Mortgage Rescue Scheme to Face Cuts
The Mortgage Rescue Scheme which allows people to sell their property to a council or housing association and remain in the property as a tenant is going to face cuts along with other public schemes. Housing Minister Grant Shapps said reducing the deficit to keep interest rates low was a more effective way of helping homeowners.
When the scheme was launched in January 2009 by the previous Labour government it was estimated that up to 6,000 households could be helped by the measure. The scheme in England alone has thus far helped 629. Another 1,849 are in the process of completing applications. The scheme also allows homeowners to sell part of their homes to reduce their mortgage payments. Housing groups agree that government support has slowed down on repossessions. Mr. Shapps said that the Mortgage Rescue Scheme needed to be revisited since the kitty left in the scheme is due to run out of funds this year. Mainly the scheme needs to find a way to get better value in relation to funds paid out. Funding levels are due to be looked at in a review scheduled for October. "The most effective thing the government can do for homeowners is to tackle the record deficit and avoid the need for rapid increases in interest rates," Mr. Shapps said. "But there must be effective help on hand for those struggling to pay their mortgages."