A scheme to cut house repossessions by offering struggling homeowners a mortgage holiday of up to two years is only expected to help about 9,000 people, Margaret Beckett, the Housing Minister, said today.

That figure represents only a small fraction of the 75,000 home repossessions that the Council of Mortgage lenders is said to be expecting in 2009. Around 45,000 people are expected to be hit by repossession this year.

The mortgage scheme was announced yesterday by Gordon Brown, who pulled it like a rabbit from a hat during the Commons debate on the Queen's Speech. Although most of the the country's biggest lenders are officially on board, senior bankers complained that they had been given only a day's notice of the scheme and did not know how it would work.

The Treasury said yesterday that the Homeowner Mortgage Support Scheme would offer households which suffer a "significant and temporary loss of income" as a result of the recession the chance to defer a proportion of the interest payments on their mortgage for up to two years.

Those payments would be added to the mortgage debt to be paid back once the borrower's financial situation improves but the Government will have to pay the deferred interest in the event of defaults - making it liable for a bill of up to £1 billion.

But beyond that, the details have yet to be filled in.

Ms Beckett suggested last night that about 9,000 people were expected to use the scheme. Asked about that figure on BBC Radio 4's Today programme this morning, she added: “I think it’s genuinely quite hard to judge. It’s really on a case-to-case basis. That’s something that may emerge in greater detail as we go into the detail of just how the scheme will work with the different lenders.

“Sadly there will be some people who perhaps have second charges and so on which take them into a field where even the help we can give, substantial though it may be, won’t be enough to save them. We can’t guarantee everybody. But we are trying to help the hard-working person who wants to pay their mortgage, who isn’t trying to default but is really struggling.”

Eight lenders, accounting for 70 per cent of the UK mortgage market, have already agreed to be part of the scheme, including major players such as HBOS, Abbey and Nationwide. The initiative is aimed at people who temporarily lose some or all of their income, such as through redundancy or reduced hours, who may not qualify for other Government help. It will cover loans of up to £400,000 in value.

Announcing the move yesterday, the Prime Minister said: “Hard-working households that experience a redundancy or severe loss of income as a result of the downturn will be able to defer a proportion of their interest payments for up to two years as they get their family finances back on track.”

The Government plans to work with lenders over the coming days to develop the scheme in detail, with a view to it being up and running in the New Year. It builds on other Government initiatives to help prevent families losing their homes, such as the Mortgage Rescue Scheme under which people can sell some or all of their home to a social landlord and then rent it back.

The Department for Work and Pensions is also reforming Income Support for Mortgage Interest so that the benefit kicks in after just 13 weeks for eligible homeowners and covers interest payments on mortgages of up to £200,000.

The announcement received a broad welcome from consumer groups, industry bodies and lenders. Adam Sampson, chief executive of housing charity Shelter, said: “This is great news for many thousands of homeowners struggling to keep a roof over their head this Christmas, and the millions more who fear what might happen if they lose their jobs.”

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: “With the threat of repossession likely to rise significantly over the next year as unemployment rises, measures such as yesterday’s announcement to provide Government guarantees for mortgage interest payments are absolutely vital.

“By limiting the amount of distressed selling, it will also restrict the amount of new property flooding the market, which in turn will provide some measure of support.”

The Council of Mortgage Lenders gave the scheme a more cautious welcome, saying that it would need to be carefully worked out and properly targeted. The group, whose members are responsible for 98 per cent of the UK home loan market, said: “It is not a charter for ’won’t pay’ borrowers to avoid their responsibilities, but it will provide welcome reassurance to the vast majority of borrowers that the Government and lenders are doing all they can, in partnership, to help those customers who ’can’t pay’ due to a change in circumstances as we enter a recession.”

The initiative comes as it emerged the CML had told ministers the number of homes which are repossessed could soar to 75,000 next year. The CML said that it had not yet finalised its predictions for repossession numbers for 2009, adding that it was deliberately holding off doing so while new policy initiatives in the area were being announced.

Repossession levels are increasing in the face of the economic downturn and rising unemployment, with 11,300 people losing their homes in the third quarter of the year, 12 per cent more than in the previous three months.

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