Ministers are to hold talks with banks and building societies in an attempt to avoid a wave of house repossessions as buyers fall behind with their mortgage payments.
The Government wants the Council of Mortgage Lenders to encourage its members not to act too hastily when home-buyers run into financial difficulties and to encourage customers to inform them immediately of problems. "We want the practice of the best to be followed by the rest," said a government source.
Gordon Brown sought to calm growing pessimism about the economy yesterday by giving a lengthy BBC television interview in which he insisted that Britain was in a much better state than in the early 1990s and that the number of repossessions today was "a fraction" of what it was then. The Prime Minister said: "We've seen house prices rise by about 180 per cent over the last 10 years and they have risen by about 18 per cent over the last three years, so a 2.5 per cent fall is something that is containable."
Mr Brown announced an expansion of the Open Market HomeBuy scheme under which first-time buyers will be offered up to £1,500 to help them with anything from fees to furniture. Buyers who take out a "shared equity" loan and key workers can boost their purchasing power by up to 50 per cent. A household with an income of £32,000 could afford a house of £200,000, paying £760 a month – as opposed to £1,350.Reuse content