Mortgage scheme branded a failure

A flagship £200 million mortgage rescue scheme has failed to help a single family facing repossession anywhere in the region, the Government has admitted.

The initiative, announced last autumn, was intended to allow recession-hit homeowners to switch to become a housing association tenant at an affordable rent.

Alternatively, the association would buy a share in the threatened home — allowing some of the mortgage to be paid off — or provide a bridging loan to allow payments to be reduced.

But figures released to MPs have revealed that no-one has been helped in Rochdale or anywhere in Greater Manchester, since the scheme’s launch in January.

Across England, only one family has been rescued — in the East Midlands.

Sarah Teather, the Liberal Democrat housing spokeswoman, said the flop of the mortgage rescue scheme would come as a big blow to tens of thousands of families at risk of losing their home.

She added: “This is an appalling failure by a Government more interested in headline-grabbing than in helping families through the economic crisis.”

Tory spokesman Grant Shapps said the scheme was on course to help just eight families over its two-year life span — instead of the promised 6,000.

Ministers hoped the initiative would undermine private companies who offer to end mortgage misery by buying up homes at knockdown prices.

It was introduced against the backdrop of a predicted 75,000 home repossessions this year — very close to the peak of 75,500 reached in 1991, during the last recession.

A spokesman for the Department for Communities and Local Government insisted the scheme had enjoyed a “successful start” and hundreds of applications were being considered.