Prime Minister pledges to turn ‘benefits to bricks’

The Prime Minister has pledged (9 June) to change welfare rules so that the 1.5 million people who are in work but also on housing benefit will be given the choice to use their benefit towards a mortgage, rather than automatically going directly to private landlords and housing associations.

The welfare system exists as a safety net to help the poorest people, but the government also wants to incentivise people to find work and take steps to better their lives.

So, if a hard-working family saves a deposit to buy a home, the government will back them with the same housing support that they would have used on their rent, to pay towards their mortgage instead.

The government will also change the rules to incentivise those who are claiming Universal Credit to save for a deposit. Currently, welfare rules taper the amount of Universal Credit received when the claimant’s savings exceed £6,000, and it stops entirely when savings exceed £16,000.

The Government will also commit to exempting Lifetime ISA savings from these rules – meaning hard-working people can save a little each month specifically for a deposit without impacting their Universal Credit payments, until they have enough for a deposit for a first home.

To support existing homeowners, the government will also improve support for mortgage interest (SMI) – a loan which helps claimants pay interest on their mortgages and stay in their homes if they lose their jobs.

Currently, this only kicks in after nine months of unemployment so the government will bring this forward to three months, to incentivise people to find work again and bring government into line with what lenders offer in these circumstances.


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