Ministers announced the decision to cut Support for Mortgage Interest payments in the June emergency budget as a means to cutting public spending – but have not published a comprehensive impact assessment of the changes and the way they will affect those with disabilities.
The Federation says that the decision will have a massive impact on disabled home owners across the country who receive the Support for Mortgage Interest payments. All those affected will be at risk of falling into debt, as they struggle to keep up with their mortgage payments, falling into arrears, and eventually losing their home.
Around 59,000 people with disabilities who use Support for Mortgage Interest payments are those with a range of health issues, who use it to help them pay mortgages on homes they have bought through outright sale.
However, a further 5,000 people with profound physical disabilities and mental health problems have used the state support to secure niche mortgages to pay for shared ownership homes – provided by housing associations – through which purchasers buy between 25-75% of the property and pay rent on the rest.
Most of these people are first time buyers with a total household income of less than £60,000. Others are existing home owners who can demonstrate that their existing properties are no longer suitable for their needs. Typically, they may have long-term support needs, be located with a full-time carer, or have a requirement to live close to a medical facility.
It is believed that for those with long-term disabilities, who have bought a shared ownership property, the cut may also result in building societies who lend on these government-backed programmes withdrawing from the market as the cost of providing mortgages will exceed the returns they can expect.
Federation chief executive David Orr said: ‘The Government’s decision to cut Support for Mortgage Interest payments will mean that thousands of people with disabilities will quickly find that their homes are at risk.
‘The decision to cut Support for Mortgage Interest payments is particularly harsh way to try to bring public spending down as it will hit thousands of vulnerable people with disabilities, who wouldn’t be able to own a home outright or purchase through shared ownership in any other way.’
He added: ‘The Government says that it will try to protect the most vulnerable as it makes spending cuts but this policy will hit thousands of people with disabilities, cutting off many from the prospect of owning their own home.
‘The fact that ministers have not carried out a comprehensive impact assessment into such a major decision is very disquieting.’
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