PMQs: Conservatives slash mortgage help by £700m

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Liberal Democrat Leader Ed Davey has challenged Rishi Sunak today at PMQs to support struggling homeowners with a Mortgage Protection Fund, raising the case of a constituent whose mortgage payments have rocketed by £500 a month.

It comes as new figures uncovered by the Liberal Democrats reveal Government support for struggling homeowners has been slashed from almost £700m a decade ago to just £200,000 last year. Ed Davey described the lack of support as an “insult to homeowners on the brink.”

The House of Commons Library research shows a massive drop in funding for the Support for Mortgage Interest scheme, which helps homeowners on certain benefits who are struggling to afford their mortgage. 

At its peak during the last financial crisis in 2009/10, around 235,000 people were receiving payments at a cost of £691m in today’s prices. However, in 2018 the Conservative government abolished the SMI benefit payment and replaced it with a loan, which must be repaid with interest when the claimant sells their home. Since then the support provided through the scheme has been dramatically reduced, with just 13,000 people receiving loans at a cost of just £0.2m in 2020/21. 

Liberal Democrat Leader Ed Davey said:

“Rishi Sunak’s response showed he’s completely out of touch with the challenges facing millions of people around the country. The lack of support for mortgage borrowers in the Autumn Statement was an insult to homeowners on the brink.

“Mortgage rates have gone through the roof because the Conservatives crashed our economy. But instead of helping those at risk of losing their homes, the government has slashed support to the bone.

“Last week’s budget left struggling homeowners out in the cold, while piling on the misery with years of painful stealth taxes.

“It’s time Rishi Sunak listened and brought in a Mortgage Protection Fund, paid for by reversing the Conservatives’ unfair and unnecessary tax cuts for the big banks.

“No one should lose their homes simply as a result of the Conservatives’ reckless mismanagement of our economy.”

ENDS

Notes to Editor

Full figures from the House of Commons Library on expenditure on the Support for Mortgage Interest scheme are available below. Figures on the number of recipients of SMI are available here.