House of the rising sums

Dec 7 2008 by David Williamson, Wales On Sunday

The Government and the Bank of England are trying to ride to the rescue of the housing market. But will slashed interest rates and a new mortgage support plan do enough to prevent misery for thousands of Welsh families?

QI’m worried about losing my job and then losing my home. Will the Homeowner Mortgage Support Scheme help me out?

AThe Government clearly expects a rise in unemployment and is determined to prevent a rush of repossessions.

If you experience a sudden fall in your income you may well be able to defer some of your interest payments on your mortgage for up to two years.

These will be added to your outstanding mortgage debt and have to be paid off when your finances improve.

QHow do I know if I qualify?

AThe precise details are still being hammered out. However, it is aimed at people who would not qualify for other Government help, such as households where one earner is made redundant but the other continues working, or where a homeowner loses only part of their income through reduced shifts.

QI took out a big mortgage for the family home. Will I be covered?

AProbably. The scheme will cover mortgages up to £400,000.

QWhich lenders are taking part in the scheme?

AHalifax Bank of Scotland, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays, Royal Bank of Scotland and HSBC have all signed up – they represent 70% of the market. Monmouthshire Building Society and Principality are both waiting to see the full details of the scheme.

QI’m already in trouble and need help. When does the scheme begin?

AIt should be up and running early next month.

QHang on a moment! How much are taxpayers having to fork out to help people with mortgages they can’t afford?

AThe Government has guaranteed that lenders in banks and building societies will not lose money if borrowers are later unable to repay the debt.

QSo hard-working people are footing the bill? This sounds like another bail-out.

AIt has not been said how much the scheme will cost but it is estimated the Government will take on around £1bn of liabilities.

QWhat other help is there for those of us who are struggling with our mortgages?

AThere is the £200m Mortgage Rescue Scheme. Homeowners can sell some or all of their home to a social landlord and rent it back again.

Plus, the Department for Work and Pensions is reforming its Income Support for Mortgage Interest initiative so benefit kicks in after just 13 weeks and covers interest repayments on mortgages of up to £200,000.

QIs the Welsh Assembly Government doing anything?

AYes. There are grants for housing associations to buy a share of your mortgage or buy your property outright and then rent it back to you.

QDoes this scheme work?

AIn 2007-08, the Assembly Government provided £850,000 to help 15 households to remain in their homes. A further £5m was provided in June.

QIt’s so confusing and I’m desperately worried. Who can I turn to?

Read full article here: House of the rising sums