Bid to beat repossessions

Thousands are threatened with repossession each year

A scheme aimed at helping Scottish home owners avoid having their property repossessed has been launched.

Housing Minister Margaret Curran unveiled the Scottish Executive initiative on Tuesday.

Under the £15m plan the owner of the threatened home would be able to sell their property to a housing association and rent it back.

Mortgage repossession is a personal tragedy for the individuals and families involved. But it also has a cost that goes far beyond people simply losing their homes

Housing Minister Margaret Curran

About 3,000 families every year are threatened with repossession in Scotland after getting into difficulty paying their mortgage.

Most of them manage to negotiate a settlement with their bank or building society or have to sell up and buy a smaller house.

It is believed that about 250 householders could be helped each year through the scheme.

Ms Curran said: "This will make a real difference to families who might lose their homes through mortgage debt.

"It will help struggling families remain in their own communities and reduce the disruption to family life and substantially reduce lenders' losses from cut-price sales of repossessed homes.

Reduce disruption

"But this is no soft option. Trading down to more affordable accommodation will be the first consideration.

"However, mortgage repossession is a personal tragedy for the individuals and families involved. But it also has a cost that goes far beyond people simply losing their homes."

The new mortgage-to-rent scheme will help those threatened with such a fate to remain in their own communities and reduce the disruption to family life.

Margaret Curran made the announcement

In such cases the housing agency Communities Scotland will step in to find a suitable housing association which will buy the house.

The home will then be rented back to the family at a rate they can afford.

Ms Curran says this will close the unacceptable gap between those who succeed and those who fall behind.

Nick Fletcher, Policy and Public Affairs Officer of the Chartered Institute of Housing welcoming the initiative saying it would "save on public costs".

And Gavin Corbett, head of campaigns for Shelter Scotland said: "Shelter Scotland supports the concept of the Mortgage to Rent scheme. Over the year the scheme could help prevent hundreds of people from losing their homes and becoming homeless."

David Chalmers, chairman of the Council of Mortgage Lenders (CML) Scotland, said his organisation was delighted to be helping the Scottish Executive scheme.