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Mortgages: Government Assistance

Volume 491: debated on Friday 24 April 2009

To ask the Secretary of State for Communities and Local Government (1) pursuant to the answer to the hon. Member for Peterborough of 12 March 2009, Official Report, columns 746-7W, on mortgages: Government assistance, how many households deemed to have met the eligibility criteria have received financial assistance to date; (270179)

(2) how many households have been assisted by each of the local authorities which has fast-tracked the mortgage rescue scheme.

As part of the monitoring arrangements for the Government Mortgage Rescue Scheme, headline data will be published on a monthly basis on the Department's website starting this month. We will be publishing headline data for January, February and March 2009 on 30 April 2009, as pre-announced on the UK National Statistics Publication Hub, after which local authority breakdowns can be made available. The date of this publication has been delayed from 21 April 2009 owing to unforeseen issues with data quality and validation.

To ask the Secretary of State for Communities and Local Government (1) what the costs to her Department have been of establishing the Homeowner Mortgage Support Scheme; and what estimate she has made of the total cost to her Department of establishing the scheme; (270974)

(2) what recent estimate she has made of the likely cost of the Homeowner Mortgage Support Scheme for each year to 2016-17;

(3) how much she expects the Homeowner Mortgage Support Scheme to cost in each of the next eight years.

The impact assessment for Homeowners Mortgage Support (HMS) was published on Tuesday 21 April and is available at:

http://www.communities.gov.uk/publications/housing/mortgagesupportimpactassessment

The impact assessment sets out the estimated costs and benefits of HMS. We estimate that the total set-up cost for Government of HMS will be £2 million (present value); the majority of which has already been incurred as a result of establishing HMS for launch. The table sets out the profile of the overall costs to Government in each of the next eight years:

Profile of HMS costs to Government (not discounted)

£ million

Financial year

Govt guarantee cost profile

Total admin ongoing cost excluding VAT

Total Govt set-up cost

Total cost

2008-09 and 2009-10

0.08

1.7

2

3.8

2010-11

0.9

1.4

0

2.3

2011-12

2.5

0.6

0

3.1

2012-13

6.6

0.7

0

7.3

2013-14

9.6

0.8

0

10.4

2014-15

9.5

0.8

0

10.3

2015-16

8.5

0.7

0

9.2

2016-17

3.3

0.6

0

3.9

To ask the Secretary of State for Communities and Local Government what percentage of the mortgage market is represented by the mortgage lenders (a) taking part in the Government's Homeowner Mortgage Support scheme and (b) expected to join the scheme shortly; and what data she uses to calculate such market share. (271003)

Lenders covering more than 80 per cent. of the mortgage market will be providing enhanced support: to their customers through ‘Homeowners Mortgage Support’ by offering the scheme or comparable arrangements.

This includes around 50 per cent. market share who will be taking part in the Government's guarantee backed scheme, of which lenders accounting for 45 per cent. of market share opened the scheme on 21 April. A further 30 per cent. will be offering comparable arrangements to their customers.

The data used to calculate market share are sourced from the ‘CML year book and directory of lenders and associated services, 2008-2009’.

To ask the Secretary of State for Communities and Local Government what assistance will be provided to homeowners in negative equity by each of the mortgage lenders participating in the Homeowner Mortgage Support Scheme; and if she will make a statement. (271006)

‘Homeowners Mortgage Support’ (HMS) is a new scheme which will enable eligible borrowers to reduce their monthly mortgage interest payments to affordable levels for up to two years to help them get back on track with their finances if they suffer a temporary loss of income. Households in negative equity are eligible for support through this scheme.