Policy Option:
Introduce a mortgage rescue scheme
Introduce a mortgage rescue scheme
Description:
Introduction of a mortgage rescue scheme targeted at the most vulnerable households.
Introduction of a mortgage rescue scheme targeted at the most vulnerable households.
| Cost of Implementation | |||
|---|---|---|---|
| One-off (transition): | Yrs: | Average Annual Cost: | Total Cost (PV): |
| £100m – 200m | £2 | £- | £100m - 200m |
Description and scale of key monetised costs by 'main affected groups':
Estimated initial outlay of £200m from central Government if 6,000 households
are assisted over two years. The overall “upfront cost” of the scheme will be
greater than this as Registered Social Landlords will be funding some of the cost
of the scheme from borrowing, reserves and capital receipts (as they currently do
with Low Cost Home Ownership (LCHO) and Social Rented development).
With a 50 per cent reduction in uptake, up front costs to central Government would reduce to £100m.
Estimated initial outlay of £200m from central Government if 6,000 households
are assisted over two years. The overall “upfront cost” of the scheme will be
greater than this as Registered Social Landlords will be funding some of the cost
of the scheme from borrowing, reserves and capital receipts (as they currently do
with Low Cost Home Ownership (LCHO) and Social Rented development).
With a 50 per cent reduction in uptake, up front costs to central Government would reduce to £100m.
Other key non-monetised costs by 'main affected groups':
Administrative costs of delivery to Local Authorities and Registered Social
Landlords (RSLs) – though these costs are expected to be small given
that 1) LAs already have a legal duty to assess households’ eligibility for
the main homelessness duty; and 2) many RSLs already purchase new/
existing dwellings partly using Social Housing Grant (SHG) as part of their development programme.
Administrative costs of delivery to Local Authorities and Registered Social
Landlords (RSLs) – though these costs are expected to be small given
that 1) LAs already have a legal duty to assess households’ eligibility for
the main homelessness duty; and 2) many RSLs already purchase new/
existing dwellings partly using Social Housing Grant (SHG) as part of their development programme.
| Benefits of Implementation | |||
|---|---|---|---|
| One-off (transition): | Yrs: | Average Annual Benefit: | Total Benefit (PV): |
| £0 | £- | £- | £195m-390m |
Description and scale of key monetised benefits by 'main affected groups':
Savings to the exchequer from reduced number of repossessions, Temporary
Accomodation (especially in high demand areas) and Housing Benefit (HB).
Also, income to RSLs from rent and assumed future staircasing up of rescued households.
Savings to the exchequer from reduced number of repossessions, Temporary
Accomodation (especially in high demand areas) and Housing Benefit (HB).
Also, income to RSLs from rent and assumed future staircasing up of rescued households.
Other key non-monetised benefits by 'main affected groups':
The scheme will protect vulnerable households from the outcomes that can follow repossession, for example poor health, worklessness and disrutption to education.
The scheme will protect vulnerable households from the outcomes that can follow repossession, for example poor health, worklessness and disrutption to education.
Key Assumptions/Sensitivities/Risks:
For the purposes of estimating cost and benefits of the scheme, we have assumed that the scheme is effectively targeted at those households that would have otherwise entered the social sector. The top end of the ranges of costs and benefits presented above assumed 100 per cent uptake by households at risk of becoming homeless. The bottom end of each range assumes 50 per cent of this uptake is realised.
Other key modelling assumptions are on:
• house price inflation
• what percentage of eligib
For the purposes of estimating cost and benefits of the scheme, we have assumed that the scheme is effectively targeted at those households that would have otherwise entered the social sector. The top end of the ranges of costs and benefits presented above assumed 100 per cent uptake by households at risk of becoming homeless. The bottom end of each range assumes 50 per cent of this uptake is realised.
Other key modelling assumptions are on:
• house price inflation
• what percentage of eligib
| Price Base Year: | Time Period Years: | Net Benefit Range: | Net Benefit: |
|---|---|---|---|
| 2008 | 20 | 95m-190m (exchequer only) | £140m (exchequer only) |
What is the geographical coverage of the policy/option:
England
England
On what date will the policy be implemented:
To be agreed
To be agreed
Which organisation(s) will enforce the policy:
To be agreed
To be agreed
What is the total annual cost of enforcement for these organisations:
£N/A
£N/A
Does enforcement comply with Hampton principles:
Yes
Yes
Will implementation go beyond minimum EU requirements:
N/a
N/a
What is the value of the proposed offsetting measure per year:
£N/A
£N/A
What is the value of changes in greenhouse gas emissions:
£N/A
£N/A
Will the proposal have a significant impact on competition:
No
No
| Annual cost (£-£) per organisation | |||
|---|---|---|---|
| Micro: | Small: | Medium: | Large: |
| £- | £- | £- | £- |
| Not Exempt | Not Exempt | Not Exempt | Not Exempt |
| Impact on Admin Burdens Baseline (2005 prices) | ||
|---|---|---|
| Increase of: | Decrease of: | Net Impact: |
| £- | £- | £- |
