Division over mortgage rescue scheme

The mortgage rescue scheme proposed as part of the government’s raft of measures to tackle the slump in the housing market has been met with a divided response from brokers and trade bodies.

The Department for Communities and Local Government £1bn rescue plan includes £200m which has been set aside to provide support for up to 6,000 of the most vulnerable home owners facing the threat of repossession.

It will work by allowing social landlords to buy properties at risk of repossession, with home owners continuing to live in their home as part owners or as tenants.

Ruth Davison, the director of campaigns and neighbourhoods at the NHF, says: “The mortgage rescue scheme is excellent news and is a charter for saving thousands of households from the nightmare of repossession.”

She adds: “This scheme will also serve to undermine those shadowy companies currently making money out of people’s misfortune by buying their properties at substantially less than the going rate, and then only letting them stay on a short-term tenancy basis.”

But Mike Fitzgerald, sales director at Brentchase Financial Services, says: “Of course it is right to help but the issue here is cost of living, and not mortgage rates. Alistair Darling is responsible for the cost of living and is now trying to clean up the mess.”

“It is a typical government plan with a little bit of money washing around a lot of agencies with little effect.”