Lib Dems reveal plan to ease mortgage problems

THE Liberal Democrats yesterday unveiled proposals to help families who are unable to pay their mortgages.

Vince Cable, the Lib Dem Treasury spokesman, said change was needed urgently to stop the "downward spiral" of Britain's housing market.

Proposals include a mortgage rescue scheme, which would allow families struggling with repayments to sell all or part of their house to a housing association or private firm and then stay in the property as tenants.

The government should also allow councils and housing associations to borrow money to buy up land and empty new homes "to help replenish Britain's much- depleted stock of social housing", the Lib Dems suggest.

Mr Cable urged Jack Straw, the Justice Secretary, to give guidelines to the courts so that homes could only be repossessed in extreme circumstances.

He said: "The government seems obsessed with fighting a losing battle to artificially prop up the housing market, rather than finding ways to deal with its worst effects."

The plans could be financed using funds already committed to social housing but currently unspent due to the collapse of new building.

The Lib Dems' call came as Taylor Wimpey, the UK's biggest housebuilder, racked up half-year losses of 1.54 billion after market turmoil forced the firm to slash the value of its land bank.