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Councils urged to thrown lifeline to struggling homeowners

Monday 16th June 2008

Local councils should do more to assist homeowners who are struggling in the face of the credit crunch, a new report has claimed.

The New Local Government Network's (NLGN) 'Good Housekeeping? stronger communities through local housing intervention' report has called for UK councils to adopt the mortgage support plans employed in the US.

These work by allowing councils to be borrow money which they can then distribute to offer support to residents of the area who are in repayment difficulties.

The proposals would also see local councils encouraged to offer below market rate whole or partial mortgages to ward off repossessions in the locality.

Report author Anthony Brand said: "Prudential borrowing would support lower-interest debt than the markets can support.

"With mortgage defaults up 17 per cent this year, and likely to top 100,000, supporting those areas hit hardest could be vital to sustaining communities."

He added: "Government should set £2bn of its £50bn intervention package aside for supporting these measures, and allowing the hardest hit councils to apply for funding."

© Copyright 2007

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