Established 2005 Registered Charity No. 1110656

Scottish Charity Register No. SC043760

current issue

December 2024 – January 2025 : Solidarity READ ONLINE

RECENT TWEETS

Mortgage Rescue Scheme flounders

September 26 2009
The £285m scheme rescues only one household A government scheme to save families from having their homes repossessed has helped just one household since its launch in January. The £285 million Mortgage Rescue Scheme was created to give homeowners the chance to sell their properties to a social landlord such as a housing association, and then to rent it back, avoiding repossession. But despite an estimated 15,000 families losing their homes since the start of the year, just one out of 452 families who applied has been approved for help. The scheme was targeted at people earning less than £60,000 a year who would be entitled to be re-housed under homelessness legislation. Liberal Democrat housing spokesman Sarah Teather said: "This is an appalling failure by a government that is more interested in headline-grabbing than in helping families through the economic crisis." The flagship scheme was launched to help buffer the effects of the economic downturn, with the Council of Mortgage Lenders forecasting a total of 75,000 repossessions this year - close to the peak of the 1991 recession. In exchange for lenders agreeing to defer a portion of homeowners' interest payments, the government pledged to guarantee up to 80 per cent of the money owed to the lender. Some critics argue that its selection criteria are too strict, as the scheme is open only to owner occupiers, not buy-to-let landlords, and people must have bought their home using a mortgage before 1 December last year. Furthermore, homeowners are not eligible for assistance unless they have been making regular payments in agreement with their lender for at least five months. They must also be able to afford to continue to pay at least 30 per cent of the interest on their loan each month. And they can also only take part in the scheme, which covers mortgages up to £400,000, if all other options have been exhausted, and if they are not eligible for income support for mortgage interest and have less than £16,000 in savings. But a DCLG spokesman said: "The Mortgage Rescue Scheme has made a successful start and is one part of a comprehensive package of measures to help households at risk of repossession. It is important to remember that mortgage rescue is just one of the levels of protection we have put in place." The government originally unveiled the Mortgage Rescue Scheme last September at the start of the banking crisis in response to fears of soaring numbers of people losing their homes, with ministers claiming the move would aid 6,000 people over two years. It was part of a package of measures that the government claimed would provide "real help." Originally a £200 million scheme, it was given an £85million boost in April's budget. Tory spokesman Grant Shapps added: "These shocking figures show what a sham the Government's Mortgage Rescue Scheme has been. Thousands of families looked to Gordon Brown for help to survive his recession and he's looked the other way. He got us into this mess, and he needs to help families through it."
< Polish shelter fire kills 23 Homeless on display at Chelsea >
December 2024 – January 2025 : Solidarity

CONTENTS

BACK ISSUES
BACK TO PAGE TOP