UK WIDE : Mortgage benefit cuts

[Matt Hill]

Some carers featured in this article
http://www.guardian.co.uk/money/2010/de ... lose-homes

Government changes to mortgage benefits for the unemployed will bring misery in 2011 for thousands of people struggling to keep a roof over their heads, a leading homeless charity has warned.

The rate at which Support for Mortgage Interest, a benefit paid to unemployed people, is calculated was cut by 40% from 6.08% to 3.63% at the beginning of October. The charity Shelter is already being asked for advice by homeowners threatened with repossession, as thousands of people face the loss of their homes early next year.

Karen has multiple sclerosis. Her husband recently gave up work because Karen can no longer cope with looking after their two children, one who has muscular dystrophy. She receives disability living allowance. Their mortgage lender says that, because of the SMI cut, their monthly mortgage payments will jump from £180 to £400.

The family has been trying to prepare financially for the expected cuts. "We've spent the past 12 months trying to pay off our £2,000 overdraft and we've got it down to £400. We'd be facing financial ruin otherwise. But the money we put aside to get that overdraft down will now have to go towards the mortgage."

This leaves no financial flexibility] does anything else we're going to be sunk.

"We were professional working people and, because of our disabilities, our entire life has changed. My husband has had to give up work to be our son's carer because I couldn't cope, so we are totally at the mercy of the benefits system."

■ Jean is 44 and lives with her husband and three children aged 13, nine and five in the London borough of South Croydon. Her husband was a builder but had to stop work following a medical problem. Jean receives income support, disability premium and child tax credits. The household is £3,000 in arrears on their mortgage, but had reached an agreement with their lender and are paying off £20 a month on the debt.

Jean was receiving SMI to help pay her mortgage, but the changes mean she now has to find an extra £139 a month. This has pushed the family to the breadline.

"We can't earn because of my husband's disability so there's no extra money to be made. We're using money for food and the electric to pay the mortgage. I'd rather not eat than not pay the mortgage because we can't lose our home. Things are so bad that we're going begging to my mum and dad to help us out and they're living on a pension."

[Lazydaisy]

For the first eleven years of caring, I also worked fulltime,and we had a mortgage. While I was on maternity leave with Katie,(1990), interest rates shot up,and I ended up having to do some private work as well as my usual job. We were only able to do this, because my husband was still able to drive, and he usually took the children to my mothers,where they would share the care.
When I gave up work to care fulltime,most of our mortgage interest was paid,until three years ago,as the mortgage was then finished. We now save the Government money,as rent would be far higher,and last longer. If we should sell the house, and rent somewhere instead, then again they save, as we would not get income support.(We always paid the capital on the mortgage, it was the interest that was paid.)
The Government is very shortsighted if they cannot support people with their mortgages.(very often cheaper than rented accommodation).
Even without a mortgage, we are struggling from day to day in a financial nightmare, so it must be absolute Hell for those who have to find extra money for their home too.

[pixie]

I have had to find an extra £100 a month since this came into effect in October and that has to come from the money for food, heating etc.

Not sure how we will manage.