October 1st, 2016

Bailout fund of £500k to help pay mortgages

Bailout fund of £500k to help pay mortgages Bailout fund of £500k to help pay mortgages
Updated: 10:15 am, May 07, 2015

A BAILOUT fund of half a million pounds is being created to support people in Redditch at risk of losing their home.

Council bosses are proposing to continue to fund the Mortgage Rescue Scheme which allows the council to buy properties from those at risk of repossession and then rent it back to them.

The scheme was originally launched by the Government in 2009 and operated in Redditch through West Mercia Housing. But after running out of money the council was asked to help support the continuation of the scheme in October 2013, which they did by providing £271,592 which was matched by another £240,847 from the Homes and Communities Agency.

Although the Government cash is no longer available, officers are looking at funding the authority’s own scheme in 2015/16 as long as it is approved by councillors.

In total 25 borough residents were helped by the original scheme with another five avoiding homelessness as a result of the additional council funding, which finished in October last year.

Council officers estimate without action seven families a year would become homeless.

Council leader Bill Hartnett told the Standard it was crucial they continued to support families in times of hardship.

“We have got a waiting list running into a couple of thousand, we are in desperate need of social housing and if people do fall on hard times this is an ideal solution as it allows them to stay in a property they are used to being in, they can maintain the property where they are with their support network of schools, doctors and neighbours around them and just become tenants, so everybody wins.”

Another £500,000 will also be made available to officers to continue to buy up ex-council homes and other properties to add to the 6,000 plus houses they already own.

However council chiefs expect to lose 40 homes during 2015/16 to the Right to Buy Scheme which will generate £600,000 in income.

Existing council tenants will see their rent increase by 2.2 per cent from April, leading to a rise of between £67.68 a year for a bedsit and £143.52 a year for a seven bedroom house.

The council also plans to invest some £7.48million into upgrading and improving council owned properties.