Governments’ recent proposal to assist Homeowners in avoiding repossession by the Banks will not extend to Buy to Let mortgages.
PM Gordon Brown, announced the ‘Homeowner Mortgage Support Scheme’ last week, which is aimed at supporting households that suffer a “significant and temporary loss of income" caused by the current economic recession.
The Treasury announced yesterday that the scheme would not be open to Buy to Let mortgages amongst other qualification criteria. Households with mortgages over £400,000 would not benefit from the scheme which leaves around an estimated 10 million borrowers. Take away, the estimated 1.7 million of those borrowers who have a buy to let mortgage or a second charge against their home, less any homeowner that has more than £16,000 in savings and, you must already be in arrears on your mortgage payments and you are left with around 10,000 households who are likely to qualify for the scheme.
In order to qualify for the scheme, homeowners would be required to speak to a debt advisor such as Citizens Advice Bureau or the National Debtline before before they entered discussions with their Lender. The final decision to grant the relief would fall ultimately in the hands of the Banks and considering that HBOS, Abbey and HSBC had not offered concrete assurances that they would sign up to the scheme, it will take a little more pressure from Government for Banks to show willingness.
The Council for Mortgage Lenders estimate that there will be near 200,000 households who are more than 3 months in mortgage arrears by the end of 2009 and that repossessions could top 75,000 next year.
Jonathan Daines (Jonathan@LettingaProperty.com) is Co - Director of http://www.LettingaProperty.com , a property search portal and information guide dedicated to the letting Industry. Advertising Letting Agents and Private Landlords’ Properties to Let to thousands of Tenants every day. Visit http://www.LettingaProperty.com - and start your property search.