Photo of Grant Shapps

Grant Shapps (The Minister for Housing; Welwyn Hatfield, Conservative)

I am today announcing £20 million funding for local housing authorities for preventing repossessions. Some £19 million is allocated for a Preventing Repossessions Fund and £1 million will contribute to Housing Court Possessions Duty Desks.

The £19 million Preventing Repossessions Fund provides additional options for local housing authorities to tackle repossessions in their area as part of their duties to prevent homelessness. This will be achieved by offering

small interest-free loans, or grants, to households at risk of repossession. Small loans can address immediate short-term financial difficulties, allow “breathing space”, and avoid households becoming homeless due to mortgage possession. This funding has been allocated to local authorities using weighted criteria which reflect demand and which reward homelessness preventions. All local housing authorities will receive funding.

£1 million is allocated to local housing authorities to fund Housing Court Possession Duty Desks within the 54 county courts in England that are not already funded by other sources, such as the Legal Services Commission. Court desks offer households free legal advice and representation on the day of a possession court hearing, regardless of an individual’s financial circumstances. This funding ensures universal access so that all households at risk of possession or eviction can access free legal advice when attending court.

Details of the amount awarded to each authority will be available on the Department’s website. A table giving the funds provided to individual authorities has been placed in the Library of the House.

A range of Government support is already in place to help homeowners at risk of repossession including Support for Mortgage Interest, a Department for Work and Pensions benefit to help out-of-work households meet their monthly interest payments (£386 million is forecast to be spent in 2011-12). The Government have invested £221 million over the next two years for the Mortgage Rescue Scheme, aimed at vulnerable homeowners at risk of repossession. This scheme has been improved to deliver better value for money for the taxpayer. The Government have also asked the Money Advice Service to establish a strategy for delivering free debt advice to empower consumers to take charge of their finances.

In addition, the Government’s ongoing efforts to tackle the record deficit will help avoid rapid increases in interest rates, which would put further pressure on already stretched family budgets. Interest payments for mortgages are currently the lowest as a proportion of total income since records began.

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