Prime Minister Gordon Brown announced in the Queen’s speech that his government is introducing plans to help borrowers struggling to keep up with mortgage payments. The plans are aimed at middle-income borrowers and it is hoped that they will stem the rising tide of repossessions that is hitting the country. Through September there had been more than 30,000 homes repossessed in the country, which is more than all of last year (2007). The number is expected to rise even more in 2009.
Households that have lost some or part of their income will be able to defer mortgage interest payments for up to two years, according to the prime minister’s announcement. Borrowers will have to work with their lender to arrange the payment break and the unpaid interest will be added to the outstanding mortgage. If, after the break period, homeowners are still unable to repay the loan, the government plans to cover the missing payments. Specifics of the plans are still to be worked out.
Gordon Brown said in his speech that “The result will be more affordable monthly payments for homeowners who are needing a bridge through difficult times.” He also noted that eight lenders had so far signed to participate, including HBOS, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays and HSBC. Between them they represent around 70% of the mortgage market.
Useful Resources
