Government mortgage plans ‘will only benefit limited numbers’

Only a small number of those struggling to meet their mortgage payments will be helped by the government’s latest measures to help households struggling with debt management, the Homeowners Advice Centre has stated.

According to Chris Jenkins, co-owner of the debt advice provider, the scheme could leave some people with a “substantial shortfall” between their payments and any benefits they receive.

“The new scheme only helps households with no income at all,” he explained, adding that couples with one partner still working will not be eligible for any support from the government, even if they are only earning a small amount.

He added that as the new scheme assumes mortgage interest payments are at 6.08 per cent, sub-prime borrowers paying up to ten per cent are likely to still face financial problems even if they do receive aid.

According to the Council of Mortgage Lenders, there were 11.69 million outstanding mortgages in the UK during the third quarter of 2008, a decrease from the 11.74 million recorded during the previous three months.

By Tom Musk