With publicity for the new tax credits system beginning shortly, the Council of Mortgage Lenders is urging homeowners to check whether they are entitled to claim the credits.
At present, only half of eligible homeowners are claiming credits. An estimated £1bn a year of unclaimed tax credits are accounted for by homeowners.
The CML's reminder is part of the industry's ongoing drive towards making home ownership more sustainable – providing creative ways of helping homeowners to ride out the lows as well as the highs of any economic cycle.
The CML's reminder comes just as new data on the take-up of mortgage payment protection insurance has also become available. The figures show that as of the end of June 2002, there were an estimated 2,518,000 policies in force representing 22.4% of the total number of mortgages outstanding. Over the period since the CML/ABI sustainable home ownership initiative formally began (on July 1 1999), the number of policies in place has increased by nearly 700,000. Nearly 428,000 policies were sold or provided free in the first half of 2002. Over 36% of mortgages advanced in the first half of 2002 had MPPI, either free or paid for.
Peter Williams, CML deputy director-general, says: “Many homeowners simply do not realise they may be eligible for tax credits. Yet half the poor are homeowners and they should not be missing out on this important supplement to their income. Even higher-income households should check their eligibility, as the income cut-off for tax credits can be as high as £66,000.
“Sustainable home ownership is about maximising the whole range of ways that homeowners can supplement their income and avoid becoming financially overstretched. Tax credits have a clear role to play.”