Lib Dems seeking aid for homeowners

8:24am Tuesday 16th September 2008

Rapid action is needed to protect thousands of families from the threat of repossession, Liberal Democrat treasury spokesman Vince Cable warned.

The party is calling for a new code of practice for mortgage lenders to ensure a property is only repossessed as a last resort.

Mr Cable said the Government should not attempt to shore up the property market but should instead let prices fall to a "more affordable level".

Under a package of measures to be voted on at the party conference in Bournemouth, councils will be given the power to borrow against their assets to buy unsold properties to cut housing waiting lists.

The new code of practice for mortgage lenders will ensure all borrowers struggling to make payments will be offered free financial advice and a chance to renegotiate the terms of their loan.

People in arrears will also be given the opportunity to sell the equity in their home to a registered social landlord and become part-tenants of the property.

Mr Cable said: "After years of this Government's apathy, which allowed the housing market to boom hopelessly out of control, millions are now feeling the painful consequences of a market in freefall.

"With rising mortgage repayments and soaring food and fuel bills, many families are finding it impossible to make ends meet.

"Ministers should not try to turn back the tide of a housing market, which needs to fall to a more affordable level.

"Instead they should concern themselves with the many thousands in danger of being cast out on to the street."