Brown unveils mortgage rescue scheme

The Department for Communities and Local Government has unveiled a 1bn package to stimulate the housing market.

Hazel Blears, communities secretary, says the aim of the cross-government plan is to help first-time buyers struggling to get onto the housing ladder, support vulnerable homeowners at risk of repossession and support the house building sector.

The measures include:

* A 300m shared equity scheme to 10,000 first-time buyers.

* A 200m mortgage rescue scheme to support up to 6,000 of the most vulnerable homeowners facing repossession

* A 100m investment to support Support for Mortgage Interest reform which could help prevent a further 10,000 repossessions. The government will shorten the waiting period before SMI is paid from 39 weeks to 13 weeks.

* A 400m boost in spending power for social housing providers, including registered social landlords and councils with the aim of delivering 5,500 more social houses over the next 18 months.

The government will also work with Regional Development Agencies to support the most critical regeneration schemes with the most potential to transform their communities.

Blears says: “This government is committed to practical action to help those most affected by the current state of the housing market. We are working to make sure everyone struggling to pay the mortgage gets support and advice.

We are giving a leg-up to first-time buyers keen to own a place of their own. And by bringing forward our investment in social housing, we are both getting more decent, affordable housing ready for people to live in sooner, and helping the house building industry weather tough times.”