Universal Credit and Support for Mortgage Interest loan

I’ve received from Universal Credit a form that I am supposed to complete and send to my mortgage lender so that I can get a Support for Mortgage Interest loan. SMI used to be a benefit, but the government recently changed it into a loan, repayable when the property is sold. The change has been widely condemned.

What is bizarre, though, is that I should never have received this form, for a number of reasons. The main one is that I don’t have a mortgage.

  • I don’t have a mortgage
  • I didn’t ask for a Support for Mortgage Interest loan
    • If this isn’t a stock letter, it shouldn’t be sent to people who haven’t asked for it
    • If it is a stock letter, it needs to have a tick-box for ‘I don’t have a mortgage’ or ‘I don’t want to claim SMI’
  • A person on Universal Credit who has any earnings, as I do, cannot receive SMI

The SMI form tells me that, before getting the SMI form, I “should have had a letter, booklet and conversation with Serco, who are acting on our behalf”. This would have given me the information required by law that I must receive before signing any SMI loan agreement. I haven’t received any such information.

Proponents of the loan have said that it is not the role of the taxpayer to support other people’s mortgages. Under such an argument, there should be no Right-to-Buy, and housing benefit should cover only the interest rates paid by private landlords on any mortgage they hold on their rental properties. Of course, this would lock anyone in need of housing benefit out of the private rental market at all, and with social homes massively oversubscribed the result would be millions of people homeless. We wouldn’t lose any more social homes, but that would be massively outweighed by the vast increase in need.

If the government doesn’t want to help purchase homes for anyone, whether social homes for social tenants, private homes for benefit recipients or private homes for private landlords, then it must fully take on board the only alternative: social rent. It must build and make available enough social homes of the right sizes, fully accessible or modifiable at minimal cost, and provide more than enough decent infrastructure to meet the needs of the population.

Until such an event is realised, it is grossly inappropriate to single out owner occupiers as undeserving of support for homeownership, when social tenants and private landlords currently are supported, and when housing costs are so expensive and so unavoidable.

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