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Housing Transactions

Volume 502: debated on Tuesday 8 December 2009

3. How many completed transactions there have been under the (a) mortgage rescue scheme, (b) homeowners mortgage support scheme and (c) rent to homebuy scheme. (304599)

By the end of September, there had been almost 100 completions under the special mortgage rescue scheme and 1,800 rent to homebuy completions. Homeowners mortgage support scheme figures will be published later this month.

Even without the unpublished figure, which is presumably pretty bad, is this not a sad little tale? It is all hype, spin and nonsense. It is about spending taxpayers’ money to set up schemes that have benefited hardly anybody. Would the Minister care to apologise?

I am stunned. What on earth does the right hon. Gentleman say to the 100 families who are still in their own homes because of this special back-stop scheme? What does he say to the 1,000 families whose applications are in the pipeline? What does he say, too, to the 330,000 families who have had help across the range of advice from Government over the past year, which has helped them when they have been struggling with their mortgage repayments and helped them to stay in their own homes without running the risk of repossession, and which is testimony to the fact that this Government have been ready to act, unlike what happened in the 1990s? That is why repossessions are running at half the rate of the last recession.

As the housing market recovers and house prices rise, there will be a temptation for some lenders who have hitherto exercised forbearance to move to repossess properties. Will the Minister ensure that the measures that have been put in place to protect home owners are kept in place until we are completely out of the woods, in order to avoid a second spike of repossessions?

My hon. Friend is absolutely right. Our experience tells us and our forecasts say that, as the economy moves out of recession during next year, the pressure on repossessions will increase. I can do better than she urges me: we will not only look to keep the current support in place, but we will extend and strengthen it. We are extending the campaign that allows people to get access to free advice. We are toughening up the rules in court, too. Through the Financial Services Authority, we are also looking at toughening up the regulations on lenders, so that any repossession is genuinely a last resort. In this way, we can get ahead of the pressures we anticipate for next year, and try to ensure that more families are able to stay in their own home, which is where they should be, despite the pressures of recession.

The Minister spoke of the need to extend and strengthen the schemes. Specifically, will the Department be looking at monitoring the impact that unsuccessful applications have on individuals? A constituent of mine took several months to make what was eventually an unsuccessful application. As a result, their personal financial circumstances were worse, not better. Does the Minister’s Department not need to understand that impact, so that it can be sure it gets the scheme right?

The hon. Lady did not mention which scheme she was talking about. I assume that it was the mortgage rescue scheme—

She might like to know that we have almost trebled the number of housing associations that are part of the scheme. We have a fast-track team in place that takes referrals directly from lenders and we are doing exactly as she urges—we are learning from the experience of the scheme so far and improving it so that it is better at providing the support that is needed. If the hon. Lady would let me have the details of her case, I shall certainly look into it.

The Minister is giving the House a lot of figures, so can we ask for one more? How many people to date have actually bought a home through the rent to homebuy scheme?

The hon. Gentleman might not have been listening when I gave my first answer. At the end of September, the figure was more than 1,800.

We are very grateful to the Minister for that answer. Perhaps he will be able to tell us in a moment exactly how much that cost per person, given that expenditure on the scheme was £115 million.

The mortgage rescue scheme was meant to help up to 6,000 households at a cost of about £47,000 each. Since it has helped only 92 households to date, that works out at about £3 million per person helped. Is that the value for money that we can expect from tomorrow’s pre-Budget report?

I am disappointed in the hon. Gentleman. He was on the shadow Treasury team for a while, and perhaps we have seen why he is now on this team. He confuses expenditure with budgets. Not only have nearly 100 families stayed in their own homes because of the mortgage rescue scheme back-stop, but some 1,000 applications are in the pipeline and more than 11,000 families have had help and advice directly from their local authority that is part and parcel of the scheme. That is only part of the help that we have put in across the piece to help home owners who are struggling with their mortgages to stay where they should be—in their homes.