Owner-occupier housing costs

Changes to Support for Mortgage Interest (SMI) provision for owner-occupiers are being made as UC is introduced: 



• all loans secured on the property are allowable, up to the capital limit;



• there is a “zero-earnings” rule for owner-occupier housing costs — if the claimant and/or their partner has any earned income, payment for owner-occupier housing costs stops;



• there are no “linking” rules — (where claimants return to their previous rate of benefits if they return to work and then stop again); 



• the waiting period increased from 13 weeks to 39 weeks (nine months) from 1 April 2016 and there is a capital loan limit of £200,000;



• there are no deductions for non-dependants in owner-occupier housing costs; and



• there is provision for alternative finance arrangements (for example, Islamic mortgages). 



The changes to benefits to cover housing costs are set out in detail in Chapter 7.