The Scottish government has pledged £35 million of public money to two new schemes designed to help people struggling with their mortgage payments. Anyone facing repossession through unpaid arrears on their mortgage will have the option of entering into a shared ownership arrangement with their housing association. The government is also extending the ‘mortgage to rent’ scheme.
Alex Neil, the Housing Minister, has stated that £35 million will be set aside for the two schemes in a bid to help families remain in their homes. Previously just £25 had been allocated by the government for the two schemes, but as the property market has slumped further and the UK is now officially in recession, a further £10 million is to be put into the schemes.
In the shared equity scheme, anyone facing repossession can allow the government to take a stake in their property. The level of the stake will be decided upon by independent financial advisers. The homeowner must retain a minimum of 25% of the value of their home though.
Alex Neil stated:
It’s important that those facing the risk of repossession seek urgent independent money advice.
It may be possible, for example, to try and reach agreement with any secured lender before considering other forms of support.
Only then can they make an informed decision about whether the support fund is an option that suits their needs.
Shelter Scotland, a charity that helps the homeless, and people facing repossession, welcomed the move by the Scottish government.
Shelter Scotland ‘s Graeme Brown stated:
People need to be told about these new rights and where they can access impartial support and advice about them.
At a time when repossessions are on the rise, we need to make sure all advice providers are telling people about these schemes and the Scottish Government and local authorities are doing as much as possible to promote them.