Tuesday, Jan 13, 2009
Local authority cash - now you see it
24dash: Council tax cash to 'guarantee mortgages' in bid to bolster Nottingham's housing market
A new mortgage could be guaranteed by public money as part of a local authority's plan revealed today to encourage lending.
Nottingham City Council is in talks with a building society about the possibility of under-writing mortgages with taxpayers' money in an effort to rejuvenate its local housing market.
As part of the plan, the authority could also help home-buyers by stumping up equity where lenders are looking for significant deposits.
The Nottingham is the only lender that has so far publicly expressed an interest in taking part in the scheme.
Councillor Alan Clark, in charge of regeneration at the local authority, said he believed it was one of the first such initiatives proposed.
Posted by drewster @ 02:31 PM (538 views) Add Comment
14 Comments
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1. mark wadsworth said...
Right, so, er, Nottingham Council is going to sack a load of quangista (hurray!) and then waste the money on propping up house prices? (boo!) What a futile waste of time and effort.
2. drewster said...
On the bright side, at least they are cutting out some of the fat. Makes you wonder (a) why they didn't do this ages ago, and (b) how long before other councils follow suit?
(b) Actually, Buckinghamshire is also getting rid of 500 people:
3. fun 4 now said...
i am from notts...i think notts lost a fair bit in err iceland banking too
4. fun 4 now said...
'from the local rag......
THE city council has insisted that the failure of Icelandic banks which contained £41.6m of Nottingham cash will have a negligible impact on its budget in the coming year'...
well thats £41.6m that cant be spent on mortgages.
5. drewster said...
Good point - how can they lose £41.6m and expect there to be no impact?
According to the other article, "Estimates suggest the council must make £20m of savings to balance its budget for 2009-2010".
Saving of £20m over two years pretty much covers the £41.6m loss.
6. sold out said...
what has this to do with council tax?
Council tax payers are now going to see their hard earned cash being squandared (and failing imo) on propping up the housing market.
Is that part of their remit? This is illegal surely?
7. fun 4 now said...
perhaps members of notts city council have portfolios!!??......
especially with the the price of "luxury" flats in the city/lacemarket area dropping like a stone...lucky they didnt think of this last July!...
as some of these properties have fallen by 50% plus
8. mark wadsworth said...
@ Sold Out "Council tax payers are now going to see their hard earned cash being squandared (and failing imo) on propping up the housing market."
That's the madness of it. All things being equal, any upwards effect on prices from the subsidy is cancelled out by the dampening effect on prices from the higher council tax. Minus massive fraud and transactions costs and other stuff. All in all, a hugely negative sum game.
9. Rimmer said...
Fairly sure what they are proposing is actually "Illegal".
Councillors do not have the remit to spend council tax funds as they feel fit they have guide lines to follow, i am certain this fall well outside of allowable "Local Interests".
After all "Nottingham City Council" has no money at all, it is not a business - all it has are funds provided by the community to fund "Essential " services.
10. str 2007 said...
This makes me furious and is I suspect as 'fun 4 now' says has something to do with Council officials having BTL portfolios.
I've had enough of this nonsense, anyone in a position to be backing any plans such as this should have to edclare their self interest, be it politicians, council officials or journalists.
Basically anyone who has the potential to influence a market (including and especially housing) should have to legally declare their position withing that market.
This is effectively insider trading, but on a worse level as it is totally deciteful and gets dressed up as some form of aid to youngsers when it's nothing od the sort.
Far worse indeed than simply buying or selling some shares ahead of some news coming out.
11. cyril said...
@sold out ...
Councils have done mortgages before but they went out of fashion ages ago when it became easy for people to get credit on the high street. Nothing illegal going on
But they do have to be able to show they are getting value for money from their expenditure (although the tests can't be very stringent!). They can't just give money away.
12. eyeoftheweasel said...
Am I right in thinking that MPs are obliged to declare vested interests in companies and organisations, but not investments in housing and property? Don't know if it's the same for councillors. Very dodgy anyway, if I'm right.
13. sold out said...
str2007@9
Insider trading with the added bonus of not having to risk your own money.
Criminal.When are people going to realise we are being robbed left,right and centre.
14. str 2007 said...
Sold out
I don't know, maybe S2R1's concience change will come soon - I hope so.