Letter: Mortgage relief

Sir: As you point out in your leading article 'There is an alternative' (30 July), the Independent has long been calling for the redistribution of mortgage interest tax relief (Miras) in favour of poorer house buyers. We were surprised by your latest suggestion that first-time buyers 'should qualify for complete tax relief on the interest', and wish to point out that such a short-term move might simply serve to perpetuate the cycle of property boom and bust. As a side effect, a rise in house prices now could mean prompt repossession for the 113,860 people currently in mortgage arrears of more than 12 months.

If we want to help buyers, it would make more sense to remove Miras altogether on the majority of purchases, thereby stabilising house prices at a realistic level. The money saved would more than pay for a mortgage benefit scheme, at an estimated cost of pounds 800m, which would operate like income support to help low earners pay their mortgage.

It is also worth noting that Germany has both the most stable economy in Europe and the lowest proportion of home owners. We need to concentrate on finding ways of developing a more balanced housing system that creates a bridge between owning and renting and prioritises the need for more affordable homes.

Yours faithfully,

SHEILA McKECHNIE

Director

Shelter

London, EC1