Wednesday, 23 July 2014

Mortgage rescue funding remains unspent

A housing provider running the government’s mortgage rescue scheme has expressed concerns about the take up of the programme.

Radian said £115 million of the £221 million set aside from the scheme to help 2,500 struggling homeowners remains unallocated despite the financial pressures on households.

Under the mortgage rescue scheme, homeowners who are struggling to meet mortgage repayments can sell some or all of their home to a housing association, which then rents it back to them at an affordable level.

Radian has been allocated £30.6 million from the scheme for 2012-14 to cover 398 cases.

Lindsay Todd, chief executive at Radian, said: ‘When we introduced this scheme in May 2009, we quickly realised it was a service we needed to get involved with. We have now completed 505 rescues, which represents about 3 per cent of our stock, so it is a significant investment.’

The housing association recently held a seminar to discuss the delivery of the programme. It found housing associations are reluctant to get involved with the scheme because they do not consider it part of their remit, and are concerned about the financial risks.

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