A new report has revealed the extent to which help for home owners facing financial difficulty has been scaled back over the past decade.

Following the 2008 financial crisis the Government strengthened the safety net for mortgage borrowers, but most of this support has now been withdrawn.

Key findings of the report, Challenges for our Home Ownership Safety Net, UK and International Perspectives, commissioned by trade body UK Finance, include:

• Support will be further reduced next April when the Government is due to stop paying Support for Mortgage Interest as a grant and replace it with a new and less generous form of support – Loans for Mortgage Interest. This will be repayable when the house is sold.
• By 2022 help for home owners in financial difficulty will be limited mainly to loans to those who do not work. For people with a job, even in part-time or low-paid employment, the system will rely largely on what individual home owners can do for themselves, supported by lenders operating within the legal and regulatory safeguards.

The report is the work of three of the UK’s leading housing academics. Their analysis explores how the safety net for borrowers in financial difficulty has been eroded in the UK and compares it with other countries.

It reveals that, while many nations do not provide support specifically for mortgage borrowers, in some cases this is because they already have more generous income support measures in place.

In countries where mortgage markets have suffered badly because of the financial crisis and subsequent recession, governments have often responded with emergency policies to reduce evictions, modify mortgage terms, transfer homes into the rental sector and provide other support.

There has also been regulation to reinforce economic stability and limit risks posed by financial institutions.

Commenting on the research, UK Finance’s head of mortgage policy June Deasy said: “As this research highlights, there have been significant changes in the benefit system affecting home owners.

“It is important that they are aware of these changes and how they may be affected.”