Home rescue project 'has helped only two families'

Published on Wednesday 10 June 2009 00:31

A £285 MILLION government scheme designed to give relief to thousands of struggling homeowners facing repossession has helped just two families, MPs were told last night.

Shadow housing minister Grant Shapps attacked the flagship Mortgage Rescue Scheme, which he said on present trends would give support to only about a dozen homeowners.

This was despite the fact more than 31,000 homes had been repossessed since the scheme was launched last December.

Opening a Commons debate on ministers' housing policy, Mr Shapps condemned the "minimal" take-up of various government schemes to help homeowners facing tough times.

He said: "These schemes have done so little to help real families in real distress."

Mr Shapps called on ministers to scrap controversial home information packs, which he said had damaged the housing market, and to end stamp duty for first-time buyers.

Turning to the Mortgage Rescue Scheme, he said: "This was a two-year scheme designed to help 6,000 of the most vulnerable families to avoid repossession. Four months into the two years, rather than anything like 6,000 families being helped, just two families have been rescued.

"On the current trend, just 12 families will be helped by this scheme over the two years.

"This is despite more than 4,000 homeowners approaching their local authorities for help and an estimated 31,000 homes repossessed since the time the scheme was launched."

New housing minister John Healey said that without government intervention during the recession there would be more people losing their homes and fewer homes being built. He said that, thanks to ministerial initiatives, lenders were looking at repossession as a "last resort".

Labour's Phyllis Starkey, chairwoman of the communities and local government select committee, hit out at Mr Shapps's "vacuous and… positively dangerous" comments.

She said criticising the take-up of government schemes was "not a realistic assessment".

The Tories' motion, expressing disappointment at the "minimal take-up" of the mortgage rescue scheme, was rejected by 298 to 208. The government's amendment, hailing its "comprehensive support" to help households avoid repossession, was carried without a vote.