The Government has unveiled a new scheme aimed at helping people who suffer a temporary loss of income stay in their home.

The new Homeowner Mortgage Support Scheme will allow households that experience a significant and temporary loss of income as a result of the economic downturn to defer a proportion of the interest payments on their mortgage for up to two years. The Government will guarantee the deferred interests payments in return for banks' participation in the scheme.

The Government plans to work with lenders over the coming days to develop the scheme in detail, with a view to it being available to customers early in the New Year.

The eight largest banks in the country have pledged that they will work with the Government to implement the scheme.

Housing Minister Margaret Beckett said:
"This scheme will give households the breathing space to get back on their feet again and help ensure they do not face or fear repossession.”