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By Ian Dipple Thursday 17 October 2013 Updated: 18/10 07:46
THE COUNCIL has agreed to step in and rescue homeowners at risk of being repossessed.
Redditch Borough Council is to become part of the Government’s Mortgage Rescue Scheme introduced in 2009 during the global economic crisis.
A total of £400,000 has been allocated to the scheme which allows registered social landlords, of which the council is one, to buy the homes of those struggling to make their mortgage repayments at 90 per cent of the market value.
The resident then remains in the property paying rent at 20 per cent less than the market rate for the area. There is also the option to provide an interest only loan to help pay off part of the mortgage and reduce payments to an affordable level but this is open to only those with no more than 40 per cent equity in their property.
The council will receive up to 47 per cent of the cost of the purchase from the Homes and Communities Agency as well as the same amount for upgrading the property to Decent Homes Standard. Any properties bought would become part of the council’s existing housing stock.
A total of 25 borough residents have already been helped by the scheme over the last four years through West Mercia Housing. But the group has now exhausted its funding prompting the request to the council to step in and help.
At least three households are already known to be at risk and eligible for the scheme while officers say without action at least seven people a year could become homeless and become the council’s responsibility to house.
People can apply through the council and are only eligible after all other options have been exhausted.
Government funding for the scheme runs out in 2014 and officers say they are exploring creating the council’s own mortgage rescue package after that.
Councillors approved the move at an executive committee meeting on Tuesday (October 15).
Council leader Bill Hartnett said: “We know there are already cases in the borough and if we don’t do this they may have other things happening to them. I think it’s an excellent plan we are trying to do and stop people becoming homeless.”
Coun John Fisher added: “A few weeks ago I spoke to a retired person who was at the sharp end of this issue and they are facing within the next six months some sort of process to result in eviction.
“They would then be left homeless and our responsibility to house and it would be a tragedy for that person. This gives some light at the end of the tunnel.”
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