Pre-budget report

Alistair Darling announced details of the pre-budget report yesterday. Besides increasing pension credit, income support and jobseeker’s allowance, a number of measures were specified to help homeowners. The recently announced £200 million mortgage rescue scheme where the government buys a home and then rents it back to the former owners, which will help up to 6,000 vulnerable households and is available from January, is to be extended to include those with second charge mortgages also. He also announced an extension of the income support for mortgage interest scheme (ISMI) which helps homeowners pay interest payments on their mortgages if they become unemployed, which would be paid on the interest to loans of up to £200,000 now. A ‘lender panel’ is to be created that would monitor how mortgage companies lend to both individuals and businesses. The chancellor also said that mortgage lenders need to develop ‘creative and sustainable’ solutions to help borrowers stay in their homes such as mortgage holidays or reduced payments, and has told lenders to wait three months before taking action against borrowers unable to make their monthly repayments. Free debt advice to the value of £15 million will be provided, and £775 million of funding for a promised boost social housing will be fast-tracked from the 2010/11 spending review. By 2010 empty properties with a ratable value below £15,000 will be exempt from business rates, which the chancellor estimates could exempt as much as 70 per cent of empty buildings.