Buy to let owners will be exempt from the Government’s new Homeowner Mortgage Support Scheme designed to prevent repossessions by helping those who experience a significant and temporary loss of income as a result of the economic downturn.

The details of the scheme are still being worked out with lenders but the basic plan is to defer a proportion of interest payments on a mortgage for up to two years. The Government will then guarantee the deferred interests payments in return for banks' participation in the scheme.

Simon Gordon, Head of Communications for the National Landlords Association (NLA), said: “Given that 71 percent of landlords expect rental arrears to be a major issue during 2009, (see following story) the Government should extend the recently announced measures, aimed at helping struggling homeowners, to cover properties secured on buy to let mortgage finance.

“If the end game is to prevent people losing their homes, then it makes no sense for buy to let mortgages to be exempt from these new measures. For the more highly-geared and smaller landlord, whose monthly mortgage payments rely heavily on monthly rental income, tenants not paying can quickly spell disaster.

“By giving buy to let landlords the same breathing space, it would give them a chance to offer any struggling tenants a similar period of time to get their finances in order and prevent the home being repossessed and lenders evicting tenants.”

Chancellor Alistair Darling explained that the scheme was designed to help homeowners at risk of repossession through no fault of their own.

He said: “The scheme will give people who face a temporary fall in their income the confidence that they need to rearrange their finances so they can come through a difficult period without losing their home.”

But other property specialists have pointed out that if a residential landlord’s property is repossessed, tenants could be made to leave the property within weeks even if they are up to date with their rent. Therefore the scheme should be extended to Buy to Let mortgages to help prevent this happening.

Final details are expected early in the New Year and the country's eight largest banks have already pledged that they will work with the Government to develop the scheme.