Charities slam help for vulnerable families as too little

Government measures announced today to help vulnerable households hit by the economic downturn are too small, homelessness charities have warned.

The criticisms from Shelter and Crisis came after communities secretary Hazel Blears said up to 6,000 families facing repossession would be spared homelessness through a new “mortgage rescue scheme”.

Under the £200m plan, housholds will be able to sell their house in full or part to a registered social landlord (RSL), and become either social tenants or shared owners; under a third option an RSL would offer families an equity loan to reduce their mortage payments.

Other measures include bringing forward £400m of funding social housing providers, including councils, to deliver 5,500 more homes over the next 18 months, and reforms to the system by which people on income support are helped with mortgage interest payments.

Under the £100m plan, claimants would receive the relief 13 weeks after making a claim, rather than 39 weeks as now. The government also said stamp duty would be scrapped for properties worth less than £175,000 – up from £125,000 – until September 2009, while it promised to invest £300m in equity loans to help up to 10,000 first-time buyers into home ownership.

Package ‘limited’

Shelter chief executive Adam Sampson said the package, though welcome, was “limited”, and was “dwarfed” by the scale of the housing crisis.

He said: “The package will not help enough of the estimated 45,000 households set to lose their homes this year, the hundreds of thousands priced out of the market and the 1.6 million households stuck on the council housing waiting lists.”

His criticisms were echoed by Crisis chief executive Leslie Morphy, who said: “Our primary concern is for those people who lose their homes. Many of them may expect the safety net of social housing, but the reality, particularly for those without children, is different. They will be left at grave risk of homelessness, joining the tens of thousands of people in this country who are already without a stable home.”

‘Excellent news’

However, the National Housing Federation, which represents RSLs, described the mortgage rescue plan as “excellent news”. Ruth Davison, the federation’s director of campaigns and neighbourhoods, said: “It will be fair, transparent and just – and help ensure that thousands of families will be spared the stress, trauma and misery of resposession.”

She also said it would undermine unregulated firms that offered housheholds short-term tenancies in return for buying their properties at a knockdown rate.

TUC general secretary Brendan Barber said today’s measures constituted “active government at its best”, targeting help effectively at those who needed it the most.

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