The New Local Government Network has said that the Housing Green Paper will put local authorities back at the heart of house building for the first time in a generation. The independent think tank said that the plans rightly recognised the crucial role that councils could perform in building social housing, helping first-time buyers and supporting an unstable housing market.

Last month NLGN published its Good House Keeping? report which called for councils to step in with publicly-backed lower rate mortgages and other financial support packages to help home owners at risk of repossession. NLGN is delighted that the Green Paper will take forward these proposals for local authorities to offer mortgage support and finance, measures which could help tens of thousands of people retain their homes and help to stabilise the housing market.

Local authorities are able to borrow money at a lower “prudential borrowing” rate than commercial lenders and could therefore offer lower interest mortgages for homeowners. Other support measures could include councils buying properties under threat of repossessions and leasing them back to their owners. Councils could also target emergency loan finance to households most under threat of losing their homes because of the credit crunch.

Proposals to create new Local Housing Companies – also recommended in Good House Keeping? - were also announced. This will allow local authorities to be at the centre of building new social housing and creating new partnerships with other local stakeholders to help increase access to social housing for the 4 million people currently waiting to be houses.

The Green Paper also backs the NLGN recommendation to allow local authorities in conjunction with the Housing Corporation to purchase unsold housing stock from developers and turn it in to social housing