CML responds to the chancellor's pre-Budget report

The CML welcomed today's announcement by the chancellor that help with mortgage payments for working-age borrowers on income support will be maintained at current levels for the next six months. Payments of income support are helping around 100,000 households stay in their homes, and a further 113,000 older home-owners are receiving help with their mortgage through pension credits.

But the CML is disappointed - though not surprised - that the current stamp duty "holiday" will cease at the end of this year, as previously announced. This represents another missed opportunity. More fundamental reform of this tax, which continues to distort the housing market, is still needed. With a low number of housing transactions expected next year, it would have been possible for the Treasury to consider the introduction of revenue-neutral reform that would have removed market distortion.

The CML also notes the government's intention to explore ways of encouraging more sustainable, transparent and standardised markets for UK mortgage-backed securities, and looks forward to seeing more details.

Commenting on the pre-Budget report, the CML's director general Michael Coogan said:

"Lenders are determined that possession is a last resort.  With earlier and better communication between lenders, consumers and debt advisers, arrears are being managed through the recession and possession action minimised, wherever possible. 

"However, a state safety net is also a vital part of the picture, and so we welcome today's announcement of no change to the rate of support for mortgage interest at 6.08%. In a low-interest rate environment, and with so much progress being made by lenders and borrowers together, it is no surprise that the back-stop government schemes have not been widely used. This situation may change if pressures build, as interest rates rise in the future. So we are committed to continuing to work with the government to ensure the best possible outcomes for borrowers going through short-term financial difficulties."