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IMLA brands govt cladding funds ‘completely unacceptable’ and calls for SMI rethink

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  • 25/02/2021
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IMLA brands govt cladding funds ‘completely unacceptable’ and calls for SMI rethink
The Intermediary Mortgage Lenders Association (IMLA) is asking the government to commit more money to fix homes with unsafe cladding and review the Support for Mortgage Interest scheme in the Budget on Wednesday.

 

Kate Davies, executive director of IMLA, said it was “completely unacceptable” to expect leaseholders to cover the costs through government-backed loans.  

IMLA also estimated the cost to remove dangerous materials from high rise homes was £15bn, three times more than the £5bn the government has committed so far. 

More support for borrowers financially affected by the pandemic was also suggested by IMLA, in the form of a rethinking of the Support for Mortgage Interest (SMI) rules. 

It said tying the loan up with Universal Credit payments meant borrowers who do not have this benefit would be prevented from accessing SMI which may still be necessary if they lose all or part of their income. 

IMLA said extending SMI to more borrowers would provide them with a lifeline and stop people from possibly losing their homes. 

 

Stamp duty and climate change 

The association proposed a flexible winding down of the stamp duty holiday rather than postponing the deadline to June, as it said that would avoid pushing the possibility of cliff edge to a later date. 

Davies added: “The current stamp duty holiday deadline of 31 March has created unprecedented levels of activity and put a huge strain on lenders and conveyancers as they race to complete transactions in time.  

“We have asked for some flexibility to avoid penalising those who miss the deadline, very possibly through no fault of their own.” 

IMLA also suggested a more joined up approach to addressing climate change within the housing market following a Business, Energy and Industrial Strategy (BEIS) report which suggested lenders declare the average EPC rating of their mortgage book. 

Davies said: “Climate change is a huge issue and lenders support the government’s ambition to build back better and focus on green initiatives.  

The Green Homes Grant was well intentioned, as was a recent BEIS consultation on improving home energy efficiency, but we think this challenge requires a much wider and more ambitious cross-government strategy, rather than a piecemeal departmental approach.” 

“Protecting the UK’s housing market should be high up on the chancellor’s priority list for this Budget,” she added. 

 

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