Housing Minister Grant Shapps has announced a new £20 million safety net to help ensure that mortgage repossession remains the last resort for struggling homeowners.

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

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

Today's new funding includes £1million to ensure that free, on-the-day, legal advice is on hand in every county court for homeowners at risk of repossession. This much needed legal assistance is available at court to any individual facing homelessness and today's 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.

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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.

Mr Shapps also gave a £19 million 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 homeowners 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.

Having the right advice and support on managing debts is crucial in helping homeowners to regain control of their debt. Alongside financial support those at risk of repossession should be given the knowledge and help to manage their finances in the future.

Local authorities are encouraged to work innovatively and flexibly with other local authorities, lenders and homeowners to ensure that the Preventing Repossession Fund is sustainable and tackles repossession in the best way for their area.

Mr Shapps said: "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."

(CD/GK)