared. “We need an emergency mortgage support fund to support struggling families, otherwise we will see people forced to default and hand over their house keys.”
Homeowners who receive certain benefits can currently get loans to help cover mortgage interest payments through the government’s Mortgage Interest Support (SMI) scheme.
People can access these loans either from the date they start receiving the pension credit; after applying for Income Support, Income-Based Jobseeker’s Allowance or Income-Based Employment and Support Allowance for 39 consecutive weeks; or after receiving Universal Credit for nine consecutive months.
But the Lib Dems believe the 39-week waiting period for some ‘may be too long for families in a cost of living crisis’. The party’s proposed emergency mortgage support fund would offer payments instead of loans. Wait times would also be reduced from 39 to 13 weeks, the Lib Dems said.
A government spokesman said: ‘We understand that people are struggling with the rising cost of living – we cannot protect everyone from these global challenges, but we are taking action worth more than £22bn this financial year to help. We are raising National Insurance thresholds and lowering the Universal Credit Tipping Rate to help people keep more of what they earn, raising the National Living Wage and providing a £9billion package support for energy bills – and we continue to provide loans for low-income people to help them pay their mortgage interest.
“We are also investing over £12billion in affordable housing to help young people and families get onto the homeownership ladder and our new First Homes scheme will provide homes at a discount of at least 30% for the first buyers.
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