A long-awaited taxpayer-backed scheme to help recession-hit families avoid having their
homes repossessed will come into force today, on the eve of the Budget. As a result
some hard-pressed homeowners will be able to reduce monthly mortgage payments for up to
two years after lenders representing what officials said was more than 80% of the
market agreed to offer support.
The mortgage lenders listed below have agreed to offer help to their customers through
HMS:
* Bradford and Bingley
* Cumberland Building Society
* Lloyds Bank Group, including Halifax and Bank of Scotland
* National Australia Bank Group, including Clydesdale Bank and Yorkshire Bank
* Northern Rock
* Royal Bank of Scotland, including NatWest and Ulster Bank
A number of other banks, building societies and specialist lenders will be offering HMS
to their customers as soon as possible. These include:
* Bank of Ireland, including Bristol and West
* GE Money
* GMAC
* Kensington Mortgages
* the Post Office
* Standard Life Bank
One recent survey showed as many as 35% of people were worried to some degree about
losing their homes and the Government has faced criticism for delays in implementing
the scheme, first announced in December.
The Homeowners Mortgage Support (HMS) scheme is designed to offer "breathing space" to
households who have seen their income cut because of losing a job or being forced to
cut working hours as the recession bites.
Any reduction will have to be made up once the period is over.
It was unclear last night how many lenders offering help were doing so as part of the
Government scheme - with a guarantee backed by the taxpayer - and how many were
offering "comparable arrangements".
But officials insisted both would offer "a similar level of support" and those on
individual schemes would be offered the kind of "independent money advice" that would
be a requirement for the state-backed one.
The HMS provisions are restricted to owner occupiers who bought properties before
December last year, owe less than £400,000 on the mortgage and have savings of less
than £16,000.
They must also have a regular household income, have not missed any payments for five
months and be able to pay at least 30% of the total interest payment due every month.
The scheme, which received European Commission approval under state aid rules
yesterday, has already been criticised following claims that it may help only 6,000
people, while concerns have also been expressed that it will simply defer a
'repossessions spike' until 2011.
Mr Darling addressed the private weekly meeting of Labour MPs and peers in Parliament
last night, telling them his Budget would focus on jobs and looking to the future of
the economy.
The Chancellor was warned by the respected Institute for Fiscal Studies (IFS) yesterday
that his plans to raise taxes for top earners would probably generate only a third of
the £1.6billion that he is expecting.
Mr Darling is widely expected to announce a further £10 billion in Whitehall efficiency
savings - on top of the £5 billion already pencilled in - as he attempts to get the
public finances back on track.
But voters appeared to have lost faith in his handling of the economy as a new opinion
poll showed the Tories had moved into a 10-point lead (35% to 45%) on the key issue.
It is a significant reverse for Mr Darling and Prime Minister Gordon Brown who enjoyed
a seven-point lead over counterparts George Osborne and David Cameron on the same
indicator at the start of last year.
Speaking to the BBC, Mrs Beckett insisted the scheme was not a "payment holiday" and
would offer temporary help to hard-pressed home-owners.
She said: "The idea is to try and help people who haven't lost everything and who
aren't going to be eligible, if they are unfortunate enough to have their house
repossossed, to be rehoused under homeless legislation, but whom nevertheless are
having difficulties.
"Maybe one of them has lost their job but not both, maybe it is just that they have
lost their overtime, but one way or another they are struggling with the mortgage
payments that they could meet before."
She added: "Hopefully this difficulty is somewhat temporary. This is not a payment
holiday, people do need to go on paying as much as they can from their mortgage.
"The really crucial thing is to talk to their lender as soon as possible and to get
independent financial advice."
Shadow housing minister Grant Shapps said: "Gordon Brown claimed that hard-pressed home
owners would get mortgage help back in December, but since that time over 28,000
families have lost their homes.
"It's outrageous to announce schemes which promise immediate help, yet take five months
to put in place. Brown should apologise to those whose hopes were raised, only to have
them dashed by ministers' inactivity."
Commercial property for sale or rent
in the UK - find lettings, investment property and commercial property agents with
ukbusinessproperty.co.uk
