Struggling homeowners fund boost

Mr Maxwell said some people were struggling with finances

A scheme for cash-strapped homeowners is being boosted to �35m, the Scottish Government has announced.

The budget for the homeowners support fund will be boosted by �10m over two years, in response to the downturn.

Communities Minister Stewart Maxwell also announced details of a new shared equity scheme, to help those behind with mortgage payments.

It lets homeowners reduce their debt by allowing the government to take an equity stake in their homes.

The initiative will build on the existing mortgage-to-rent scheme, which allows people to sell their property to a social landlord and rent it back.

Mortgage arrears

The �35m pot will fund both schemes, which Mr Maxwell said would help about 600 families over the next two years.

"Due to the global credit crunch and the economic recession, many households in Scotland are finding it increasingly hard to manage their finances," he told parliament.

"Unemployment is rising and the number of households facing mortgage arrears is rising as a result."

Mr Maxwell also urged Westminster to do more to help struggling homeowners - attracting criticism from Labour MSPs.

The new shared equity scheme, coming into force on 16 March, requires homeowners to have at least 25% equity in their properties.

Independent financial advisers will assess each application and recommend what stake ministers should take.

Applicants must also get their lender to agree to the move and cannot apply until they are more than three months in arrears.

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