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Mortgage borrowers 'should be helped to avoid repossession'

By Daniel Culpan

8 August2021

The Council of Mortgage Lenders (CML) has urged the Government to give mortgage borrowers who are struggling to keep up with their payments more help to avoid repossession - by upholding some temporary benefit arrangements for at least another 12 months.

The CML said that home repossessions have been held down much more than expected due to the Support for Mortgage Interest (SMI) scheme, which is designed to help people struggling with their mortgage payments.

The Council, which represents banks, building societies and other lenders, said that a more widespread availability of SMI has led to a fall in home repossessions over the last two years - with numbers dropping to 37,000 in 2011.

Despite this, repossessions are predicted to increase to 45,000 this year, as a result of the unstable economy and a tough jobs market - both of which have come at a time when household budgets are being squeezed more tightly than ever.

Some temporary changes to SMI - including the introduction of a reduced three-month qualifying period and an increase in the size of mortgages covered by the scheme (from 100,000 to 200,000) - are currently set to be scaled back next year.

The CML has said that these measures have been 'critical' in lowering repossessions, and without them, struggling mortgage borrowers could face even more problems.

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Tags: mortgage, repossession, lending, Council of Mortgage Lenders, budgeting, borrowing

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