The government has brought in several new schemes to help those struggling with mortgage repayments.

The latest one, starting on 21 April 2009, allows some home owners who suffer a sharp drop in income to defer up to 70% of their mortgage interest payments, for up to two years.

The Homeowners Mortgage Support Scheme (HMSS) is being supported mainly by lenders in which the government has a big or controlling stake.  But most of the other lenders say they will follow this lead anyway with their own borrowers who are in trouble.

People made redundant or who face a significant loss of income will be allowed to defer a proportion of interest payments for up to two years.

They will still have to pay back that money eventually, though.  This could help families with one earner who has become redundant, a homeowner who has suffered a significant loss of overtime, or people who have had to take a lower-paid job.  The main limit is a mortgage no larger than £400,000, and savings of no more than £16,000.

The deferred payments will be added on to repayments for the rest of the term, ideally when people are able to find a new job.  The Treasury will underwrite the extra risk taken by lenders.  That means if someone eventually defaults, the government will pay the lender 80% of the missed interest payments.

This plan is in addition to the two other main schemes.  One gives more more income support than before to unemployed homeowners with mortgage interest payments to pay.

And the other, called a mortgage rescue scheme, lets some homeowners who are threatened with repossession be converted into housing association tenants, while staying in their homes.

The last month has seen the first real encouraging data on the housing market for quite some time, says a report from the centre for economics and business research (cebr).

Both the Halifax and Nationwide price indices have recently seen their first monthly rises since the end of 2007, and mortgage approvals rose to 37,000 in February.

According to the cebr, if mortgage approvals rise to between 60-70,000 per month, this could be enough to offset the impact of “meagre wage settlements and rapidly rising unemployment that will continue to unfold over the course of the year”.

This, they say, could lead to house prices bottoming out by the third quarter of the year.

However, the cebr also say that a more likely scenario is that mortgage approvals will only reach around 50,000 per month by late summer.

Even in these circumstances, though, the cebr’s forecasting models suggest that prices will only fall by a further eight to ten per cent, and are likely to bottom out by the start of 2010.