COMMUNITIES AND LOCAL
GOVERNMENT News Release (280) issued by COI News Distribution
Service. 24 November 2008
A cross-government
package of new measures and reforms to provide real help to
families at risk of repossession was today announced by the
Chancellor Alistair Darling in the Pre-Budget Report.
The measures are the next steps in a wide range of support the
Government is putting in place to make sure that hard working
people who suffer a loss of income through no fault of their own
have the option to stay in their homes, and that repossession is
always a last resort.
The measures include:
* Agreement with major lenders to wait at least three months
before initiating repossession proceedings, in order to explore
all other alternatives. The Government has also welcomed the
commitment by lenders to look at all possible options to prevent
repossession, such as reducing payments and mortgage rescue schemes.
* Bringing forward the Government's £200 million Mortgage
Rescue scheme to start early in a number of local authority areas.
More than 60 councils throughout England will be 'fast
tracking' the set up of the Mortgage Rescue scheme and will
start taking applications from the beginning of December. The
scheme will help up to 6,000 of the most vulnerable households
avoid the trauma of repossession over the next two years.
* Enhancing the Mortgage Rescue scheme to cover vulnerable
families at risk of repossession because of additional loans
secured on their home. Often families are more likely to default
on these loans because of higher interest rates.
.
*
Announcing a further £15.85 million to extend free debt advice to
be made available to all consumers across the country.
* Increasing the support available for those eligible households
paying the interest on their mortgages. Under new changes to the
Support for Mortgage Interest scheme, the capital limit on which
eligibility for assistance is calculated will be doubled to
£200,000 and the standard interest rate for this support will be
frozen at the current rate of 6.08% - ensuring those with higher
value loans and on fixed rate mortgages don't miss out.
* New action on second charge lending . The Office of Fair
Trading will bring forward new sector guidance early next year to
help ensure borrowers are treated sympathetically and second
charge lenders do everything possible to avoid repossessions.
Housing Minister Margaret Beckett said:
"We are determined to do everything possible to provide real
help now to homeowners facing tough times, and that means doing
all we can to ensure repossession is always a last resort.
"It is our priority to make sure that hard working
homeowners who suffer a loss of income through no fault of their
own have the option to stay in their homes. The new measures
announced today will expand the support available to those who
need it most.
"Everyone needs to do their bit to help families avoid the
traumatic impact of repossession, and we expect lenders to do more
to build on work already underway to help their customers."
Consumer Affairs Minister Gareth Thomas said:
"We want
to make sure that homeowners with second loans secured on their
home get a fair deal.
"We will create a new framework of minimum standards for
responsible behaviour by firms throughout the life of a loan -
from the decision to lend money, through ongoing relationships
with customers, to what happens when things go wrong.
The measures announced today follow a number of actions the
Government has already taken to help families at risk of
repossession including,
* A new mortgage pre-action protocol, introduced by the Civil
Justice Council, came into effect last week. The new protocol
makes clear that repossessions should be a last resort. Lenders
are expected to discuss and agree with borrowers alternatives to repossession.
* New support measures to help vulnerable homeowners meet their
mortgage interest payments. The DWP is reforming Income Support
for Mortgage Interest (SMI), by shortening the waiting period
before SMI is paid from 39 weeks to 13 weeks for new working age
claims. This will come into effect from 5 January 2009.
* Expanded free legal representation in county courts for
households at risk of repossession. There are now
government-funded court desks providing free legal representation
at repossession hearings, in nearly all county courts. These are
successful in preventing immediate repossession in up to 85% of
cases when people attend court.
* A £10 million package to increase the provision of legal
services already in place to offer advice to households in
difficult financial circumstances. Services include face to face
debt and financial advice, a national debt helpline and
homelessness prevention work by every local authority.
Notes to editors
1. Under the £200 million Mortgage Rescue scheme, eligible home
owners will be offered either a shared equity option, enabling
monthly mortgage payments to be reduced, or the option to sell
their house to a housing association and remain in the property as
a tenant paying subsidised rent. The scheme is expected to be up
and running in full in the New Year.
Local authority involvement in the Mortgage Rescue scheme is
voluntary. A full list of 'fast track' authorities is below.
South West
Salisbury (SW)
Penwith
Plymouth
Sedgemoor
Weymouth
South East
Cherwell (SE)
Tunbridge Wells
(SE)
Tambridge and Malling (SE)
Slough (SE)
Maidstone
(SE)
Dartford
Shepway
Eastbourne
Portsmouth
Rother
Gosport
Guildford
Adur
Worthing
Wycombe
Wealden
Slough (SE)
London
Lewisham (LON)
Waltham Forest
Westminster City Council
Havering
Greenwich
Harrow
Hillingdon
East
Broadland
Bedford
Basildon
Fenland
Mid
Beds
East Mids
Northampton (EM)
Leicester (EM)
Rutland
West Mids
Solihull (WM)
Warwick
Worcester
Walsall
North West
Wigan (NW)
Preston (NW)
Oldham
(NW)
Elsemere Port and Neston
St.
Helens
Wirral
Blackpool
Knowsley
Traffod
Manchester
(NW)
Ribble Valley
Yorkshire Humber
Doncaster
Scarborough (Y/H)
North East
Stockton (NE)
North Tyneside
Darlington
Middlesborough
News Releases: http://www.communities.gov.uk/newsroom