George Osborne announced a major shift in the government’s attitude to mortgage interest benefit in today’s Budget.
Currently, those who receive benefits to help to pay their mortgage interest are able to do so indefinitely with no need to pay anything back.
However, the Treasury is to convert the Support for Mortgage Interest scheme into a loan.
CML director general Paul Smee said: “The most significant Budget announcement for the mortgage market is the fundamental change to Support for Mortgage Interest, which will change from a benefit to a loan in 2018.
“This is a radical change and we will need time to consider it and work through the practicalities and logistics. The systems and risk challenges for our members arising from such a change are potentially huge.
“Our members already go to significant lengths to support customers through temporary periods of difficulty, and will continue to do so. We will do our utmost, whatever the landscape of State provision, to keep in their homes customers whose problems are temporary and whose circumstances will allow them to get back on track over a reasonable timeframe. But this is a change that could have wide implications.”
