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Rescue plans are a letdown

Homeloan experts are disappointed with the mortgage rescue measures in the Budget.

On Wednesday, the homeowner mortgage support scheme went live, with nationalised lenders Northern Rock and Bradford & Bingley signing up to the scheme, along with Lloyds Banking Group, RBS, Clydesdale, Yorkshire Bank and Cumberland.

The lenders will offer borrowers struggling to meet repayments the chance to defer 70 per cent of their mortgage interest payments for two years. But HSBC, Barclays, Santander and all other building societies will not offer the HMSS and other non-bank lenders have yet to commit.

In the Budget, the Chancellor Alistair Darling also extended the mortgage rescue scheme by £20m and for an additional six months. He also pledged another £80m to the shared-equity HomeBuy Direct scheme for first-time buyers looking to move onto the housing ladder with a part-owned new build property.

Darling also pledged to continue the stamp duty holiday for all properties under £175,000 until the end of the year.

Savills director Melanie Bien says: “These pledges are a bit of a disappointment; if you look at these figures in comparison to some of the other numbers bandied about in the Budget they’re very small in comparison.”

Council of Mortgage Lenders director general Michael Coogan adds: “The Chancellor had little room to make substantive interventions, so there are no real surprises in this list. The measures overall are unlikely to significantly improve prospects for higher market activity in the coming months.”

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