With so many people in the UK struggling to make their mortgage payments and finding themselves fighting a losing battle, the government has initiated several schemes to help them keep their homes and not have to suffer through repossession by lenders.

These schemes include:

Mortgage Rescue

The Mortgage Rescue Scheme permits a homeowner who is having difficulty making mortgage payments to sell all or part of the property to a landlord and then become a tenant by renting the property. In this way, the family does not have to move and prevents them from losing their home and damaging their credit rating. However, only six homeowners have been able to benefit from this program since it was initiated in January. The government defends this low number by saying that there are many applications and it takes time to process them. They have recently included those who are in a negative equity position to take advantage of the scheme.

Home Owner’s Mortgage Support Scheme

With the recession and the unprecedented numbers of people who are unemployed, there are many in the UK who have recently suffered a drastic reduction in their income. Under the Home Owner’s Mortgage Support Scheme any households who have had a major reduction in their monthly income can switch to an interest-only mortgage. This plan gives them reduced mortgage payments of up to 70% for a two-year period.

Although many home owners are praising this scheme, critics claim that unless the economy makes a fast turnaround, repossession rates will reach an all-time high at the end of this two-year period. There are also fears that people who take advantage of this scheme may also run up significant debts during this time frame and be unable to make their monthly payments even if they do have a rise in their income.

While there are lenders who did agree to this scheme, many of the major UK lenders declined to take part and decided to put their own initiatives into place.

Support for Mortgage Interest

Taxpayers in the UK can now claim support for mortgage interest on mortgages of £200,000 instead of £100,000. The waiting period has also been reduced to 13 weeks from 39 weeks. Critics do applaud the government’s action but suggest that the individual income of the homeowner be used as eligibility criteria rather than the total of the household income.

Pre-Action Protocol

In order to keep as many families as possible in their homes, the government instituted the pre-action protocol for judges in November. Under this scheme, judges must make sure that everything possible has been done to stall repossession of a home when they are asked to grant a repossession order. Since this came into force, there has been a reduction of about 50% in the number of repossession orders that have been approved.

Free Legal Help

Homeowners facing repossession orders in the courts of the UK are entitled to free legal help. This also applies to those facing eviction orders. This scheme allows homeowners to have legal representation to help them fight their battles in court without having to add to their already mounting debts.

Preventing Repossession Fund

£20m has been set aside for local authorities to provide help to struggling homeowners in the form of small loans and one-time payments when they are having difficulty being able to make their mortgage payments.

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