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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

4 Dec 2008

Mortgage safety net announced

Gordon Brown used the Queens speech to launch a new scheme aimed at helping those who will face unemployment in the coming recession. A government-sponsored mortgage-payment break enables families to stave off repossession for up to 2 years by deferring payments. the only limit is that your mortgage is less than £400,000 which will cover 90% of the population.
This, after news that 75,000 homes could be repossessed next year in the UK, that's 30,000 more than expected figures for this year.

The details will be worked out between individuals and their banks, but the scheme is only a deferral of payments to a later date, so there will hopefully be little chance to exploit the scheme for personal gain, though no doubt some will try!
The announcement came out of the blue, so some of the finer detail is as yet unclear, but eight major banks have signed up to the new Homeowner Mortgage Support Scheme.

As far as I can see, this is the first real policy of substance that will really help individual families to come forth from number 10 Downing Street since the start of the crisis. Never mind tiny tax windfalls and 2% off VAT, this looks to me to be a real policy which will have far-reaching positive effects.

I can't help wondering though, if it means that we should stop paying mortgage protection insurance?
Surely the insurance companies are not going to be delighted to learn that the Government is going to arrange for the underwriting of 90% of UK mortgages...

Related posts:
Government Intervention
CBI predicts 'shallow' recession
25% house price drop expected
Fanny&Freddie are nationalised

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