Welsh Minister for Climate Change will today (Tuesday, November
7) announce the Help to Stay Wales mortgage support scheme, a new
funding package for Welsh homeowners having difficulty paying
their mortgage.
With rising interest rates, energy costs and cost-of-living
expenses, not being able to meet mortgage repayments is a reality
many homeowners are facing.
As part of the Co-operation Agreement between the Welsh
Government and Plaid Cymru, a commitment was made to explore
Local Authority Mortgages.
The Help to Stay Wales Scheme has been considered as part of
discussions about the mortgage market and how we can provide
targeted support.
During 2022-23 and 2023-24, the Welsh Government provided more
than £3.3billion of support to help people struggling with the
cost of living through targeted programmes which put money back
into people’s pockets.
As part of the budget agreement with Plaid Cymru for 2023-24,
£40m repayable capital funding has been made available over this
year and next year to bring forward schemes to provide flexible
financial support.
Help to Stay Wales will work alongside support offered by
mortgage providers through the UK Mortgage Charter for customers
who are struggling to afford their mortgage payments.
The Scheme will provide an option for homeowners who are at
serious risk of losing their home by offering a partial repayment
of an existing mortgage balance via a low-cost equity loan,
secured by a second charge (behind first charge lender), reducing
revised mortgage repayments to a level the applicant can afford.
The Scheme will be operated by the Development Bank of Wales and
will be interest free for the first five years.
The purpose of the Scheme is to reduce the number of homeowners
at risk of repossession and homelessness by offering them time to
resolve their underlying financial issues.
Minister for Climate Change, , said: “The current economic
climate presents many challenges for homeowners as they face the
significant rise in fuel costs, high inflation, escalating rent
and house prices with incomes often not keeping pace.
“The aim of the Help to Stay Wales Scheme is to help homeowners
to continue living in their precious homes.
“By widening our current mortgage rescue offer, we have the
opportunity to help more people at an earlier stage before they
face the awful threat of repossession.
“I would like to thank UK Finance and mortgage lenders who are
already supporting the Scheme, and I hope more lenders will be
able provide their support over the coming weeks.
“We will continue to do all we can with the powers we have to
help protect vulnerable households through this cost-of-living
crisis.”
Designated Member, Siân Gwenllian said: “The detailed work
undertaken through the Co-operation Agreement on the mortgage
market has led to the creation of Help to Stay Wales to support
people affected by soaring interest rates.
“By utilising the financial institutions and the powers we
currently have in Wales, we have been able to create a Made in
Wales solution which will provide direct support to those facing
the greatest difficulties.
“This new, targeted support will help more people at an earlier
stage, not just those threatened with repossession, meaning they
can stay in their homes and help them avoid the stress of not
being able to pay their mortgage.
“Despite having limited powers and resources in this area, our
hope is that the direct support being provided in Wales will
provide an additional safety net to mitigate some of the worse
effects of the unfairness of the conditions created in
Westminster.”
Chief Executive for Shelter Cymru, Ruth Power, said: “We’ve been
campaigning for more support for homeowners struggling with their
mortgage repayments, who are one of the many groups at risk of
homelessness and seeking support from Shelter Cymru.
“We welcome any initiatives that get upstream to prevent
homelessness and widen the safety net for households facing a
cost of housing and cost-of-living crisis. This scheme will offer
eligible households assistance from the early point of arrears
accruing, rather than waiting until they face the incredible
stress of repossession. We must now ensure that as many
households as possible have the option to use it to stay in their
homes, learning from people at risk of homelessness how best such
a scheme can help them.
“Anyone at immediate risk of losing their home can contact
Shelter Cymru’s helpline on 08000 495 495 for independent
advice.”
Mortgage Rescue, which has operated in Wales since 2008, is still
available and remains a valuable last resort, but requires people
to already be in possession proceedings to qualify for support.
Help to Stay Wales will extend this to include those facing
possession proceedings and/or financial hardship.
By acting now with increased investment, we can prevent many
individuals and families from entering possession proceedings and
becoming homeless, adding to the already stressed waiting lists
and high temporary accommodation costs for Local Authorities.
