Earlier this month Treasury officials provided further details on the homeowner mortgage rescue plan that has been proposed to help homeowners that are struggling to make their monthly mortgage repayments due to a loss of income.

The plans were briefly touched upon by the Prime Minister, Gordon Brown, at the start of the month, but further details were provided by Treasury officials in the run up to Christmas.

Whilst government officials have said that the plan is designed to help those that lose some of their income and cannot cope with their current monthly mortgage repayments many industry officials have expressed concern that very few homeowners will actually benefit from the assistance because of the strict criteria that has been put into place for eligibility, and because of the fact that the programme is in fact voluntary for banks and building societies, which means that the lenders do not necessarily have to agree to the plan even if the borrower does meet the criteria.

In fact, some estimate that only around nine thousand homeowners are likely to benefit as a result of the programme, which aims to allow borrowers to defer interest repayments on the mortgage for up to two years if their income is reduced on a temporary basis.

One Treasury official said: “The new scheme will provide a bridge, giving homeowners who are experiencing financial problems sufficient time to find new employment or recover income, without the added concern and stress of potentially losing their home in the interim.”

However, an industry official said: “This scheme is virtually worthless and will benefit very, very few homeowners who may be struggling. The list of criteria that must be fulfilled before borrowers are even considered means that few will qualify and even fewer will actually be granted assistance due to the fact it is voluntary on behalf of the lenders, who have only signed up “in principle”.

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