UK councils needs to adopt mortgage support plans like the US

There have been a number of calls for local councils to do more to assist homeowners, who are struggling to keep up with their mortgage payments because of the current credit crunch. The report from The New Local Government Network’s (NLGN) ‘Good Housekeeping, have asked local councils in the UK to adopt the same mortgage support plans that the US use. The way this works is that councils borrow money, which they can then distribute to residents in their community to help them with their repayment difficulties.

The report also proposes that local councils could offer below market rate whole or partial mortgages. If a mortgage support plan was adopted in the hardest hit areas, then this could be vital in sustaining a local community. Anthony Brand from Prudential has said “The government should set £2bn of its £50bn intervention package aside for supporting these measures, and allowing the hardest hit councils to apply for funding.”

Although this is not a perfect solution to offer free handouts to people, it is a way of stopping a huge number of repossessions that could affect a community. You have to consider that mortgage defaults are now up 17 percent this year alone, this figure is set to top at least 100,000.

The problem is fuel, food as well as mortgage costs are increasing all the time, but wages are not increasing. There is now a shortfall in thousands of people’s households and something has to give, and we fear that this will people’s mortgage payments. We are now entering a critical stage in our economy, and the government will need to address this very soon.

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