Just six families helped by government Mortgage Rescue Scheme

Britain is facing a reposession timebomb, Vince Cable warned yesterday, as it emerged just six families have been helped by the Government's Mortgage Rescue Scheme.

Vince Cable - Just six families helped by government Mortgage Rescue Scheme
Vince Cable: 'Repossessions are likely to soar in the next two years because of rising unemployment' Credit: Photo: Heathcliff O'Malley

The scheme, which cost more than £280 million to put in place, was launched at the beginning of this year, with the Government saying it would reach its 6,000 target within two years.

But increasing numbers of households are struggling to meet their monthly mortgage payments and face losing their homes amid the recession.

Politicians described the figures as "absolutely pitiful", saying it didn't begin to address the true extent of the problem facing Britain's home owners.

Liberal Democrat Treasury spokesman Vince Cable said: "Repossession is a ticking time bomb.

"The numbers of repossessions are likely to soar in the next two years because of rising unemployment. Temporary Government schemes are deferring the problem, not solving it."

And he warned: "If interest rates start to rise next year, the problem will become even more severe."

Almost 1,000 home owners are being evicted every week, according to the Council of Mortgage Lenders.

Repossession numbers reached 12,800 in the first three months of this year, a rise of more than 50 per cent from 8,500 this time last year.

Housing Minister John Healey said: "We have put in place help for home owners struggling with their mortgage at every step of the way."

But the problem is now so severe that the Government is establishing a new team to fast-track the cases of those most at risk of repossession.

Under the Mortgage Rescue Scheme, eligible families can either get an equity loan to reduce their mortgage, or sell their home and remain as tenants.

It is one of several Government measures to help struggling home owners, which include the Homeowners Mortgage Support Scheme, which allows home owners facing a loss of income to reduce their monthly mortgage payments for up to two years.

By the end of May, 200 households had repossessions proceedings stopped while they were being assessed for the Mortgage Rescue Scheme.