Troubled homeowners ‘will see benefits’ of government mortgage scheme

Homeowners worst affected by the financial crisis will begin to see the benefits of government-introduced measures during 2009, it has been predicted.

According to the Homeowners Advice Centre, Labour’s initiative – which includes providing financial support to those struggling to pay their mortgages – will begin to become effective over the coming months.

However, co-owner of the advisory body Chris Jenkins warned that repossessions may still rise in 2009.

“Many homeowners who were given a stay of execution from repossession in the form of a payment plan towards the end of 2008 could well default,” he explained.

Should such a situation occur, there may be an increase in the number of homeowners entering Individual Voluntary Arrangements (IVAs) or declaring themselves to be bankrupt.

The Council of Mortgage Lenders recently revealed that there were 11.69 million outstanding mortgages in the UK during the third quarter of 2008, compared to 11.74 million in the previous three months.

By Tom Musk