A £285m mortgage rescue scheme has got off to a slow start, with only two households benefitting during its first four months, figures show.

Around 1,084 households in financial difficulty approached local authorities for help with their mortgages in April alone, according to government data. However, only one contract was signed in March and a second in April.

The government said that one reason for the delay was the long processing time of three to five months for each case. The figures show that other claims are due to be dealt with shortly.

The government initiative allows housing associations to buy properties from homeowners struggling to pay their mortgage, and let them continue living there as tenants by charging “affordable rent”. The scheme could help up to 6,000 struggling homeowners weather the recession, ministers said.

Of the 1,084 households who approached local authorities in April, only 452 were eligible to join the scheme. To qualify, applicants must be at risk of repossession and be elderly, disabled, pregnant or have dependent children. Out of the 452 households eligible for the scheme, only 249 applied in April. 376 applications in total are now under consideration.

The low number of applications has sparked debate as to the effectiveness of the scheme.

“This is yet further proof that the Mortgage Rescue Scheme is failing,” said shadow housing minister Grant Shapps.

“Ministers promised that it would offer ‘real help now’ to homeowners living with the threat of repossession. Gordon Brown should now try telling that to the thousands of families being frozen out of this scheme and losing their homes as a result.”

However, housing minister Margaret Beckett defended the scheme, arguing that it was already having a positive impact on vulnerable homeowners who face repossession.

“We expect many more householders to be helped in the coming months,” she added.

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