UK homeowners’ financial safety nets have been scaled back over the last decade, according to UK Finance.
A UK Finance report says there are two main ways this safety net has been reduced.
The first is Government changes to Support for Mortgage Interest.
The Government will replace the current grant system for this benefit and replace it with a loan.
UK Finance says this is a “less generous” form of support.
The second reduction comes from limitations to loans to homeowners in financial trouble.
From 2022 these loans will be mainly limited to those not working.
UK Finance says: “For people with a job, even in part-time or low-paid employment, the system will rely largely on what individual homeowners can do for themselves, supported by lenders operating within the legal and regulatory safeguards.”
The report says that, while many nations do not provide support specifically for mortgage borrowers, often this is due to pre-existing generous income support measures.
The report adds: “In countries where mortgage markets have suffered badly because of the financial crisis and subsequent recession, governments have often responded with emergency policies to reduce evictions, modify mortgage terms, transfer homes into the rental sector and provide other support.”
UK Finance head of mortgage policy June Deasy says: “Lenders have responsibilities to help manage the consequences of diminishing support for home-owners in difficulty.
“They will always work with borrowers to help them manage a period of temporary difficulty, and avoid possession wherever possible.”
The findings come in a UK Finance report called Challenges for our Home Ownership Safety Net: UK and International Perspectives.
The authors include Intermediary Mortgage Lenders’ Association executive director Peter Williams.