Government must help thousands on verge of repossession - Cable
September 15, 2008 8:00 PM
The Liberal Democrats have set out proposals to help families who are unable to pay their mortgages and are facing the threat of homelessness due to the downturn in the housing market.
The plans, which aim to reduce repossessions and increase the stock of social housing, include:
· Introducing regulated Mortgage Rescue Schemes to allow families struggling with repayments to sell all or part of the equity in their house and rent it back from a housing association or private firm to help keep them in their home
· Allowing councils and housing associations to borrow money to buy up land and empty new homes for use as social housing
· Courts to be given guidelines to only allow homes to be repossessed in extreme circumstances, making the mortgage lenders' voluntary code binding on all lenders
Commenting, Liberal Democrat Shadow Chancellor, Vince Cable said:
"The Government seems obsessed with fighting a losing battle to artificially prop up the housing market, rather than finding ways to deal with its worst effects.
"Ministers must act to help the thousands of families struggling to keep a roof over their heads.
"The Government should allow councils and housing associations to buy up land as well as empty homes to help replenish Britain's much depleted stock of social housing.
"Ministers must also tighten up repossession rules, to ensure that people's homes are only ever repossessed as a last resort.
"The Government should introduce regulated Mortgage Rescue Schemes. Under this arrangement, families struggling to pay their mortgage could sell part of the equity in their home and rent it back from a housing association or private firm.
"These plans could be funded using money already committed to social housing but currently unspent because of the collapse of new building. They would also save taxpayers the cost of re-housing the homeless without going down the disastrous route of giving open-ended guarantees for new mortgage lending."
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