CML news & views

Labour MP Sally Keeble is backing our arguments for reform of income support for mortgage interest (ISMI) and has been pressing the chancellor to introduce a fairer system of state support for home-owners in financial difficulty.

At a Treasury select committee hearing earlier this month, Ms Keeble attacked the anomaly under which home-owners have to wait nine months before qualifying for state help, while tenants who cannot pay their rent usually get help from the date they make a claim.

We have consistently argued that the current system of government support is clearly biased in favour of tenants and against home-owners. But despite the Labour government’s stated support for home-ownership, ministers have so far refused to introduce reforms.

At the Treasury select committee hearing, Ms Keeble, the MP for Northampton North, challenged the logic of the government’s approach.

Ms Keeble said: “If you get…two households living next door to each other, one paying rent for their council property and one having bought their council home and therefore paying mortgage payments, and they are both in similar financial circumstances and both get into financial difficulties…one lot gets housing benefit and the other lot just gets mortgage arrears and no help. How do you justify treating them differently purely on account of their housing tenure?”

She continued: “Low-income home-ownership has got its own particular challenges and in the coming months, with financial pressures increasing, it is quite likely that families will have real problems paying their mortgage bills

“How do you justify saying this family is poor and we are going to help them with housing and this family is also poor but we are not going to help them with housing because it is mortgage payments and not rent? If you are looking at child poverty, the impact on the children is the same: not so much money for food.”

Despite her persistence, however, Ms Keeble was unable to sway the chancellor.

He argued that the system had always been different for those who owned their home and that this was not “a problem we can immediately sort.” He continued: “What I cannot promise you is that we can change the housing benefit system in the way that I think you are suggesting.”