Housing Minister John Healey has welcomed the extension of support to 220,000 struggling homeowners announced by the Chancellor yesterday.

They will now continue to receive much needed help with their mortgage interest payments and help them stay in their homes.

Mr Healey also published new figures that show lenders are going that extra mile to ensure repossession is always a last resort and, thanks to backstop schemes supported by government or put in place by lenders themselves, thousands of families are receiving crucial help to make their monthly mortgage payment affordable until their income recovers.

135,000 families now have formal repayment agreements on a flexible basis, 74% more than a year ago. Figures show that 6,000 of these are on terms equivalent to the Homeowners Mortgage Support (HMS) scheme standard and only 15 have so far needed the formal backstop of the HMS scheme.

The Pre Budget Report also confirmed that the government's comprehensive package of support for people struggling with their mortgages have helped over 330,000 families so far during the recession. This includes tighter rules so repossession is always a last resort, tougher tests for lenders in court so they must prove they have exhausted every possible option before taking repossession action, £130m for debt and advice services and the targeted schemes such as Mortgage Rescue and HMS.

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Last month, the Council of Mortgage Lenders (CML) said that because of government action and extra forbearance by lenders they revised down their forecast on the number of repossessions this year from 65,000 to 48,000.

Mr Healey said: "This announcement by the Chancellor to extend payment cover for mortgage interest when people lose their jobs and are struggling with their finances will be a welcome boost to 220,000 families. It will give them peace of mind over Christmas and through the New Year that government support will continue to help them stay in their homes.

"Fortunately, only 15 families have needed to use the government's formal backstop scheme. But by establishing this scheme we have set the standard in the industry with 6,000 families benefiting from equivalent flexible payment agreements. It is playing a vital role in making sure lenders are being more patient with their customers, offering more flexible arrangements and only using repossession as a last resort.

"Government's comprehensive package of support for struggling homeowners has helped over 330,000 families so far during the recession. Both lenders and money advisers have said this is making a real difference. Whether through the extra government funded free advisors or the backstop support schemes homeowners are seeking advice at an early stage that in many cases can make all the difference.

"Although repossessions and arrears are currently running at half the rate of the early 1990s the risk of repossession will stay high throughout next year. That's why I have said I will step up government efforts so families struggling with their mortgages have access to the practical, impartial help and advice they need to take control of their finances."

(CD/KMcA)