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Mortgages: Government Assistance

Volume 487: debated on Wednesday 4 February 2009

To ask the Secretary of State for Communities and Local Government what estimate her Department has made of the (a) maximum and (b) average number of households which will receive support each year from the Homeowner Mortgage Support Scheme in each of the next three years. (251772)

The Homeowner Mortgage Support Scheme is a consumer and lender-led scheme, supported by a Government guarantee. The Government want to see this scheme provide incentives for lenders to help as many struggling homeowners as possible. We will publish a full impact assessment when the scheme description has been finalised.

As part of a wider package of real help for homeowners, this scheme should enable ordinary hard-working households that experience a redundancy or significant loss of income to reduce their monthly payments to a more manageable level, by deferring a proportion of the interest payments on their mortgage for up to two years.

Homeowners remain responsible for repaying the mortgage in the long term but the scheme will result in more affordable monthly payments. This will give them the breathing space they need to get their finances back on track, and help ensure they can stay in their homes.

To ask the Secretary of State for Communities and Local Government which banks and building societies have agreed to participate in the Homeowner Mortgage Support Scheme; and on what dates each agreed to do so. (253879)

The country’s eight largest lenders—HBOS, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays, RBS and HSBC—representing 70 per cent. of mortgage lending, agreed in principle to support the new Homeowner Mortgage Support Scheme prior to the Prime Minister’s announcement on 3 December.

The scheme should enable ordinary hard-working households that experience a redundancy or significant loss of income to reduce their monthly payments to a more manageable level, by deferring a proportion of the interest payments on their mortgage for up to two years.

Government are now working with a wider group of lenders to finalise the scheme design and agree implementation plans.