People facing repossession in the UK will be able to defer part of their mortgage interest payments for up to two years under plans unveiled by Gordon Brown.

The plan is designed to give those who lose their jobs or take a big cut in their income an extended breathing space before their home is at risk. The scheme will cover mortgages worth up to £400,000. UK Average House Prices are between £200k to £300k.

Mr Brown made the announcement during a House of Commons debate on the Queen’s Speech, which took place earlier.

The PM told MPs the eight major lenders had signed up to the plan, which is meant to ensure banks no longer repossess homes if mortgage payments are missed for six months.

Mr Brown told MPs: “Hardworking households that experience a redundancy or significant 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 while they get their family finances back on track.”

It will be interesting to see what pressure this will bring to make the US follows suit.