ABSTRACT
This chapter examines the role that housing benefit plays in supporting demand in both the rented and the owner-occupied sectors, and looks at housing benefit under Labour. It analyses the effects of mortgage interest relief on owner-occupation and on the wider economy during the late twentieth century, discusses the reform of mortgage interest relief and its eventual abolition in 2000. Mortgage tax relief enabled commuters increasingly to bid up the price of country cottages within travelling distance from work, pricing out of the market rural households who either have to seek council housing, continue to live in tied accommodation or migrate into the towns and cities to be faced possibly with unemployment and homelessness. With the phasing out and eventual abolition of mortgage interest relief, housing benefit became the dominant, though a highly problematic, means of subsidising households in relation to their housing costs.
