Homeowner help warning

21 July 2010

man and woman

Shelter has welcomed the Government’s extension of schemes to support struggling homeowners until the end of 2010, but has warned that funding must be protected longer-term to avoid a ‘huge surge’ in homelessness.

Shelter chief executive Campbell Robb said: ‘We are very pleased to see that the new Government has recognised the importance of the current Homeowner Mortgage Support (HMS) and Mortgage Rescue Scheme (MRS) and have committed to continue funding for them until the end of the year.

‘However, the ongoing economic crisis could still seriously threaten the fragile mortgage market and push more and more people into arrears in the coming months and years. That’s why it is absolutely vital the government does not weaken the safety nets for struggling homeowners further, or we could see a huge surge in homelessness.’

This week in a joint letter, advice charities including Shelter and Money Advice Trust will urge Housing Minister Grant Shapps to protect funding for vital debt advice in the upcoming Comprehensive Spending Review.

Shelter research shows that free legal advice at court helps eight out of ten struggling homeowners avoid repossession. Debt advice also brings huge savings to the public purse: the average debt advice case costs £229 rather than the £16,000 it costs the Exchequer every time a household is repossessed.

Mr Robb continued: 'It is also crucial that Support for Mortgage Interest, which is currently helping 220,000 struggling homeowners keep their head above water, must be maintained, or thousands more homeowners will be at risk.’

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