It was the home of many building societies, originally self-help organisations that nurtured home ownership in the 19th century, many of which evolved into major financial institutions to underpin mass home ownership that we saw in the last century. Today, Yorkshire still remains the home of many of the UK's largest mortgage lenders.

In the UK, seven in 10 households are homeowners, and the Government wants more to join them. This means adding to the 12 million households who rely on their ability to service more than £1 trillion of mortgage debt to secure their homes.

In recent years, mortgage arrears and repossessions have been rare – helped by low interest rates, a buoyant labour market and rising house process. But home ownership is not a risk-free endeavour, particularly if the market faces a downturn.

The Council of Mortgage Lenders expects 45,000 households to lose
their homes this year – the largest yearly total since the catastrophic housing market recession of the early to mid-1990s when more than 300,000 homeowners lost their homes in five years.

This week, the Financial Services Authority revealed that one in five households is worried about making their mortgage payments in the
next year.

Remarkably, despite home ownership continuing to grow, the safety net for homeowners has continued to decline since the early 1990s. The last cutback means that most homeowners now have a nine- month wait before they can receive means-tested assistance.

Labour hoped that private mortgage payment protection insurance would fill the gap and set a take-up target of 50 per cent in 2000. Eight years on and take up is actually lower than when this target was set, with fewer than one in five borrowers now covered. A further blow to this strategy was dealt when the Competition Commission announced that it had launched an investigation into the payment protection insurance market.

With the current strategy of providing a safety net for homeowners through the market in tatters, this area needs urgent review and remedy.

The Joseph Rowntree Foundation's inquiry into sustainable home ownership recommended that a new home ownership partnership – called "Shop" – be developed. The work has been carried out by a team led by the Centre for Housing Policy at the University of York.

"Shop" would be a partnership between government, lenders and homeowners. Assistance would be available for homeowners who experience one of four designated risks leading to income loss: unemployment, failed self-employment, accident or sickness.

After a two-month period of lender forbearance, "Shop" would meet all the capital and interest payments of a qualifying borrower for 10 months. Thereafter, assistance would be available on a means-tested basis.

Borrowers who experience a drop in income as a result of a non-designated risk could apply for assistance with capital and interest payments on a means tested basis, also after a two- month period of lender forbearance.

"Shop" would be paid for by contributions from borrowers, lenders and government. We have suggested a fair split to be 50 per cent from borrowers and 25 per cent each from government and lenders. On this basis, we have calculated the required contribution to be £1.70 per £100 of insured mortgage payment for borrowers with a further contribution of 85 pence per £100 for government and lenders.

The total cost of £3.40 per £100 insured is considerably cheaper than the average cost of £5.20 charged by private insurers. One of the reasons that our scheme is so much cheaper than the private cost is that "Shop" would secure "block insurance" from the private sector which would be
free of the very high commissions charged to individuals when they take out policies.

We have recommended that "Shop" should be compulsory for first-time buyers and for people who move house or remortgage. This is to ensure that over time the coverage of the proposal extends far beyond the 18 per cent of borrowers who currently have private insurance.

All of the parties have much to gain from the partnership: security for borrowers, reduced costs of repossessions for lenders and savings from having to re-house repossessed households under the homelessness legislation for central and local government.

All would gain from the greater stability that "Shop" will bring to the housing market.

Mark Stephens is Assistant Director of the Centre for Housing Policy at the University of York. He is co-author of a report published yesterday by the Joseph Rowntree Foundation.