Officials from the Council of Mortgage Lenders said: “Essentially this package is directed at the blockages in the housing market for some vulnerable consumers. This is welcome, but until more funding is available we are still some way from restoring long-term stability to the housing and mortgage markets. But we welcome the announcement of reforms to Income Support for Mortgage Interest next spring, where the waiting time for new claims is being cut from 39 weeks to 13 weeks, and the upper ceiling for the size of mortgage that will be met is being raised to £175,000.”

The CML added: “The mortgage rescue proposals for some borrowers who would otherwise become homeless, while also welcome, will help only perhaps 6,000 households over two years. The new shared equity product to help first-time buyers will be useful for a particular tranche of would-be home-owners who genuinely wish to enter the market now. The proof of the pudding will be in its uptake. The stamp duty concession for properties under £175,000 is something of a curate’s egg – good in parts.”

There was also a response from the Royal Institute of Chartered Surveyors, which said: “The government has failed to listen to the property industry and respond to market pressures and their proposed measures will have little impact on those suffering as a result of the current crisis. Action to increase lending by improving liquidity in the mortgage market is essential as part of a coherent package of measures alongside help for first-time buyers and protection against repossession.”

It went on to state: “Without making it easier to get a mortgage, the government is doing no more than tinkering around the edges of the housing market downturn.”

Officials from the housing charity Shelter have said: “The package of measures shows the government is listening and trying, and taking all the steps that it could. However, what has been announced will still be dwarfed by the massive scale of the housing crisis, and will be very limited in helping enough homeowners to turn the market around. The package will only really help about 15,000 people in total, but with 45,000 set to be repossessed this year, hundreds of thousands priced out of the market and millions stuck on the council house waiting list, the help the government is offering doesn’t go far enough.”

Mixed reactions on housing proposals from government is a post from: Glitec Loans

Officials have said that the scheme is part of the Prime Minister’s plans to try and tackle the economic downturn and the problems that are facing the housing and mortgage markets. Gordon Brown has been drafting plans to try and tackle the many problems facing the housing and mortgage markets, and a number of measures are going to be put into place.

However, the possibility of this extended guarantee on loans has fuelled concern amongst critics, who have said that using taxpayer’s money to back up the mortgage market brings with it many risks. Reports suggest that government officials are aware of the risks that will come with this move, including the risk of lenders behaving recklessly when it comes to lending because of the guarantees that are in place.

One official, former Halifax boss Sir James Crosby, has been assessing ways in which the government can help to breathe life back into the mortgage and housing markets.

A spokesperson from the Treasury spoke about the project, stating: ‘One major problem is a lack of mortgage finance, so if there is anything we can do to help with that we should think about it. If Sir James comes back with something credible that doesn’t expose the taxpayer to too much risk then we would be wrong not to consider it.’

Mortgage bailout could cost taxpayers £40 billion is a post from: Glitec Loans

The Housing Minister, Caroline Flint, said: “We want to ensure there continues to be stability and fairness in the housing market, and that the support is in place for consumers who may need it right now.”

However, the Conservative Treasury spokesman Philip Hammond stated: “I think the government – now that the Bank of England has made this intervention to address the liquidity problem – will have to focus its attention on how to support the housing market.”

There are also concerns that whilst the government has pledged to help struggling homeowners not information was provided as to how this would be done.

A Liberal Democrat official said: “One of the possibilities being mooted…is that the taxpayer could have been tapped for additional money to provide additional benefits to people who are in mortgage arrears. We really need to find out exactly what has been happening in these talks so that the government isn’t making any more concessions at the expense of the taxpayer.”

Caroline Flint also stated: “Demand for housing from first-time buyers and young families is high and the fundamentals of the economy are sound. But we know that some prospective borrowers are facing difficulties at the moment because of the global supply of credit.”

Recent additions:

• Mortgages could continue to get more expensive
• Abbey takes huge slice of the mortgage market
• First annual fall since 90s for house prices
• Mortgage approval levels remain on a low
• Interest rate cut becomes more likely due to tighter lending conditions

How will government help struggling homeowners? is a post from: Glitec Loans