CSR: ISMI changes extended for a year
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Chancellor George Osborne has announced in his Comprehensive Spending Review today that the temporary changes to Income Support for Mortgage Interest which were due to expire in January 2011 will be extended for another year.
In the CSR report, it says: “We are helping homeowners facing difficulties by extending for a further year the temporary change to the Support for Mortgage Interest scheme, to reduce the waiting period for new working age claimants to 13 weeks and increase the limit on eligible mortgage capital to £200,000, both of which were due to expire in January 2011.”
Previously ISMI only contributed towards the interest on the first £100,000 of a mortgage and most applicants had to wait 39 weeks before payments commenced.
The temporary changes were introduced in January 2009.
The Council of Mortgage Lenders has welcomed the extension of the temporary concession on support for mortgage interest.
The CML says it trusts that the government will review the housing market conditions before January 2012 and decide on whether further continuation would be appropriate.
The trade body says according to the government, this will cost £90m over the next two years - a modest sum in the overall scheme of public expenditure, but a reprieve that will come as a relief to those households which, through no fault of their own, lose their income and their ability to meet their mortgage obligations.
It says CML members who lend extensively to the affordable housing sector look forward to engaging in developing different ways of doing things to support the expansion of private finance.
However, it says the right conditions need to be in place for this to happen in the way the government envisages and this includes strong regulation as well as targeted capital investment and support for individuals through the welfare benefit system.
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