£285million Mortgage Scheme Helps Just One Family

Mass demolition in Stoke-on-Trent

Back in September the Government announced new measures to help out those people in danger of repossession. The cost of the scheme was estimated at £285million, and guess how many families it has helped so far? (Clue, the answer is in the title). Yep, it’s helped just one family.

Under the terms of the scheme, homeowners who are struggling with their mortgage repayments would be able to sell a share, or all, of their property, to a “social landlord”, and then rent it back, enabling them to stay in their home instead of facing repossession.

On the face of it, this scheme was, as was widely predicted at the time, doomed to failure, and an expensive one, at that. But there are a few factors which make this story a little more positive than it may seem.

Firstly, it was expected to take a few months for the scheme to kick in, and there are now apparently a few hundred applications for it in the pipeline (it was expected to help 6,000 families in all). The Chancellor also announced some changes to the scheme in the recent Budget, and these are intended to increase the number of people who could be eligible from next month.

But the low take up might also suggest that the number of repossessions for this year may now not be as bad as expected. 75,000 repossessions were predicted for 2009, but unless the numbers rocket (and lets not rule anything out at the moment), then the total should be well below that. Let’s hope that this is the reason for a low take-up of the scheme.

Creative Commons License photo credit: Futurilla

2 thoughts on “£285million Mortgage Scheme Helps Just One Family

  1. The whole idea was ill conceived and many industry commentators told the Government so. As for the repossessions numbers, I think the worst is yet to come…

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