Councils 'to buy repossessed homes'

Local councils could be given the power to take over repossessed and unsold homes, ministers are expected to announce next week.

The plan would allow owners facing repossession to stay in the home on a part-by, part-rent basis.

The proposals would form part of a package of measures designed to help Briton's through the credit crunch – which has seen repossession figures increase dramatically over the last six months.

According to figures from the Council of Mortgage Lenders (CML) Some 18,900 homes were taken into possession by lenders during the first half of the year, up by some 48 per cent when compared with the same period of last year, when 12,800 homes were repossessed.

The plans have not been confirmed by the government, although Westminster sources confirm they are in the "right ballpark".

A Department for Communities and Local Government (CLG) spokesman said: "We are determined to do everything possible to promote long-term stability and fairness in the housing market.

"We are looking at a wide range of options to further support the housing market in the current climate, working closely with industry and lenders.

"What form that support will take will be announced in due course."

The news follows announcements earlier this week from the Liberal Democrats, who suggest a regulated 'sale and rent-back' scheme could prove beneficial to the UK property market.

Ian Dunt & Chris O'Toole