BBC ONLINE 19.2.09
PM 'raised false mortgage hopes'
Gordon Brown has been accused by the Tories of raising false hopes
over a promised scheme to help people struggling with mortgage payments.
When the PM announced the Home Owner Support Scheme in December he
said it would be available from early 2009.
The scheme will now be launched in April due to protracted
negotiations with lenders over how it will work.
Ministers say it has not been delayed but the Tories say something
has clearly gone "horribly wrong".
Shadow housing minister Grant Shapps said the scheme, which was meant
to help people facing a sudden drop in income defer mortgage
payments, was announced with such a "flourish" it had even "upstaged"
the Queen's Speech on the same day.
But the details had not been fully worked out and lenders had not
signed up to it to the extent Mr Brown had claimed, Mr Shapps alleged.
'Confusion'
He told BBC Radio 4's The World at One: "It looks to me like an
attempt to grab the headlines by the prime minister rather than
actually deal with the problems."
He said it was "completely wrong for the government to announce a
scheme where the details haven't been worked out and where months
later people's expectations will have been dashed because actually
they are still losing their homes rather than the scheme being in
place." [see below-cs]
Sue Anderson, of the The Council of Mortgage Lenders, said the
apparent delay in implementing the policy had "caused consumers some
confusion and some sense of not knowing where to turn in the meantime".
She said there had been a lot of discussion between the government
and lenders about how the scheme would work and it had needed
legislation to be passed before it could begin.
But she added: "When there is a gap between an announced policy
measure and its implementation, inevitably people wonder what's
happening and try to find out about that."
She advised people concerned about meeting their mortgage payments to
"talk to their lender at an early stage".
Chris Tap, associate director of debt relief charity Credit Action,
said there had been slow progress on the scheme and the way it was
announced had been "messy".
"The whole scheme has come together a little bit on the hoof," he
said, and it was "confusing" for the public.
'No delay'
In December, Mr Brown said eight major mortgage lenders had signed up
to the plan in principle.
But nearly three months later, the government is still locked in
talks with lenders over how the scheme, which is meant to cover
mortgages worth up to £400,000, will work.
The idea is that lender and homeowner will agree on the proportion of
payment to be deferred up to 100% but the government is understood to
have clashed with lenders over the extent to which it will underwrite
it.
A spokesman for the Department for Local Government and Communities
said the scheme had not been delayed as a firm date for its launch
had not been announced until now.
Cabinet Office minister Liam Byrne told the World at One: "Our goal
is to get the mortgage support scheme up and running in April and
actually you can now get hold of help with mortgage interest if your
house is worth £200,000 or less." [THAT doesn’t agree with what the
lenders or the borrowers say! -cs]
He said it was "misleading" to focus solely on the mortgage support
scheme when there "five different ways" the government was helping
people with mortgage payments.
These included the mortgage rescue scheme, in which housing
associations take an equity stake in properties, and a deal with
lenders not to repossess homes within the first three months of arrears.
He contrasted the government's approach that of the Conservatives,
who he claimed would "do nothing" to help people through the recession.
It comes as figures from Council of Mortgage Lenders (CML) suggest
the number of homes in the UK repossessed by lenders rose last year
by 54% to 40,000.
Despite the recession, the CML said this was fewer than it had
originally predicted, but it expects repossessions this year will
reach about 75,000.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-
The World at One, Radio 4 at 13:16 | 20/02/2009
We need concrete steps, not spin to ease repossessions, says Grant
Shapps
Grant Shapps, Shadow Housing minister
Mr Shapps accused the government of spinning rather than taking
concrete action, following news that the Home Owner Mortgage Support
scheme would not be effective until April.
“It’s not happened. It turned out within an hour of him announcing it
the details hadn’t been worked out,” he said.
He added: “Rather than sort of spinning out lots of different plans
we need some sort of concrete steps”.
Mr Shapps also said that the government should shoulder the blame for
the aggressive lending that has left many unable to pay their debts.
“We certainly believe there are millions of families out there who
have been effectively led up a garden path by a lending regime that
was put in place by this Prime Minister,” he said.
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