Gordon Brown has announced the Homeowners Mortgage Support Scheme which will provide real help to hard-working people worried about losing their homes as a result of the downturn.

The new scheme will enable households that experience a significant and temporary loss of income as a result of the economic downturn to defer a proportion of the interest payments on their mortgage for up to two years. The Government will guarantee the deferred interests payments in return for banks’ participation in the scheme.

The Labour Government will work with lenders over the coming days to develop the Homeowners Mortgage Support Scheme in detail, with a view to it being available to customers early in the New Year. The country’s eight largest banks have already pledged that they will work with the Government to develop it.

By providing this kind of real help now, the Labour Government are able to support hard working families, ensure that the recession is as short as possible and make sure that Britain emerges from the current downturn stronger and fairer.

The Homeowners Mortgage Support Scheme is expected to help significant numbers of households avoid the risk of repossession over the next 2 years. It comes in addition to help already available through Support for Mortgage Interest for home owners who find themselves suddenly unemployed and through Mortgage Rescue for vulnerable households.

Labour’s Chancellor, Alistair Darling, said:

“This is real help for homeowners at risk of repossession through no fault of their own. The scheme will give people who face a temporary fall in their income the confidence that they need to rearrange their finances so they can come through a difficult period without losing their home.”

Labour’s Housing Minister, Margaret Beckett, said:

“We are determined to do everything possible to ensure that hard working households have the option to stay in their homes, if they suffer a loss of income during the downturn. This scheme will give households the breathing space to get back on their feet again and help ensure they do not face or fear repossession. It shares the risk of home ownership at this difficult time across all the partners - the Government, the lenders and the borrowers. We want to see all lenders signing up to this scheme as part of their efforts to ensure that repossession is always an absolute last resort.”