The Council of Mortgage Lenders’ (CML) members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.1 million mortgages in the UK, with loans worth over £1.3 trillion.
Providing a CML commentary on the Chancellor’s July 2015 Budget announcements, CML Director General, Paul Smee, said:
“The most significant Budget announcement for the mortgage market is the fundamental change to Support for Mortgage Interest, which will change from a benefit to a loan in 2018. This is a radical change and we will need time to consider it and work through the practicalities and logistics. The systems and risk challenges for our members arising from such a change are potentially huge.
Our members already go to significant lengths to support customers through temporary periods of difficulty, and will continue to do so. We will do our utmost, whatever the landscape of State provision, to keep in their homes customers whose problems are temporary and whose circumstances will allow them to get back on track over a reasonable timeframe. But this is a change that could have wide implications.
Other notable announcements for the mortgage lending industry include the four-year phased reduction of higher rate tax relief on buy-to-let mortgage interest payments. The phasing is important. We will need to understand whether this will have a behavioural impact on higher-rate buy-to-let landlords, but a four-year timetable does at least reduce the risk of sudden market shocks".