Brown acts to help struggling families

Published on Monday 1 September 2008 23:08

GORDON Brown, the Prime Minister, will unveil the first of a series of new policies today in an attempt to regain the political agenda after Westminster's summer holidays.

He will publish proposals to help people at risk of having their homes repossessed and aid first-time buyers who have been unable to get into the market as a result of the shortage of mortgage deals.

Mr Brown wants to show that the government is helping families struggling under the worst effects of the economic downturn.

However, he will make clear that the plans – which will not apply in Scotland, as housing is devolved to Holyrood – will not provide help to people who have acted "recklessly or irresponsibly" in failing to keep up with their mortgage repayments.

A document from the Department of Communities and Local Government states: "It is firmly targeted on those families who can no longer afford their repayments, and who would be eligible for homelessness assistance."

Today's announcement will be followed by a wide-ranging speech on the economy to CBI Scotland's annual dinner on Thursday. Mr Brown's aim is to arrive at the Labour Party conference in Manchester later this month having dispelled talk of a leadership challenge.

Under his new plans, local authorities will be involved in determining which families are eligible for help, with councils and housing associations looking to take over a share of a struggling family's mortgage. Separately, more money will be provided to housing associations to build more social housing.

Housing industry experts said first-time buyers were a vital cog in getting the market moving again, but stressed that providing clarity over the possibility of a stamp duty "holiday" was just as important.

Crawford McCaughie, chairman of the Council of Mortgage Lenders Scotland, said: "First-time buyers make things move. If the first-time buyers' market doesn't move, neither does the second, third and fourth."

Peter Bolton King, the chief executive of the National Association of Estate Agents, said there was not a "single golden bullet" to solve all the problems of the housing slump.

He went on: "They might perhaps allow local authorities to take a stake in a property. But the big question is: where is the money coming from to allow them to do that?"