Mortgage rescue plan fails to impress

The government’s £285m Mortgage Rescue Scheme has come under fire after figures last week showed it has only helped 276 households since it was launched in January 2009.

Some 182 households accepted offers through the scheme in Q4 2009 – twice the amount who accepted offers between January and October. In total, 4,310 home owners with payment problems approached their local authorities in Q4, 1,785 of whom applied for the scheme.

Aimed at helping 6,000 house-holds the scheme has two elements. It offers shared equity for those who have experienced payment shocks and a facility whereby registered social landlords can buy a home for 97% of its market value and rent it back for 20% below the market rate.

Danny Lovey, proprietor of The Mortgage Practitioner, says he has tried to get an elderly couple on the scheme for a year but had no luck. The couple are not able to pay the mortgage on their £124,000 property.

Lovey says it wasn’t until the final hurdle that they were told they were not eligible and they will now be forced to sell their home.

Lovey says: “It’s shameful. As with a lot of government policies it’s all spin and no substance.”