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UK govt announces £20 million for safety net against residential property repossession

The Preventing Repossessions Fund gives councils the opportunity to offer small interest free loans to struggling home owners and ensure that court desks can offer on the day advice for those facing the prospect of repossession.

Shapps urged anyone facing financial difficulty to use the range of free and independent advice available to get help and avoid losing their home.

The new funding includes £1million to ensure that free, on the day, legal advice is on hand in every county court for home owners at risk of repossession. Shapps said that the cash will 'plug the gaps' in the Housing Possession Court Duty Scheme ensuring that all courts are able to offer a viable service, where it is not already provided by the Legal Services Commission or independently.

In many cases applications for possession orders are rejected or suspended when a householder has access on the day legal advice. Last year over 30,000 households benefited from the court duty desks.

Shapps also gave a £19million cash injection to councils, so they can ensure that local people have access to real financial support to help allay the threat of losing their homes.

The Preventing Repossession Fund, which is being allocated to every local housing authority in England, enables them to offer struggling home owners small interest free loans of less than £5,000 or grants to help ease debt pressures and give them the breathing space to get back top of their finances.

‘Repossession should only ever be the last resort. No one in financial difficulty should be embarrassed to seek help if they need it. This cash ensures that no matter where you are in the country the advice and the financial support is on hand to help people get on top of their finances and keep them in their hard earned homes,’ said Shapps.

‘Getting advice early is important but even for people facing a court hearing repossession is not a foregone conclusion. By extending the reach of the Court Desk scheme we are ensuring that no one is left stranded without the support of the free on the day legal advice that has already saved thousands of families from repossession,’ he explained.

The announcement comes as the latest figures from the Council of Mortgage Lenders show the number of homes taken into possession in 2011 to be 36,200, lower than the 40,000 originally forecast and the lowest since 2007.

Shapps added that tackling the deficit to help ensure that home owners don't face rapid increases in interest rates is a top priority for government and interest payments for mortgages are currently the lowest as a proportion of total income since records began.

The government is also investing more than £200 million into the Mortgage Rescue Scheme. The scheme, available through local authorities, is designed to offer a last resort to the most vulnerable families to avoid repossession.