A mortgage rescue scheme designed to stop people having their homes taken from them through not being able to pay their mortgage has not hit targets according to a report.
The scheme, called the Mortgage Rescue Scheme, worked by enabling not-for-profit housing organisations to buy part or all of a home from the struggling mortgage payer, and allowed them to rent it back from them, meaning they didn’t lose the home.
According to the report from the National Audit Office (NAO) it did help 2,600 households, but fell well below the initial target of 6000.
The scheme also spent £35million more on the rescues than it should have, spending £240million.
Margaret Hodge, chair of the Public Accounts Committee said, “The scheme has helped fewer than half the number of households expected and each rescue has cost more than three times as much as expected, with overall costs sitting at £240m.”
“Spending £35m more than planned yet not reaching all those in need does not represent value for money for taxpayers’ investment in this scheme.”
The scheme was launched by Labour in 2008, in response to the growing number of repossessed homes, with the economic crisis only accentuating the numbers.
The department made assumptions about the level of demand for the Mortgage Rescue Scheme and made the wrong call,” said head of the National Audit Office, Amyas Morse.
“There was more need than expected for more expensive support and less for the relatively low-cost rescue option. Spending more than expected and delivering less means that the department has not provided value for money.”