Housing Minister, Margaret Beckett, admitted the Mortgage Rescue Scheme - that is aimed to help homeowners who are under threat of repossessions - had only helped 2 households since January.

Mortgage Rescue Scheme launched by the Government in January this year has revealed its failure on Tuesday (02/06/2009), where it has - so far - only helped 2 households to fight against repossessions.

Background of the Scheme

The scheme, a £285 million package, is launched aiming to prevent and help vulnerable families who are losing their homes or experiencing repossessions. It is set to bring local authorities, Registered Social Landlords (RSL), lenders and debt advice agencies together to operate two main elements of the scheme, which are shared equity and government mortgage to rent.

Shared Equity works where RSL provides an equity loan enabling the householders’ mortgage repayments to be reduced.

Government Mortgage to Rent works where RSL clears the secured debt completely and the applicant pays rent to the RSL at a level they can afford.

Excerpt from Communities and Local Government*

By the time the Government launched the scheme, there were about 20,000 homes that had been repossessed; even worse, a house was seized in every 7 minutes.

Progress

Official figures have showed that 4202 households have approached the Council for assistance and mortgage difficulties; of which over 1,000 individual families approached the Council base on this month - while just 50% was eligible to apply for the Mortgage Rescue Scheme. Overall, only 376 are being possessed at the moment including on-going applications over the previous months. More significantly, only 2 households have accepted the offer through the scheme since launched.

Comments

While the Government was being blamed for not providing helpful solutions to the people who are struggling from financial problems, Government spokesman still defended that many families had approached and received financial advice under the scheme.

However, it has been stated that even though the Government claimed that many people had received advice under the scheme, this does not mean they had been given actual and appropriate financial help.

Criticism towards the official statistics report on the Mortgage Rescue Scheme was further made by Tory Philip Davies who pointed that the Government was glory headline-seeking and try to “pretend” they are helping the public, “when they actually fail in reality to deliver any tangible help to people suffering hardship through no fault of their own”**