One £285m mortgage rescue scheme. One family helped

• The Guardian, Friday 1 May 2009

It was announced with much fanfare in September at the height of the banking crisis - the government's big idea to stop vulnerable people being thrown out of their homes. But yesterday it emerged that the mortgage protection scheme has so far helped just one family across the whole of the UK.

The scheme, part of a package of emergency measures rushed in last autumn after months of tumbling house prices, has been "operational across the country" since January, according to the local government department; yet data published on its website yesterday showed that just one homeowner, in the east of England, has qualified.

The shadow housing spokesman, Grant Schapps, seized on the figures, saying they revealed the rescue scheme, which was expected to cost £285m and help 6,000 families over the next two years, to be a sham. "Thousands of families have looked to Gordon Brown for help to survive his recession and he's looked the other way. He got us into this mess and he needs to help ordinary families through it," he said.

A government spokesman said local councils were now actively considering applications for the scheme from more than 450 other families, and insisted it had always expected it to take three months to get off the ground.

Under the scheme, homeowners struggling with their repayments should be able to sell a share of their property - or all of it - to a social landlord and rent it back, enabling them to stay in their home instead of facing repossession.

With the Council of Mortgage Lenders predicting as many as 75,000 repossessions in 2009, Alistair Darling made a series of changes to the scheme in the budget. They will come into effect next month and should increase the number of homeowners who could qualify.

The government is keen to nurse the housing market back to health and give voters back the feelgood factor. The chancellor also extended the stamp duty holiday for buyers of properties worth £175,000 or less and he is encouraging the nationalised lender Northern Rock to expand its mortgage book, helping to boost loans to first-time buyers.

But yesterday brought fresh evidence that there is little sign of a let-up in the housing downturn. Data from the Nationwide showed that prices slipped back by 0.4% in April, wiping out some of the surprise 0.9% gain in March, which was viewed at the time as evidence of a spring bounce. The renewed decline brought the average cost of a home in the UK down to £151,861 - 15% lower than in April last year.

Ed Stansfield, property economist at Capital Economics, said: "Rising unemployment and widespread pay freezes will mean that prices fall considerably further."