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Just one home rescued by £285m mortgage aid scheme
Jonathan Prynn01.05.09
A £285 million government scheme to protect homeowners facing repossession has helped just one family so far, it emerged today.
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.
It was part of a package of measures that the Government claimed would help 6,000 families over the next two years. The £200million scheme was this month given an extra £85million by Alistair Darling in the Budget.
But tight criteria means that only a small number of homeowners qualify for the support.
The Communities department said the scheme had been "operational across the country" since January and a spokesman said it had made a "successful start".
Figures published by the department today show that just one homeowner, in the east of England, has qualified for the assistance so far.
A government spokesman said that councils were currently looking at applications from more than 450 other families across Britain.
Shadow housing spokesman Grant Shapps said: "Thousands of families have looked to Gordon Brown for help to survive this recession and he's looked the other way. He got us into this mess and he needs to help ordinary families through it."
Under the measures, homeowners struggling with repayments would be allowed to sell a share - or all - of their property to a social landlord and rent it back. This should allow them to stay in their home without facing the trauma of being repossessed by their lender. However, the scheme has been criticised because of its qualifying criteria, which means that only a small number of homeowners will be entitled to benefit.
Homeowners will not be eligible for the assistance scheme unless they had 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.
They can also only take part in the scheme, which covers mortgages up to £400,000, if all other options have been exhausted, if they are not eligible for income support for mortgage interest and have less than £16,000 in savings.
The scheme is only open to owner-occupiers, not buy-to-let landlords, and people must have bought their home using a mortgage before 1 December last year.
In exchange for lenders agreeing to defer a portion of homeowners' interest payments, the Government will guarantee up to 80 per cent of the money owed to the lender.
The Council of Mortgage Lenders forecasts that there will be up to 75,000 repossessions this year, equalling the high point of the early Nineties recession.
Reader views (11)
Gordon Brown and Alistair Darling - you're both useless! You're a joke. You must be cursed. Everything you touch turns to dust! Please DON'T touch, do or say anything!
- Max, Twickenham
It was originally announced amidst all the fanfare and spin eight months ago that GBP285,000,000 would be made available to assist individuals who were experiencing financial difficulties via their mortgage payments.
Like everything else to do with this Labour Government, it now transpires that just ONE applicant managed to jump through the mind-boggling hoops to qualify for this help.
HOW MUCH DID IT COST THE UK TAXPAYER FOR STAFF WAGES, OFFICES AND MOST IMPORTANT OF ALL, HOW MUCH WAS CLAIMED BY WAY OF "EXPENSES" BY THOSE OFFICIALS IN CHARGE OF THIS FARCE?
This is yet another fine example of Labour waffle and devious officials justifying their autocratic powers.
The Labour Party stinks.
Bathplugs stink.
Porno movies at taxpayer's expense stinks.
Gormless Brown is a walking disaster area gone mad.
- Reuben Camara, Morecambe UK
It appears that the increasingly isolated Gordon, and his tin pot cohorts, is now in danger of creating a desperate nation of dispossessed people. Add this to all the rest of Labour’s mind-boggling calamities and you get a fair idea of the lack of insight and professional ability behind this Laurel and Hardy style regime. They are a spent force but we have to safeguard that they do not take the populace into the worsening morass with them any further.
- Pat Regan, southport
Does anyone actually know, where all this money has gone?
- Carl Barron, Christchurch, Dorset
Bet they rescued an MP who was worried he/she was going to lose theri second home after yesterday's vote.
- Jeremy E, London
Hi George of London, yes my thoughts also plus perhaps its being used to replace 'the John Lewis' list for MPs to furnish their 2nd, 3rd 4th whatever homes?
- Mike, London England
I wonder how much it has cost to administer the scheme for this 1 household so far?
Its always the same with Labour...shouting about their latest idea, but the small print means no one can benefit.
Just like their trumpeting of the allowance for electric cars. You cant actually buy a car that qualifies!
They just do it again, and again, and again, and again.
- Andyr, United Kingdom
Mike in London
Presumably, it has been spent on employing another 500 civil servants and created a liability for pension contributions for those 500 civil servants stretching out for the next 50 years.
Labour know no other way.
- George, London
I wonder where the rest of the £285million has gone?
- Mike, London England
A poor attempt at vote buying by this awful Labour government. And as usual, this idea is a rip roaring success.
- Dave Davies, Basingstoke
Brilliant!! Well done Darling!
- Brian, Wiltshire
