The leaders of several large Councils have joined with the Director of the New Local Government Network, to press the UK Government to enable them to help credit-worthy people whose application for a mortgage has hit a brick wall due to the credit crunch.
They argue that in 1980, 600,000 people had mortgages with local authorities and that this solution could work again. They say that an added benefit of such an approach would be that any surplus gained would save Council Tax payers money.
"This proposal is a positive and practical idea which could help people to access affordable housing," said Mr Black. "First time buyers are now finding it almost impossible to get any form of mortgage without a substantial deposit that many of them simply do not have. Allowing the public sector to step in could prevent the housing market from complete collapse, whilst still giving people options on how to buy their new home."
"The Prime Minister should take this option seriously and look at making extra funds available to local authorities to start this initiative. Proper controls would prevent the sort of problems that led to the disposal of local authorities' mortgage portfolios in the 1980s and 1990s and the effective end to such provision. There is no reason why this cannot be revisited as a new initiative to help people get on the housing ladder."
