And what is promised for housing?
According to this DCLG press release, the following (with my comments in brackets):
* Agreement with major lenders to wait at least three months before initiating repossession proceedings, in order to explore all other alternatives. The Government has also welcomed the commitment by lenders to look at all possible options to prevent repossession, such as reducing payments and mortgage rescue schemes.
(My impression is that most of the major lenders already waited 3 months or so. it is the sub-prime brigade packing out the Courts. As with the protocol, no form of penalty or means of enforcement.)
* Bringing forward the Government’s £200 million Mortgage Rescue scheme to start early in a number of local authority areas. More than 60 councils throughout England will be ‘fast tracking’ the set up of the Mortgage Rescue scheme and will start taking applications from the beginning of December. The scheme will help up to 6,000 of the most vulnerable households avoid the trauma of repossession over the next two years.
* Enhancing the Mortgage Rescue scheme to cover vulnerable families at risk of repossession because of additional loans secured on their home. Often families are more likely to default on these loans because of higher interest rates.
(The details of the Mortgage Rescue are here. Note it is only £200 million, will not help those in negative equity and is set to help ‘6000 homeowners’ who meet the eligibility criteria. In any case what does ‘start early’ mean? When? No dates anywhere.)
* Announcing a further £15.85 million to extend free debt advice to be made available to all consumers across the country.
(Hang on. Debt advice, which we have previously been told was available to all and adequately funded, suddenly gets an extra £16 million? Looks like a confession of substantial underfunding to date to me. And see this downright odd press release from the LSC, which suggests that there is no new money, just a re-allocation of existing funds. Thanks Housed.)
* Increasing the support available for those eligible households paying the interest on their mortgages. Under new changes to the Support for Mortgage Interest scheme, the capital limit on which eligibility for assistance is calculated will be doubled to £200,000 and the standard interest rate for this support will be frozen at the current rate of 6.08 per cent – ensuring those with higher value loans and on fixed rate mortgages don’t miss out.
(Helpful up to a point. But the introduction of the new 13 week limit, rather than 36 weeks, has not been brought forward from January 2009, apparently.)
* New action on second charge lending. The Office of Fair Trading will bring forward new sector guidance early next year to help ensure borrowers are treated sympathetically and second charge lenders do everything possible to avoid repossessions.
(Guidance? I chortle. In what way is this ‘Action’? And this in the main territory of the sub-prime or non-mortgage lender. No enforcement and no binding requirements make this of little use.)
So there we are. A mix of some genuinely helpful elements, catch-up funding for services that have been underfunded for years and pure ‘sounds good’ guidance. It will make a difference for a proportion of those in trouble with their mortgages, although probably a small proportion. But I wish that the issuing of toothless guidance would not be announced as ‘action’. It really isn’t going to persuade anyone.