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Mortgage help has been widespread over the past few months, as many households have struggled to keep up with payments amid the COVID-19 crisis. However, with support measures drawing to a close this month, one organisation has called upon the government to offer further assistance to borrowers. The Centre for Policy Studies (CPS) has warned many people could be at risk of losing their homes amid ongoing financial issues brought on by the ongoing pandemic.
CPS has produced a report, supported by the Joseph Rowntree Foundation, which has called for more to be done to ensure borrowers receive help.
A particular issue highlighted is the matter of the Support for Mortgage Interest (SMI) scheme, which the groups assert needs urgent reform.
SMI involves homeowners being able to receive help towards interest payments on their mortgage.
It is paid as a loan, with borrowers usually required to pay back with interest when a home is sold, or ownership is transferred.
While there is currently no guarantee of receiving an SMI, it is designed to provide financial assistance to those who need it most.
But the CPS report has said changes are needed to the way the system is run to help homeowners throughout the crisis.
Proposals made within the report suggest the nine-month waiting period for SMI currently in place should be scrapped, as well as the first three months of the support being paid as a grant rather than a loan.
In addition, CPS has said the government should permit Britons to claim SMI while working, as is the approach with other benefits.
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And those who are at risk of losing their home should be informed of the SMI scheme immediately.
James Heywood, head of welfare and opportunities at CPS, commented on the matter.
He said: “The Support for Mortgage Interest Scheme is going to be vital for ensuring people losing their jobs do not also lose their homes before they manage to get back to work.
“The government needs to act now to make the necessary changes so people can move straight onto SMI when their mortgage holiday runs out or when they become unemployed.
“If they don’t, not only will people be forced out of home ownership into the rented sector, it will also cost the state more to support them.”
As mortgage payment holidays come to a close, many people will be looking for alternative arrangements to keep up with their payments.
The Financial Conduct Authority (FCA) has proposed a form of “tailored support” for individuals who may still be struggling after payment holidays conclude at the end of this month.
Guidance from the regulator has said firms must consider the short-term and long-term measures which can be put in place to provide help.
Such arrangements could involve borrowers only paying a reduced amount towards their mortgage for a set period of time, until they are back on their feet.
But borrowers should also be aware that after the October end date, further assistance can be recorded on a person’s credit file.
Darren Baxter, policy and partnerships manager at the Joseph Rowntree Foundation, also spoke about the support needed for many Britons going forward.
He said: “Even before coronavirus hit, a third of homeowners were living in poverty – and as the economic fallout from the pandemic grows, that number is likely to rise.
“With the deadline for applying for a mortgage holiday rapidly approaching, now is the time for the government to take swift action.
“This crisis has shone a spotlight on just how important a safe, secure and stable home is. The government’s focus must be on ensuring people can stay in their homes, whether they be homeowners or renters.”
Homeowners who are looking for further assistance are encouraged to contact their lender as a first port of call.
But for those struggling with debt repayments, debt advice charities may also be able to offer guidance.
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