Its not often that I disagree with my boss, but in this instance I do. Angus Council has recently passed a report rejecting a scheme designed to help first time buyers into the housing market. This scheme, where councils provide a guarantee to the lender, topping up the level of deposit. This allows the first time buyer to access mortages requiring a 25% deposit, and hence help them afford to live.
However, the Council has decided, on the basis of this report, not to take part in the scheme. Yes, there are risks. Yes, the Council would have to deposit large sums of money with the lender. But, the borrower still has to pass the lender’s credit checks, so that risk is minimised, and the council will of course still earn interest on the amount lodged with the lender – just as it does on its other investments, which totalled £43million as at March 31st 2011.
Now, its true that if the council invested £1m, only 40 borrowers would be helped, but isnt it better to help 40 families instead of none at all? This is apparently “not a fit for our housing policy objectives” – but who said it was either this scheme or building more council houses?
The truth is the housing crisis is such that we need to use all the tools at our disposal to solve it. There are people who are waiting to get a council house, and people in council houses who want to move out and buy their own property. After all, £6.4 million to house 45 families seems poor value if £1million will house 40.
This is something I would like the council to look at after the local elections in May, and would hope that Labour councillors will think again.