Housing minister Grant Shapps has announced that there will be a cut in the grant rate paid to housing associations and tougher caps on property price and repair costs as part of a reduction in spending on the Mortgage Rescue Scheme.

The longer term role for the Mortgage Rescue Scheme will be considered through the Spending Review.

Eric Stoclet, managing director of Crown Mortgage Management, said: “Cutting back on the Mortgage Rescue Scheme is bad news for homeowners who get into financial difficulties. For many servicers