City helps pay mortgage arrears

The authority wants to prevent a sharp rise in mortgage arrears

A council in West Yorkshire has become one of the first in the UK to offer financial support to people struggling to pay mortgages and council tax bills.

Wakefield council will provide a limited number of interest-free loans of up to £15,000 to those worst-affected by the economic downturn.

The scheme is expected to run for three years and is only available to people who live in the Wakefield council area.

Some residents will also be allowed to cut their monthly council tax payments.

The local authority's council tax team is allowing those in difficulty to agree payments based on what they can currently afford.

The Council's Mortgage Assistance Scheme is only able to help a limited number of people most in need, supporting two or three loan applications each month.

We recognised early on this year it was going to be a very very difficult year Andy Wallhead, Wakefield council's corporate director for regeneration

Since its launch in April, 64 inquiries have been received and 11 successful applications made, with the average loan being just under £7,000.

Council leader Peter Box said: "The global economic situation is affecting all of us.

"As a council, we want to do all we can to ease the impact on citizens and on local business by being as flexible as possible and by working with people to understand any problems they might have in completing transactions with us.

"In some cases, the help we can offer may be limited, but we want to do as much as we can.

"The moves are part of the council's commitment to ease the burden on local people of the worldwide financial banking crisis and the credit crunch, which is expected to hit hard in the run-up to Christmas."

'Safety net'

Andy Wallhead, Wakefield council's corporate director for regeneration, said: "We recognised early on this year it was going to be a very very difficult year and, as it's turned out, possibly few years.

"We knew that if people were feeling vulnerable in their own households they would not be spending money in the local economy so we wanted to ease some of this pressure."

The council's mortgage assistance scheme was highlighted as an example of good practice in a report published last week by the Local Government Association (LGA).

An LGA spokesman said: "Local authorities are at the centre of helping people, businesses and other groups through tough economic times ahead.

"When things go wrong, councils step in, both to help kick-start the economy when it hits rock bottom and to provide a safety net for people in need.

"Wakefield council is offering people at risk of repossession interest free loans to make sure they can stay in their own homes; Lancashire County Council has identified over 500 people who weren't claiming benefits to which they were entitled; Leeds council is offering debt advice and counselling for local families."