Sep
3
03/09/2008
Homeowners struggling to pay their mortgages should be able to sell part of the equity in their homes to avoid repossession, the Liberal Democrats have said.
James Kirkup, Political Correspondent, The Guardian
The equity sale scheme is part of a package of measures drawn up by Vince Cable, the party's Treasury spokesman, to meet what he says is the urgent need to avoid thousands of families losing their homes.
A slowing economy and rising mortgage costs are putting growing pressure on millions of homeowners.
Figures earlier this month showed that the number of repossession orders made by courts in the second quarter of 2008 jumped by 24 per cent. A total of 28,658 orders were made in England and Wales between April and June.
Mortgage-holders struggling with their repayments should be able to sell all or part of the equity in their house and rent it back from housing associations or even private companies, Dr Cable has proposed.
The Liberal Democrats also say that courts should be given new guidance to ensure that they only order homes to be repossessed "in extreme circumstances".
Councils and housing associations should also be allowed to borrow money from commercial lenders and use it to buy land and empty homes for use as social housing.
Dr Cable outlined his plans as ministers complete their own economic assistance package, expected to be published as early as next week.
The Treasury is known to be considering a stamp duty "holiday" in the hope of stimulating the housing market.
Dr Cable said that showed ministers are missing the point.
He said: "The Government seems obsessed with fighting a losing battle to artificially prop up the housing market, rather than finding ways to deal with its worst effects.
"Ministers must act to help the thousands of families struggling to keep a roof over their heads.